Designated Giving

It might not be illegal, but it definitely is dishonest and immoral.

Joseph Botwinick

 

Is it still dishonest and immoral when the action is decided and approved by a general membership meeting, presumably the same folks who designated the funds to begin with?

 

Gold Dragon,

See my previous post since I edited it to make a clarification.

I only know the IRS rules concerning deductibility for the donor.

In my opinion, designated funds should only be used for their intended purpose. If a donor does not CLEARLY understand that their desigantaed gift can be suddenly used for some other purpose by a church vote, then you've got a potential problem with the donor, including ethical and moral issues.

 

Maybe I should clarify my post. I said the funds could be borrowed and then repaid, just as if one is making a loan. There is an accounting and yes the church would have to approve. When the money is repaid, then it will be used for the designated item.

For example, money is given for new carpet in the church. The church does not need new carpet. Therefore, the money is placed in the bank to draw interest. The church does need to pay the electric bill. Money can be borrowed from the carpet fund and then repaid so that when the church needs the carpet, the money will be there.

What is dishonest or immoral about obtaining a loan?

It would be dishonest, if the church did not know about it or the money is never repaid.

I'm really not sure what the American Red Cross or the United Way has to do with a church's financial business.

We donate funds for a youth to go to camp, but the youth is not related to us, therefore, I would think that would be tax deductible.

 

Is it still dishonest and immoral when the action is decided and approved by a general membership meeting, presumably the same folks who designated the funds to begin with? </font>[/QUOTE]Yes.

 

I would agree that if the funds are NEVER used for the designated item or items then that would be wrong.

Of course, the church could ask the donor's permission to use the money for something else.

 

What if the donor is dead or lives in another state?

Joseph Botwinick

 

If the donor is in another state, they can be contacted, if necessary.

If the donor is dead, then the funds must be used for the designated item, but I believe could still be borrowed from and repaid to be used for the designated item.

I would guess that the church's money goes in one account. It is a matter of paper work and bookkeeping to be sure that the money is used for the designated item.

It is definitely wrong when one accepts money for a purpose and never uses it for that purpose.

I'm not suggesting that the funds ever become "undesignated".

 

Yes, [this is new to me] and i really don't understand why. wouldn't it be much easier to put all the money in one pot and draw from that? they seem to have special collections everyother week for something or other -- many different envelopes. I just fold up my gift and put it in an unmarked envelope -- no designation.

 

Thankful,

People were asking about legalities. The IRS rules about charitable giving apply to the churches, and since someone else brought up the Red Cross I used United Way and Red Cross in my example.

 

Our church, has the general fund and it has designated funds as well. We haven't had any problems.

I know of church, of a different denomination which doesn't use the traditional method of passing the collection basket, they have a box at the rear of the sancuary. The tithes are deposited in the box, they've not had a problem meeting monthly expenses.

 

Our church, has the general fund and it has designated funds as well. We haven't had any problems.

I know of church, of a different denomination which doesn't use the traditional method of passing the collection basket, they have a box at the rear of the sancuary. The tithes are deposited in the box, they've not had a problem meeting monthly expenses.

 

Yes, [this is new to me] and i really don't understand why. </font>[/QUOTE]Designated giving puts money in a special fund to be used for a specific purpose. In other words, money that is collected for "overseas missionaries" is not used to pay the electric bill.

 

Jeff, I understand what it is but not why. for example one of the church buidings needed a roof repair, but there wasn't enough $ in that fund to do the repair, so, they had to get permission to borrow money from another fund. of course the other fund has to be paid back. why not have one pot. pay buiding repairs, overseas missionaries, and the utility bills from it. i only have one checking accoung...all bills, no matter what they are for, are paid from the same account. just a thought.

 

It seems that some of us are talking about different things.

If we have donations for Lottie Moon, Annie Armstrong etc., that money is given for missions and should not be used in the general fund for electric bills, etc, but if a person designated funds for a grand piano and the church does not need or have room at that time for a grand piano, then that money should be put in a grand piano fund and could be borrowed from and repaid when it is time to buy the grand piano.

There are probably funds for music, musical instruments, computers, power point etc.

Businesses do this with budgets. They have to have permission from the Board of Directors to transfer funds or borrow funds.

Thanks, Texas Sky, I see your point.

 

The actual cash can be all in one account. Funds are accounting entities on paper meant to track what has been designated for what purposes.

Why do folks give with a designated purpose? I think it helps encourage giving when you have a more specific idea that your money is going to something you strongly care about rather than something more general. Whether this is the right attitude towards giving or not is debatable.

 

You can. Your church can budget for all of these expenses if they so choose.

 

Ever hear of "Faith Promise" giving its a great way to support missionaries.