Benevolence Funds FAQs

Q: What are benevolence gifts?

A: Benevolence gifts are given by ministries to needy individuals or families.

Q: Can a giver deduct gifts directly made to a person?

A: No. Benevolence gifts made directly by a giver to needy individuals are not deductible. To qualify for a charitable deduction, contributions must be made to a qualified organization, such as a 501(c)(3) Christian ministry, which properly administers benevolence gifts.

Q: Which accounts are benevolence funds distributed from?

A: Benevolence gifts could be paid from the general fund of a ministry or from a benevolence fund based on gifts restricted for benevolence purposes but not restricted for a particular benevolent recipient.

Q: Can a giver suggest a recipient of benevolence funds?

A: If a giver makes a suggestion about the beneficiary of a benevo­lent contribution, it may be deductible if the ministry exercises proper con­trol over the benevolence fund. The suggestion must only be advisory in nature and the ministry may accept or reject the gift. Otherwise, earmarked benevolence gifts are generally not deductible.

Q: How are gifts reported to the IRS?

A: Benevolence payments to nonemployees are not reportable on Form 1099-MISC (or any other information form). Benevolence payments to employees are generally reportable on Form W-2.

Q: How does the ministry make decisions on issuing benevolence funds?

A: Ministries should form a benevolence committee for the express purpose of determining the recipients of the benevolence funds and the amounts they should receive.


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