Pastor Discretionary Fund Guidelines: Difference between revisions
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(Created page with "If there are to be discretionary funds for the use of the pastor, it is extremely important that the account be properly set up by the church board AND that the church board exercise administrative oversight over the expenditures from the fund. Otherwise it is possible that: * Donations to the fund would not be tax-deductible * The full value of the fund could become taxable income to the pastor We recommend that the Church Board immediately implement the following guid...") |
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'''''NOTE:''' Church Board “control” is established if the board documents a periodic review— | '''''NOTE:''' Church Board “control” is established if the board documents a periodic review— | ||
quarterly/annually— of all distributions from this account to ensure consistency with the congregation’s exempt purposes.'' | quarterly/annually— of all distributions from this account to ensure consistency with the congregation’s exempt purposes.'' | ||
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[[Complying with IRS & Labor Dept Policies|Return to Chapter 11: Complying with IRS & Labor Dept Policies]] | |||
[[Pastor Appreciation Gifts Guidelines|Return to previous section: Pastor Appreciation Gifts Guidelines]] | |||
[[Church Treasurer - Volunteer or Employee|Continue to next section: Church Treasurer - Volunteer or Employee]] | |||
Revision as of 00:24, 28 November 2025
If there are to be discretionary funds for the use of the pastor, it is extremely important that the account be properly set up by the church board AND that the church board exercise administrative oversight over the expenditures from the fund. Otherwise it is possible that:
- Donations to the fund would not be tax-deductible
- The full value of the fund could become taxable income to the pastor
We recommend that the Church Board immediately implement the following guidelines from the 2019 Church & Clergy Tax Guide by Richard Hammar. In the Church Board Minutes, document wording that
shows that the Church Board is:
- Giving the pastor discretion to distribute the fund only for specified purposes—such as relief of the needy—that are consistent with the congregation’s exempt purposes
- Prohibiting the pastor (in writing) from distributing any portion of the fund for himself or herself or any family member
- Retaining administrative control over the fund to ensure that all distributions further the church’s exempt purposes NOTE: Church Board “control” is established if the board documents a periodic review— quarterly/annually— of all distributions from this account to ensure consistency with the congregation’s exempt purposes.
Return to Chapter 11: Complying with IRS & Labor Dept Policies
Return to previous section: Pastor Appreciation Gifts Guidelines
Continue to next section: Church Treasurer - Volunteer or Employee