Please make sure that the chairperson of your local chapter or state office receives this email.
The purpose of this letter is to clarify CEF policy regarding personal support raising. In recent months there has been some confusion on this subject, and we hope that this letter will provide clear guidelines for boards, committees, and staff, all of whom should be involved in helping to raise the needed support for the ministry. Following is information which can be used to help you in knowing what can and cannot be done with regard to personal support raising.
The fundraising philosophy of Child Evangelism Fellowship is “ask God and tell His people.” As a faith-based ministry we are dependent upon God to supply our needs, and we are grateful for those the Lord leads to partner with us in reaching Every Child, Every Nation, Every Day.
All fundraising strategies incorporated must be in compliance with federal, state, and local law and must be in compliance with CEF policies governing fundraising practice. Strategies include fundraising by boards and committees, deputized fundraising, special events, and any effort employed to raise resources for ministry.
Deputized fundraising is encouraged; however, careful attention must be given to ensure that it is done in compliance with IRS guidelines which provide two tests to determine whether a gift can be considered tax deductible: (1) the intended benefit test, and (2) the control test.
· The Intended Benefit Test is designed to determine whether the contributor’s intent in making the donation was to benefit the ministry or the individual. Tax deductible gifts must be for the support of ministry. In order to pass this test, the following practices are essential.
· All solicitations for funds and all receipts must include the following statement: “Child Evangelism Fellowship makes every effort to utilize funds as designated; however, according to IRS guidelines all gifts must be under the direction and control of CEF to be used for the charitable purpose of the ministry.”
· Further deputized funds should be designated for a position rather than for a person. Donors may understand the position is held by Mary Smith, for example, but the designation of funds for the position is a better way to pass the intended benefit test.
· The Control Test is designed to demonstrate that the ministry has full control over the funds and has discretion as to their use to carry out its charitable purpose. In order to pass this test, the following practices are essential:
· All paid staff are employees as established by the guidelines of the Internal Revenue Service. As such no one can be paid until he/she has completed the CEF hiring process as outlined in the USA Operations and Policy Manual.
· Salaries must be set by the ministry according to a salary schedule and budget approved by the governing body.
· Salaries must be set based on responsibility, education, and merit and cannot fluctuate according to the person’s ability to raise funds.
· Funds belong to the ministry, not to an individual serving in the ministry.
· Wages must be reported as compensation on a W-2 and appropriate state tax forms.
· There must be meaningful training, development, supervision, and performance review of all staff members.
· Reimbursements must be approved by the governing body or its assigned representative and must be for the charitable purpose of the ministry.
It is critical that all CEF entities understand and abide by these guidelines. Failure to do so is illegal and will jeopardize your non-profit status. Questions or clarifications should be directed to USA Ministries.
Updated: June 2019 – based on current law and will be updated as necessary.