People falling into financial crisis is nothing new. I remember all too well starting my career in full-time ministry in 2006, and less than two years later, the Great Recession hit. As the Pastor overseeing the finances, I assure you the volume of requests for financial aid caught us off guard. We wanted to make sure we could help as many people as we could, but to do that, we needed to refine our policy, or we would quickly run out of funds. Whether your church is preparing for the next recession or reviewing its practices and procedures, having a thoughtful benevolence policy is a must.
Why Have A Benevolence Fund
God makes it clear throughout the Old and New Testaments that he cares for the poor, the widows, and the orphans. In Exodus 22:22, God said, “You shall not mistreat any widow or fatherless child.” In the book of James, caring for the widow and orphan is described as “Religion that is pure and undefiled before God.” In Matthew’s Gospel, Jesus said, “Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.” A benevolence fund is a way for the church body to demonstrate God’s love to those in a financial crisis. A benevolence fund provides the mechanism that allows the entire church body to participate in helping others.
The Benevolence Policy
Churches that build a benevolence fund must also have a strong policy that meets or exceeds any IRS requirement; it is crucial whenever money is involved, especially for churches. Because each church addresses financial hardships differently, there is no one-size-fits-all policy, but there are a few considerations to address when creating or reviewing the benevolence policy.
- Thesis: When creating the written policy, always start with a thesis statement – describe the problem the policy addresses and why the church wants to handle it.
- Funding: Clearly define how the church plans to fund the benevolence account. Specify what qualifies as a tax-deductible donation and what does not.
- Process: While the first two points may be similar for many churches, the process for requesting aid can vary, making it essential to define the process. Developing a flow chart mapping out the process is necessary for this step. Is there an intake form? How does an applicant find one? Does the requestor need to meet with someone? Who? What supporting documents are required (bills, budget, identification, etc.) Is it a long-term or one-time assistance? Is there an amount limit for aid? How much? Does the requestor know the limit? Who receives the aid (pay landlords, utilities, etc. directly, not through the individual)? How long does it take to make a determination? Who makes the decision – one person or a committee? Who and how is the requestor notified of the determination?
- Criteria: As alluded to in the process, the church must define the criteria for receiving financial aid. Aid should cover basics like food, shelter, clothing, medical expenses, etc. Also, is the requestor willing to learn financial skills like budgeting, finding additional sources of income, or even selling personal property to make ends meet?
- Document: Provide, in writing, each step in the process. Obtain the requestor’s address, phone, email, ID, marital status, children/dependents, etc. Does the requestor attend your church? How did they find out about the benevolence fund? When and with whom did the church talk to verify claims of financial hardship? When was the determination made? How was the requestor contacted? What was the outcome? When the case is closed, keep the file locked up.
Scripture clearly states that we need to care for those most vulnerable, which often means helping them financially. That also means churches are soft targets for schemers and scam artists. While angsting over a request, a wise mentor once told me if the church doesn’t get “burned” a few times by scammers, they may be too stingy. That stuck with me. Having a policy helps to provide a systematic way for people in financial crisis to request help and the church with a plan to verify the validity of the request to the best of their ability.
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