The Knowledge Center provides you access to hundreds of documents including
policies, procedures and a wealth of research on topics such as charitable gifts,
expense reimbursements, board governance, fringe benefits, and much more.
This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.
10 Fundamentals of Forming a Charitable Organization
10 Fundamentals of Forming a Charitable Organization
10 Fundamentals of Forming a Church
10 Fundamentals of Forming a Church
10 Steps to Forming a Charitable Organization
10 Steps to Forming a Charitable Organization
10 Steps to Forming a Church
10 Steps to Forming a Church
Anti-Sexual Harassment Policy
Sexual harassment policy that may be used by ministries as a guideline for creating their own
Anti-Sexual Harassment Policy for Churches
Policy and procedures in order to prevent and handle any sexual harassment claims
Applying for Tax-Exempt Status
Outlines how a nonprofit may apply for tax exempt status
Approval for Overtime Hours
Approval for overtime hours
Assumption of Risk/Liability Waiver
Obtaining an assumption of risk/liability waiver may be very appropriate when churches or other charities sponsor activities that are physically, mentally, socially or emotionally demanding.
Background Screening Obligations and Checklist
It is important for Christ-centered churches and nonprofits to understand their obligations under the Fair Credit Reporting Act (FCRA) when becoming end users of background screening services.
Charitable Solicitation Registration - The Unified Registration Statement
Explains the unified registration statement used by many states for charitable solicitation registration
Charitable Solicitation Requirements
Charitable solicitation registration state-by-state survey
Outlines the fourteen criteria used by the IRS to determine what qualifies as a church
Church Employees and Severance Pay
Determining whether, when, and how severance pay may be provided to church employees who are terminated from church employment is a challenging issue. A memorandum provided to ECFA by Mosher & Wagenmaker, LLC, Attorneys at Law in Chicago suggests that severance pay may be lawful and appropriate under certain circumstances, provided that applicable safeguards are satisfied.
Church Employees or Independent Contractors?
Churches often pay a number of individuals for which they must determine if the persons or employees or independent contractors.
Church Tax and Finance Resources
Publications that include tax and finance information for churches
Churches and 501(c)(3) Status
Discusses the requirements regarding 501(c)(3) status for a church
Churches in an Election Year - Staying Legal
It is always important for church leaders to understand the federal law concerning political campaign activity—it relates to candidates for any elective office at federal, state, or local levels. But the need to understand the law is heightened in a Presidential election year.
Closer Looks in Tough Times
Discusses the importance of reference checks when hiring new employees
Comparison of Churches, Religious Orders, and Other Nonprofit Organizations
Outlines the key distinctions between churches, religious orders, and other nonprofit organizations
Compensation for a Disqualified Person
Checklist to be used by a nonprofit to document compensation for a disqualified person to avoid future intermediate sanctions problems
Compensation Survey Resources
Lists several publications that contain surveys of nonprofit compensation
Determining Reasonable Compensation Related to Earlier Undercompensation
Discusses a Tax Court case in which compensation paid to a company’s founder was found to be appropriate due to previous undercompensation
Disclosure of Form 990 Voluntarily
Suggested statement to be provided with a Form 990 voluntarily prepared by a ministry not required to file by the IRS
E-Filing Requirements for Form 990
E-filing now required for large nonprofits
Employee Confidentiality Agreement
Sample employee confidentiality agreement that may be used by nonprofits as a guideline to establish confidentiality expectations within their organization
Employee Handbook -- Sample
Sample employee handbook to modify and adapt for your organization
Employee vs. Independent Contractor
Outlines differences between an employee of a ministry and an independent contractor
Employment Evaluation Form Resources
Lists Websites that contain sample employment evaluation forms
Establishing Executive Compensation for your Ministry
Outlines considerations to be made by a nonprofit when establishing executive compensation
Excess Benefit Transactions
Discusses and defines excess benefit transactions for 501(c)(3) and 501(c)(4) tax-exempt organizations
Executive Compensation - Committee Charter
This sample charter includes the purpose, composition, organization, and responsibilities of the committee.
Executive Compensation - Philosophy Statement
This sample document outlines an organization's philosophy of executive compensation.
Federal Public Disclosure Requirements
Outlines the disclosure rules for Form 990 as required by the IRS
One who acts for or in place of another based on limited financial or accounting authority from the person engaging the agent.
Charities that have not attained 501(c)(3) status with the Internal Revenue Service (IRS) sometimes ask charities that have 501(c)(3) status to process donations for them as a “fiscal agent” and provide charitable receipts for donors. While it is inappropriate for an organization to be a “fiscal agent” and simply receipt and “pass through” or act as a “conduit” for donations intended for another charity, it may be appropriate for an organization to provide administrative services for another charity. These administrative services are sometimes referred to as “fiscal sponsorship.”
