Huge Donations to Wards that can't spend it fast enough

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paulhilbig
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Huge Donations to Wards that can't spend it fast enough

Postby paulhilbig » Wed Feb 22, 2012 3:34 pm

There are a few wards in our stake that receive sizable donations from from friendly non-members. The only instruction the donors give is "we want this donation spent on the young women and young men programs".

The wards have been putting the donations into the Other Account where it grows faster than they can spend it each year. One ward has an Other balance that is more than half of their budget amount.

I'm a relatively new stake clerk but it appears the wards are using this donated money as a slush fund of sorts, transferring money from Other to the budget to make up short falls. Even then there is plenty left over in the Other account from year to year.

This just seems all wrong based on my training. The wards' contention is they don't want to turn away the donations (understandably, for fear of hurting the relationship and rejecting the generous kindness of the donors). Yet the donors only wants their money used for YM/YW.

Should the wards place that money into the YM/YW line item and treat it from then on as part of the budget?

Since the money doesn't have a specific enough purpose, in my opinion, to stay in the Other account year after year, should the wards send the money on to HQ? Or is that specific enough to stay in Other?

It seems wrong to not use their donation per their wishes by sending it to HQ. But their wishes don't seem specific enough.

Any suggestions on how to deal with the donations and how to deal with the current status of the Other accounts is greatly appreciated!

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rbeede
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Postby rbeede » Wed Feb 22, 2012 3:47 pm

On the tithing donation slip place it in the Other category with a note of Non-member donation for Youth.

The stake and wards should not be spending that money as it wasn't part of their given budget. CHQ should receive the funds and decide how it is used or authorize the stake to use it. CHQ makes no promise that donations will be used for the requested purpose, but they do try.

As a clerk if you even suspect inappropriate use of Church funds (once donated to the Church they are Church funds and not just stake/ward) you have to report this to Salt Lake as a financial discrepancy of fund handling. They will initiate the appropriate audit with the stake president and wards to determine if any correction needs to be taken.

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aebrown
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Postby aebrown » Wed Feb 22, 2012 4:23 pm

I know this can be a sensitive issue, but the Handbook is clear. In Handbook 2, Section 13.2.8, it says: "Stake and ward budget funds should be used to pay for all activities, programs, and supplies." A couple of exceptions are mentioned, but those do not include donations from nonmembers. One other exception is mentioned in Handbook 2, Section 8.17.3; that deals specifically with funding for nonmember young men who participate in scouting.

Other than those exceptions, I don't see how the ward can possibly use such donated funds under Church policy. So the options are to pass the funds on to CHQ (which may offend the donors) or to politely decline the donations (which may also offend the donors).
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allenjpl
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Postby allenjpl » Wed Feb 22, 2012 10:03 pm

A couple things to remember. First, as aebrown correctly pointed out, all activities are paid for out of the budget. Exceptions are limited and include annual camps for YM, YW, and Primary 8-11. If budget funds aren't enough, then the people who participate in these annual activities can be asked to help pay for it. If funds from the participants aren't enough, the bishop can authorize a fundraiser. Similarly, all equipment for the annual youth camps is paid for out of the budget. If budget funds aren't enough, the bishop can authorize a fundraiser. Fundraising activities should provide a meaningful value or service. Slush funds are totally out of bounds. Where on earth have the stake auditors been? You indicate this is an issue that spans multiple years. At least twice every year, an auditor should have been asking if all funds in the Other account have a specific purpose in line with church policy. Accounts that change their purpose after each activity ("let's see, we've paid for movie night, so now the funds are earmarked for the rafting trip) fail that test.

Second, if it's a donation, the donors can't specify what it can be used for. They give up control when they make the donation. That said, this isn't bring recorded as a donation. The donors aren't receiving credit on a tax statement, because the Other account is not a charitable activity.

So, your question is how to handle these funds, and by extension, the friendly non-members. You don't. You're the stake clerk. Your job is to train the bishoprics and clerks on the proper handling of authorized contributions. They should handle the friendly non-members by gently explaining that the YM/YW programs are designed to build strong men and women, not run activities. If these big activities are going to mean anything, the YM/YW should pay for it themselves. Have them get involved in creating work projects so that the YM/YW can earn their way. If group fundraising is authorized, invite them to the fundraiser, and make sure they get meaningful value or service out of their contribution. Raise your concerns in auditing training. You might need to get the Stake President involved.

There are ways for the friendly neighbors to help the YM/YW, they just can't give money directly to the church and put strings on the gift. As for the money itself, it should be returned. It shouldn't be sent to CHQ, because the donors are readily identifiable. Since this seems to be a substantial amount, and the appropriate action is to return ALL of it (including what has been inappropriately spent), Church Finance may need to be involved. The Stake President should definitely be in the loop. Good luck.

