Purpose

Peace Church is a 501(c)(3) religious corporation under the banner of the Presbyterian Church in America (PCA). This policy governs the acceptance, administration, and disbursement of pass-through and designated donations—contributions that a donor designates for a specific ministry, individual, or project—while ensuring (a) full compliance IRS regulations for 501(c)(3) public charities and protection of tax-deductible status, (b) maintenance of donor trust, (c) preservation of the Church’s discretionary control, and (d) alignment with Peace Church and PCA polity and mission.

Definitions

  • Pass-Through Donation: A contribution received by the Church with a donor recommendation that it be used for a named beneficiary (individual missionary, sister church, PCA agency, individual or family, project, or external entity, etc.).
  • Restricted Account: An accounting term designating an internal account number and name that is a holding place for funds directed by a donor other than to the general fund of the church operations.
  • Variance Power: The Church’s irrevocable legal right and responsibility to redirect funds if the original purpose becomes illegal, impossible, impractical, or inconsistent with Peace Church mission. Must be maintained to assure donor’s contribution remains tax deductible per IRS rules.

General Principles

  1. All gifts are property of the Church. No donor retains legal control after the gift is accepted. The Church must have complete control & discretion over how the donated funds are to be used.
  2. Donor recommendations are advisory only. The Session (or Finance Committee, if so designated by Session) retains exclusive variance power.
  3. No private benefit. Funds may not be used to discharge a donor’s personal pledge or legal obligation and may have no services or material benefit to the giver other than the tax deduction and the satisfaction of the giving itself.

Pass-Through Acceptance Criteria

Peace Church will not generally accept pass-through donations. All such donations will either be returned to giver or redirected to general fund if original donor cannot be contacted. The web site and church office can provide potential donors with links and giving information so the donor may give directly to the ministry in question.

  1. Peace Church is NOT a donor directed fund (DDF). As such it neither has the resources nor bandwidth to act as such. Donors may utilize Donor directed funds such as those known as the PCA Foundation and the National Christian Foundation for single donations dispersed to various entities.
  2. Only exception for accepting pass through donations will be for Peace sponsored missionaries in closed countries.
  3. Variance Power: All contributions are subject to the exclusive legal control of Peace Church. Donor recommendations are advisory only. The Church retains final authority to use funds in the best interests of the Peace Church.

Restricted Account Acceptance Criteria

Peace Church has internally designated accounts that are used for specific purposes. Accounts such as “benevolence” for deaconate discretionary mercy use, “building reserves” for more involved building repairs, “children’s ministry” for special projects involving the children and youth ministry center, “mission trips” for a short-term mission project, etc. are examples.

  1. Session or Diaconate must approve the creation and continuation of all restricted accounts.
  2. Donations designated to these restricted accounts must be legally used for those designated purposes and only those purposes per IRS regulations.
  3. Giving to restricted accounts not yet approved by Peace Church shall be returned to the giver or, if returning is not possible, redirected to another fund of the church in accordance with the church’s variance power.
  4. No personal designation will be accepted or recognized by Peace Church. For instance a check to benevolence designated to J.Doe (a person) will be given to benevolence restricted account with full variance power of using such gift in the hands of the mercy committee or full diaconate without prejudice.

Record Retention

Donation and accounting records will be retained by the church for 7 years per IRS regulations.