Contributions designated for Altar Flowers: Non-Deductible or Deductible?
Church member(s) make cash-contributions for Altar Flowers in Memory/Honor of a loved one. The Church will purchase Flowers from their vendor out of the Flower Fund. The Flowers are displayed as part of the Worship Service(s). The Flowers are then disposed of by one of the following ways:
#1 The Church donates them to a Hospital, Nursing Home, or to a shut-in individual.
#2 The individual who made the contribution in memory/honor of their loved one takes the flowers home
#3 The individual who made the contribution in memory/honor of their loved one delivers the flowers to a Hospital, Nursing Home, or individual.
I have also seen this with Poinsettias during the Holidays. The Church will purchase a large quantity of them to decorate the Sanctuary for most of December. The church will receive cash contributions designated for the purchase of these flowers. Contributors are then invited to take a Poinsettia home after the last Christmas Service assuming they are still alive.
How should the Church treat the cash contribution? Should they be posted to the Flower Fund as a deductible contribution since they provide intangible benefit to the congregation as well as the contributor(s)? or should they be treated as Non-Deductible contributions since the Contributor has the option of taking the flowers home once the Church is ready to dispose of the flowers?
An IRC reference or Court Case would be fantastic since this has been in my experience a debated topic.