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Postby jtsummie » Wed Feb 22, 2012 10:14 pm

aebrown wrote:I know this can be a sensitive issue, but the Handbook is clear. In Handbook 2, Section 13.2.8, it says: "Stake and ward budget funds should be used to pay for all activities, programs, and supplies." A couple of exceptions are mentioned, but those do not include donations from nonmembers. One other exception is mentioned in Handbook 2, Section 8.17.3; that deals specifically with funding for nonmember young men who participate in scouting.

Other than those exceptions, I don't see how the ward can possibly use such donated funds under Church policy. So the options are to pass the funds on to CHQ (which may offend the donors) or to politely decline the donations (which may also offend the donors).


This is defiantly a sensitive subject I remember when the bishop showed me that in a the handbook when I was the YM's president. Our ward has 4 YM our budget was quite small!

paulhilbig
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Postby paulhilbig » Thu Feb 23, 2012 11:38 am

Thanks for your input. We are finishing up our stake's (any my) very first audit which is why I'm trying to gather as much info as possible on the topic. Your comments have confirmed what I was thinking and we definitely will make sure this gets fixed immediately. Thanks!

paulhilbig
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Postby paulhilbig » Thu Feb 23, 2012 12:46 pm

allenjpl wrote: It shouldn't be sent to CHQ, because the donors are readily identifiable.


Quick follow up, per HB 1 14.4.9 "tithes and other offerings ... cannot be refunded... it is improper to refund contributions given to the Church"

So are these donations to the YM/YW programs considered offerings? I would consider them as such since they weren't for a specific use. But I can see the counter argument, that the intention of the well-meaning donors was to help fund those wards' particular youth activities. That makes is a bit greyer.

Thoughts?

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Postby allenjpl » Thu Feb 23, 2012 1:42 pm

paulhilbig wrote:Quick follow up, per HB 1 14.4.9 "tithes and other offerings ... cannot be refunded... it is improper to refund contributions given to the Church"

So are these donations to the YM/YW programs considered offerings? I would consider them as such since they weren't for a specific use. But I can see the counter argument, that the intention of the well-meaning donors was to help fund those wards' particular youth activities. That makes is a bit greyer.

Thoughts?


Tithes and Offerings are not kept by the wards. They are swept to CHQ. If it was treated as tithing or other offering, the ward would not have access to it. So the wards dropped it into the "Other" account. The "Other" account is mainly used as a pass-through account, meaning that funds are collected for a specific purpose and then disbursed for that specific purpose. Generally, funds deposited into the Other account are not donations, they are payments for services or benefits that are provided. Thus, Scouts can deposit their summer camp fees in the Other account, and the ward can cut a single check for the camp, but the Scout's payments are not a donation.

The training that used to be associated with the Other account (that training is no longer on the training page, for some reason) used the example of a Temple trip. After estimating that it would cost $50 per person to go on a temple trip, the participants paid that money into the Other account, and the expenses were paid. At the end of the trip, it turns out that there was $100 left in the account. When there is excess funds in the Other account, you either return it to the donors or, if the donors can't be identified, you send it to CHQ. In the training example, the extra was because 2 people didn't go, so the proper method was to return the money to the people who didn't go. If the donor couldn't be identified because, for example, it was the result of a fundraiser that raised excess funds, the proper method would be to send the money to CHQ.

In your case, people have given money to the wards, which the wards have then put into the Other account without a specifically defined purpose. These aren't donations at all (because YM/YW is not a category that can be donated to), but neither are they paid-for benefits. The contribution could not be accepted by the ward and should have been kindly declined. Given that they weren't declined, and the donor can be readily identified, the correct action is to return the money.

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Postby funaddict » Sun Feb 26, 2012 4:40 pm

So could you solve this by creating a Bishop-approved fundraiser to the benefit of the non-member donor? For example, maybe after a windstorm, the scouts or YW or both could go and clean up debris for which the donor could make a contribution to the youth program. Is there any policy that forbids any donations in excess of the actual value of the service provided? If someone wanted to donate $1000 in exchange for shoveling snow off a driveway, is that OK? If not, then there have been many $20 or $30 plates of cookies or brownies auctioned off at our ward fundraisers that perhaps shouldn't have. I believe it's common for members (and non-members) to donate more than the actual value of the items or services, just to help out the youth. It seems like that's what this donor is doing in the OP's post; donating an amount of money toward the youth, whether or not they actually receive a tangible benefit. Maybe the youth can bake a $1000 plate of brownies for the donor.

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aebrown
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Postby aebrown » Sun Feb 26, 2012 5:06 pm

funaddict wrote:Is there any policy that forbids any donations in excess of the actual value of the service provided?


Yes. In Handbook 2, Section 13.6.8, it says: "If a fund-raising activity is held, it should provide a meaningful value or service." As your examples showed, if you eliminate or ignore that provision, fund-raising activities can become little more than a rationalization for making donations to increase the budget allowance. That is clearly contrary to policy.
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