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

[funaddict]

So paying $30 for a $2 dollar plate of cookies shouldn't be allowed? What if the donor in the OP came to a fundraiser auction and bid $1000 for a plate of cookies? As far as fundraising activities becoming little more than a rationalization for making donations, IMHO, that's what most fundraisers are. Many people who purchase items or services from a fundraiser are rationalizing those expenditures by convincing themselves that it's going to a good cause, i.e. scout camp, girls camp, etc., which I believe goes to the other acct., not toward increasing the budget allowance. Most of us wouldn't pay $30 for a plate of cookies in the supermarket, and most of us probably wouldn't hire a handyman service to come and place flags on our front porch on national holidays, yet we frequently do these things for a fundraiser. My point is that much of the money raised in these fundraisers is above and beyond the actual value of the items or services, and/or are donated by people who don't really need or want those things, but donate anyway with the rationalization that they are donating to a "good cause".
I guess when I read that a fund-raising activity should provide a meaningful value or service, I assumed it meant that it (the activity) should be meaningful to the youth that were doing the fundraising, not necessarily the people buying the items or services. If the scouts shovel snow off someone's driveway and walks, is it any less meaningful if the person chooses to donate $20, $200, or $2000? Should any donation beyond the actual retail value be refused? If so then any fund raising auction must set hard limits on the bidding for each item. The key word is "chooses." The donor in the OP "chose" to donate toward the youth activities. I agree they handled it improperly, that's why I tried to come up with a way to make it proper within the rules of the handbook.

[rbeede]

Handbook 2 Section 13.6.8 provides your necessary guidelines:

Fund-raising activities are not usually approved because expenses for stake and ward activities are paid with budget funds.

So the stake & ward budget (as outlined by the stake president and bishop with funds from CHQ not fun-raising) should always be used to pay for activities first. Once that budget is drained to $0 then

As an exception, a stake president or bishop may authorize one group fund-raising activity each year.

So 1 group fund-raising activity a year.

Such an activity may be held to raise funds for the following purposes only:

1. To help pay the cost of one annual camp or similar activity as outlined in 13.2.8.
2. To help purchase equipment that the unit needs for annual camps as outlined in 13.2.9

So spend all of the stake allocated funds first then use fund-raiser money for the approved activities as listed in the handbook. I'd create a separate custom budget category called "Youth Fundraiser" for the funds in each ward (or stake). At the end of year if you have excess funds you need to send them to CHQ by contacting the Church Finance office.

If the stake president expects outside donors to effectively pay for all youth activities he may decide to make the stake & ward youth budget from official Church funds (those given to the stake from CHQ) only $1. This should be done with consultation with the Church Finance office to ensure the stake doesn't risk the legal tax exemption status of the Church.

[aebrown]

So the stake & ward budget (as outlined by the stake president and bishop with funds from CHQ not fun-raising) should always be used to pay for activities first. Once that budget is drained to $0 then
...
So 1 group fund-raising activity a year.

You skipped a step. If the budget is insufficient, then participants are asked to pay part or all of their share of the cost for the specific annual camps mentioned. Only if those funds are also insufficient is a fund-raising activity authorized.

I'd create a separate custom budget category called "Youth Fundraiser" for the funds in each ward (or stake).

Such funds should be tracked in a subcategory of Authorized Member Financed Activities (not Budget, as you suggested).

If the stake president expects outside donors to effectively pay for all youth activities he may decide to make the stake & ward youth budget from official Church funds (those given to the stake from CHQ) only $1. This should be done with consultation with the Church Finance office to ensure the stake doesn't risk the legal tax exemption status of the Church.

A stake president has a lot of leeway in administering his stake, but what you're suggesting here seems far outside what even a stake president can do. There is simply no provision in the Handbook for donors (inside or outside) to "effectively pay for all youth activities." The Handbook is clear: "Stake and ward budget funds should be used to pay for all activities, programs, and supplies." There are some very narrow exceptions allowed beyond that simple statement, but donations are not allowed.

[moonman239]

You skipped a step. If the budget is insufficient, then participants are asked to pay part or all of their share of the cost for the specific annual camps mentioned. Only if those funds are also insufficient is a fund-raising activity authorized.



Such funds should be tracked in a subcategory of Authorized Member Financed Activities (not Budget, as you suggested).



A stake president has a lot of leeway in administering his stake, but what you're suggesting here seems far outside what even a stake president can do. There is simply no provision in the Handbook for donors (inside or outside) to "effectively pay for all youth activities." The Handbook is clear: "Stake and ward budget funds should be used to pay for all activities, programs, and supplies." There are some very narrow exceptions allowed beyond that simple statement, but donations are not allowed.

If I were the Church, I'd probably say the wards can take the money. It makes no sense to me - other than that this was obviously done with the inspiration of the Spirit - that they can't accept donations if those donations don't come from a fundraiser. The people who decided to donate have a right do just that.

Perhaps the donors should be asked, "Do you want your money back? Or do you want us to donate your money to a trusted, non-Church-sponsored charity?".

[rbeede]

The First Presidency and Quorum of the Twelve direct how all donations to the Church are to be used.

A budget goes down to the stake president who divides it up among the wards/branches.

Even if a member donates money into say the temple fund that money could be used elsewhere although usually the Church tries to use it for the donated purpose.

In this case an outside donor wants to pay for almost everything. 10 years ago the Church allowed such types of funding or fundraisers. Now, however, to protect the Church's legal status (as a religious organization not just tax exempt) it has to be much more guarded in how money is collected and spent.

The stake president can talk with Church finance and the area authority about such large donations that are intended for the local youth in that stake. It just has to be handled in the correct manner to avoid legal issues for the Church.

[kylehart]

Now, however, to protect the Church's legal status (as a religious organization not just tax exempt) it has to be much more guarded in how money is collected and spent.

There are certainly very rational reasons for the way the church handles donations, but do you have a source to confirm it's to protect our status as a church and not just a tax exempt org?

[rbeede]

The classification as a religious organization is more affected in other countries outside the U.S. based on how financial contributions are collected. It has taken the Church years in some countries to be official recognized as a religious organization.

For the U.S. in order to keep its non-profit religious organization classification the handling of funds must be done appropriately. The IRS.gov website has a useful information document on how official religious organizations are automatically tax exempt without extra paperwork to be recognized as such. See http://www.irs.gov/pub/irs-pdf/p1828.pdf

[sammythesm]

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".

Why can't these funds be deposited as tithing under the non-member's name? Since youth activities (in your ward and in the entire church) are funded by budget funds which come from redistributed tithing, this still covers their desire to help fund the youth activities. Plus, they can also get the benefit of a tax-deductible donation (whereas AMFA donations are not tax deductible).

If a ward has immediate needs for camp equipment or to cover costs for an Authorized Member Finance Activity, I don't see an issue with putting the donation in as AMFA and spending it appropriately and expeditiously. This would reduce or eliminate the need to do the oft-loathed fundraiser.

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!

If you want a totally clean conscience, perhaps a member of the Bishopric should be sent to meet with the non-member and explain how youth activities are funded (centrally managed, redistributed tithing funds) and ask the donor if they'd like their donation to go into the general tithing fund (to possibly fund this ward's youth program or any other ward in the church) or whether they'd feel more comfortable contributing to Humanitarian Aid, Perpetual Education Fund, or other similar funds that also benefit youth throughout the world and still gives them the benefit/blessing of making the donation. Would be a great opportunity to bear testimony of the blessings of paying tithing as well.