Patriot Software Advisor

Difference between “Earmarked” and “Recommending”.

There’s a difference between “Earmarked” and “Recommending”. If your church has an established designed fund for Missions or a specific Mission Trip a Donor can give a gift to that designed fund and on a note or letter put that they “recommend” it be used for John Doe. In this manner, the church or committee which oversees that fund still maintains full control over the gift. If the church or committee then decides that it should go to John Doe, then that is the church or committees decision.

In this scenario the Donor is completely entitled to a tax deductible contribution on their end of year statement because they simply “recommended” and the church/committee was in full control to make the determination. Hope and Pray that explains this clearly.

Comments for Difference between “Earmarked” and “Recommending”.

Click here to add your own comments

Jun 17, 2014
Don't collect funds if your not able to pay your budgeted expenses
by: Anonymous

Why would churches take up collections for special, designated and compassionate causes unless they are financially set-up to help others without changing plans and paying their general fund expenses? Why would any group request, encourage and collect money when they know they are struggling to pay their normal bills and knowingly will probably need to change the direction of love gifts etc..?

Feb 18, 2015
I don't think this would pass an IRS audit
by: Anonymous

I work in compliance for a corporate foundation and I would reject the request if anyone tried to "recommend" it for an individual. If the nonprofit or church is directing all donations as recommended then it wouldn't be seen as a recommendation. They might ask the church why they're directing it to that specific person.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Earmarked Contributions.

Need training on how to use QBO or Aplos effectively for a church or better yet ...need an expert in either of those accounting software to do your monthly bookkeeping and/or payroll? See more on our accounting services!