FLSA Requirements Regarding Enterprise Coverage for Churches
In the context of reviewing the impact of the FLSA changes for our church, if we do not appear to meet the requirements for enterprise coverage, does that mean we do not need to comply with FLSA requirements?
FLSA Requirements Regarding Enterprise Coverage for Nonprofits
In the context of reviewing the impact of the FLSA changes for our organization, if we do not appear to meet the requirements for enterprise coverage, does that mean we do not need to comply with FLSA requirements?
Foreign Missionary Filing Exemption
Discusses the exemption of certain foreign missionary organizations from filing IRS Form 990
Form 990 Software
Reference to IRS list of Form 990 software providers
Form 990-related Policies and Procedures
Links to policies and procedures related to the Form 990
Four Common IRS Church Audit Issues
Church tax audits can be frightening, more so now than ever, with the prevailing climate with IRS tightening its controls on nonprofits. Attorney Courtney Jones shares four key IRS audit issues and how to manage them.
Discusses honoraria payments and potential conflicts of interest related to them
Housing Allowance and Commissioning of School Employees
Discusses IRS ruling on school employees and their eligibility for a housing allowance
Housing Allowance for Retired Pastors
Outlines the IRS’s position on housing allowance for retired pastors
Housing Allowance Worksheets
Worksheets that may be used by ministries to officially designate the housing allowance
Housing for Your Pastor: Parsonage or Housing Allowance?
Should your congregation provide a parsonage to your clergy or provide the funds so the minister can buy or rent his or her housing? This paper presents the advantages and disadvantages of this important issue.
Implications of Section 4965 - Excise tax on tax-exempt organizations
Section 4965 imposes an excise tax on tax-exempt organizations and their managers for involvement in prohibited tax shelter transactions.
Integrity and Compliance with the Law
Demonstrating integrity is important for churches because, over time, doing so establishes and reinforces necessary trust with church members as well as those outside the church whom we are called to reach with the Gospel.
Intellectual Property for Religious Organizations Guidebook
Intellectual Property for Religious Organizations Guidebook and Forms 2015 Edition by The Church Law Group.
Under the Intermediate Sanction rules, the IRS can penalize nonprofit insiders. The sanctions are considered "intermediate" because they penalize the individuals involved without taking away an organization's tax-exempt status.
IRS Form 990-N (e-Postcard) Filing Requirements
The IRS continues to lower the threshold for e-filing of Form 990 by charities.
IRS Forms for Exempt Organizations
List of IRS forms created for tax-exempt organizations
Joint Venture Policy (Abbreviated Version)
Organizations should consider adopting a joint venture policy if the organization has entered into or is considering entering into a joint venture agreement. See an abbreviated version of a joint venture policy.
Discusses issues relating to nonprofits utilizing leased employee arrangements and the related housing allowance implications
List of State Regulatory Agencies for Solicitations by Charitable Organizations
The following is a contact list of state agencies that have oversight of charitable solicitations.
Loans with Below-Market Interest Rates
Outlines the appropriate tax treatment of loans with below-market interest rates
Maternity Leave Policy
Establishing a proper maternity leave policy may require compliance with certain federal laws and various other considerations.
May employees covered under the FLSA donate or volunteer time for their employer?
Ask ECFA Question from ChurchPulse - May employees covered under the FLSA donate or volunteer time for their employer?
Microsoft Charity Licensing
Many Christian churches and ministries have been uncomfortable with the Microsoft charity licensing program for Office 365 because it requires them to certify they don’t discriminate in their employment practices regarding lesbian, gay, bisexual, and transgender (LGBT) people. On October 8, 2015, Microsoft addressed these concerns and posted changes to its policy on their website.
Military Leave Policy
Federal law protects members of the uniformed services from certain workplace uncertainties.
Minister's Compensation Worksheet
In too many churches, salaries are not clearly reported in contrast with fringe benefits and expense.
Ministers and Social Security Tax
Outlines the applicability of social security tax to ministers
Ministers Opting Out of Social Security
Ministers may opt out of social security in rare situations. Unfortunately, this option is often promoted as a way for any minister to get out of paying into the social security system. This document clarifies these issues.
Policy on the employment of related individuals
Nonprofit Employees and Severance Pay
Determining whether, when, and how severance pay may be provided to nonprofit employees who are terminated from employment is a challenging issue. A memorandum provided to ECFA by Mosher & Wagenmaker, LLC, Attorneys at Law in Chicago suggests that severance pay may be lawful and appropriate under certain circumstances, provided that applicable safeguards are satisfied.
