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Donation Dilemma

Discussion in 'Money Talk$' started by Gib, Aug 29, 2016.

  1. Gib

    Gib Active Member

    Feb 24, 2003
    Likes Received:
    I am assisting the local Fellowship of Christian Athletes in planning and preparing, after game fellowships during this football season. These fellowships are called 5th Quarters. Games, snacks, event prizes and guest speakers are part of the event.

    Due to the huddle leader's tight school schedule, she has asked for me to help find sponsors for each event. She asked if it was possible for my ministry team to physically do the leg work by purchasing the food, supplies and event prizes. We said sure.

    We had 4 sponsors donate from $50-$150 each. Those donations will cover all four home game events, including advertisement, food, supplies and event prizes.

    Here's the dilemma (maybe): When I asked for donations, I didn't specify who they needed to make their checks out to. They made it out to our church. I gave them to the secretary and asked if she could talk to the finance committee to see if it was possible to create a line item in the budget for the time being. She said yes.

    She's now telling me that what we are doing is illegal and that she is going to ask our IRS agent to confirm. Is what we are doing illegal?
  2. rsr

    rsr <b> 7,000 posts club</b>

    Dec 11, 2001
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    I do not believe it is illegal (I'm not a tax attorney, but you probably figured that out already). As long as the receiving charity — and the FCA is a 501(c)(3) — carries out programs in line with the mission of the donating charity (yes, in this case) it is OK.

    The best example may be the United Way, which collects money from donors and distributes it to other charities. If donating to another charity were illegal, United Ways all across the country would be out of business.

    I suspect that the secretary is just being especially cautious and may have had bad advice.

    As a practical matter, they could just have given you cash or checks made out to you. While you are supposed to keep those funds segregated from your personal finances, I don't think the IRS is going to go after a few hundred bucks. Alternatively, the donations could be given to the FCA, but from your case it seems that would create an unworkable situation since the FCA wanted you to do the legwork. It seems donations to the church are the best solution (and it can issue receipts if the donors want them for tax deductions) Of course, that would require the church to pay the bills, but that seems a small price to pay.

    Just my thoughts.