Designated Fund Management
The Orchard Church Ellijay is a registered not for profit corporation serving Gilmer County GA. All gifts to the Orchard Church are tax deductible for income Tax purposes. Statements will be sent in January of the year after donations are received. The Orchard Church is led by a team of Elders who will from time to time seek special offerings for unique projects which are in accordance with work and mission of the church. All gifts to these designated funding will be used to the extent ability of the church execute these projects. Funding that is designated by individuals to projects or needs that are not approved by the Elders will be returned to the donor. If funding for special projects exceeds the needed amount to complete project the Elders have the authority to use funds as needed in other areas of work in accordance to the mission of the church.
Designated Funds are contributions made to The Orchard Church with the stipulation the donations are used for a specified purpose. The Orchard Church will only accept donations for a specified purpose that have been approved by the elders, as a work that is in accordance with the vision and mission of the church, prior to the donation of the funds. As a general principle, The Orchard church can issue a charitable contribution statement for designated fund gifts.
Designated funds cannot be spent on anything other than the designated purposes unless the intended purposes have been accomplished. Then a majority of the elders may without delay close the designated fund account and transfer the use the funds for other items related to the church vision and mission.
When a cash donation is received for an approved project or ministry of the church and designated fund has been established, the cash donation can be recorded on the donor’s contribution statement.
Contributions designated to a group or organization within the church (i.e. Life Group) for the organization’s exclusive use and under its total control is not a deductible contribution to the church. (The class is not a 501(c)(3) organization.) The church cannot add the designated contribution to the donor’s contribution statement because the church does not have any control over the contribution.
Steps in Establishing a Designated Fund:
- This document is The Orchard Church’s policy and establishes the entirety of the policy. There are no other rules or policies that regulate or govern the use of designated funds other than this document.
- All Designated funds must meet the following conditions:
- Designated funds must have a clear purpose for the use of the funds. It should be clear why this designated fund is needed and how will it further the church’s mission.
- There must be a clear understanding of how the contributions will be received for the fund and what will be the reporting procedure to the church?
- There must be an establish a procedure for disbursement of the funds stipulating how the money will be spent, and specifically how and when the designated account be can be closed?
- There must be an establishment of accountability that produces periodic income and expenditure reports to the church leadership.
- The church should be made aware that the policy has been “Designated Funds Policy” has been established and will be followed.
- A list of contributions and donors will be kept for Internal Revenue Service required record keeping.
Establishing a Designated Fund
- Any Partner of the church or community may request the establishment of a designated fund.
- The Partner must present a written request to the church elders.
The request for the designated fund must state these three requirements in writing to the elders.
- The purpose of the fund and how it furthers the mission of The Orchard Church.
- Procedure on how the fund will be spent.
- The procedure on how the fund can be closed should be stated.
- The elders must approve the establishment of the requested designated fund.
- Before the church accepts a contribution for the designated purpose, the designated fund must be approved.
- If elders fail to approve a request for a designated fund, the designated fund cannot be established and the church will not receive any money.
- A list of contributors and their contributions will be maintained for Internal Revenue Service required record keeping.
The church, in exercise of its religious and charitable purposes, has established a benevolence fund to assist persons in financial need. The church welcomes contributions to the fund. The administration of the fund, including all disbursements, is subject to the exclusive control and discretion of the benevolence team. Recommendations from anyone will be considered but the team is not bound in any way to honor the recommendations. Donors will not be permitted to recover a contribution because the team failed to honor the donor’s recommendation. The church recognizes that assisting persons in financial need is a continuing mission of the church and has established this fund as an ongoing fund. Should at any time in the future the church vote to close this fund, all money in the fund at that time will go in the general budget of the church. Also, the benevolence team or church should record the required Internal Revenue Service documentation for benevolence requests. The following documentation for benevolence requests should be recorded for accurate record keeping:
- A complete description of the assistance.
- The purpose for which the aid was given.
- The church or benevolence committee’s objective criteria for disbursing assistance under the benevolence fund.
- How the recipients were selected.
- The name, address, and amount distributed to each recipient.
- Any relationship between a recipient and officers, directors, or key employees or substantial contributors to the Church.
Designated Contributions to the Church Building Program
In the vision and mission of The Orchard Church the need for a meeting facility of adequate size and functionality is both a great need and a very costly part of the church’s work. The establishment of a fund to develop and construct an adequate facility requires years of planning, procurement of land, and construction. The creation of this fund by the elders is both needed and requires special promotion to reach the goals of the church.
The church welcomes contributions to the fund. The administration of the fund, including all disbursements, is subject to the control and discretion of the elders and whomever the elders and the church give the authority to use these funds to fulfill the mission of an adequate facility.
Donors will not be permitted to recover a contributions on the grounds that the elders failed to honor a donor’s specific recommendation.
Note: This policy is adapted from a Southern Baptist article written by Keith Hamilton, CFP “Designated contributions.”