Obtaining Form 1023 Copies
Discusses proper accounting methods for Form 990 reporting and procedures to follow when changing accounting methods
Overtime and Minimum Wage Exemption Rules
Outlines revisions to the rules amending the Fair Labor Standards Act
Ownership of a For-Profit Organization
Outlines the accounting and reporting guide-lines for nonprofits that own all or a portion of a for-profit entity (SOP-94-3)
Pastoral Ordination, Licensure, or Commissioning Procedure
Outlines the proper steps for a ministry to follow when ordaining, licensing, or commissioning an individual for gospel ministry
Guidelines for maintaining quality personnel files
Policies and Procedures Governing Local Chapters, Branches, and Affiliates
If an organization had local chapters, branches or similar affiliates during the year, the Form 990 asks if there are written policies and procedures governing their activities to ensure consistency with the activities of the organization. If the answer to this question is No, an explanation is required in Schedule O as to how the organization ensures that the local unit’s activities are consistent with its own.
Political Activity by Churches-Ministries
This is a summary of the rules governing the conduct of activities related to elections by a church (or parachurch organization).
Qualifications for Ministerial Tax Status
Discusses the qualifications an individual must attain to be granted ministerial tax status
Outlines the Internal Revenue Code’s criteria for reasonable compensation
Reducing Staff Turnover
Discusses workplace and hiring strategies that will help reduce ministry staff turnover
Reimbursing Interview Expenses
Reimbursing job candidates for interview-related expenses is commonplace. Understanding the tax implications of these reimbursements is important.
Religious Discrimination in Hiring
Discusses Title VII’s protection of churches’ and ministries’ right to discriminate on the basis of religion in hiring practices, includes a sample nondiscrimination policy
Religious Order Characteristics
Outlines the IRS guidelines for determining if an organization qualifies as a religious order
Social Networking in the Workplace -- Legal Implications
Cynthia Coffee brings many excellent perspectives on this contemporary and challenging topic from her experience as General Counsel at Southeast Christian Church in Louisville. Her recommendations on a comprehensive written policy to govern social networking at a church are extremely valuable.
State Unemployment Compensation and Religious Organizations
Outlines state unemployment compensation and its application for religious organizations
Strategies for Structuring Ministerial Compensation
How clergy compensation is structured often has a significant effect on how a congregation stewards its resources. The same total compensation dollars expended by a congregation can result in more or less dollars in the pocket of clergy depending on proper structuring.
Tax and Reporting Procedures for Congregations
The tax and reporting requirements with which churches must comply often seem to complicate the task of the local church treasurer. Many treasurers who volunteer their services to the church feel the special tax treatment of ministers adds another level of complexity to an already timeconsuming task. Following is an overview of many of the basic federal tax and reporting issues.
Tax Publications for Exempt Organizations
List of IRS publications relevant to tax-exempt organizations
The Clock and the Paycheck
One of the primary challenges of the Fair Labor Standards Act (FLSA), is to determine who is covered and who is exempt under the law. The proper classification of workers as employees or independent contractors is also an important consideration in effectively administering the FLSA.
The Latest in Evangelistic Trends: International Arms Trafficking!
If your church or ministry sends computers and software outside of the United States, you may be violating federal regulations (punishable by jail time and fines) without even knowing it.
The Minister’s Housing Allowance
The proper designation of a cash housing allowance can result in significant tax savings for the qualifying minister. It is important to follow key steps to maximize the housing allowance exclusion.
Transparency Required under ECFA’s Standards in Addition to Disclosures Required by Federal Law
Federal law requires charities to disclose Forms 1023, 990, 990-T and 5227 when requests are made in person or in writing. However, ECFA’s Standard 5 goes beyond Federal regulation.
Tuition Reporting Requirements
Outlines the information reporting requirements for colleges and universities for qualified tuition payments
Unrelated Business Income Policy
Provides an overview of unrelated business income and a series of questions designed to help your organization determine if you have any unrelated business income
Unrelated Business Income Tax - In General and Applied to Mailing Lists and Affinity Credit Cards
The revenue a charity receives from the sale of mailing lists and the fees from affinity credit cards may generate unrelated business income.
Use of Email and Internet Services
This policy outlines permissible email and Internet use for church and nonprofit staff.
What Is a Nonprofit?
Discusses the characteristics of a nonprofit
Why Congress Adopted The Church Audit Procedures Act And What Must Be Done Now To Restore The Law For Churches And The IRS
This article by Michael Martin, ECFA's director of member services and legal counsel, explains the history behind the Church Audit Procedures Act of 1984 and provides recommendations for improving the law for churches and the IRS thirty years after its adoption.
Work Made for Hire
Outlines the copyright law regarding work made for hire by employees of a nonprofit organization