The goal of this policy is to encourage giving to CHRISTIAN HEALTH SERVICE CORPS. (hereinafter referred to as “Christian Health Service Corps” “CHSC” or the “Organization”) without encumbering the Organization with gifts that cost more rather than benefit the Organization. The goal is also to avoid gifts that the donor restricts in a manner inconsistent with the goals or tax-exempt purposes of the Organization.
To protect the interests of the Organization and the persons and entities who support its causes, these policies are designed to assure that all gifts to, or for the use of, charitable causes are structured to provide maximum benefit to all parties involved.
The Organization shall execute no planned giving agreement without the advice of legal counsel. Prospective donors shall be strongly encouraged to seek their own legal and/or tax counsel in matters relating to their charitable gifts, taxes, and estate plans.
To facilitate the receipts of gifts and bequests, the Organization must be capable of responding quickly and in the affirmative where possible to all gifts offered by prospective donors. Unless stated otherwise, the Board of Directors intends that these policies apply to all gifts.
- Gifts of:
- The Organization will accept gifts in the form of cash and cheques regardless of amount, unless: (a) a question exists as to whether the donor has legal title to the asset; or (b) a question exists as to the legal capacity of the donor to transfer funds.
- Donors shall make all checks payable to Christian Health Service Corps, and donors shall never make checks payable to an employee, director, agent, or volunteer for the credit of the Organization.
- Publicly Traded Securities
The Organization may accept publicly traded securities. The donor may anticipate that the Organization may immediately sell such securities.
- Closely Held Securities
Organization may only accept closely held securities upon written approval by the Board of Directors. The Board of Directors will review these securities using the following criteria:
- There is a readily available market for their disposition.
- Accepting such securities will not create any potential liability to the Organization.
- The closely held entity engages in no activities that would be inconsistent with Organization objectives.
- The Organization has identified whether the security will generate unrelated business income taxes (“UBIT”).
- Real Property
The Board of Directors must approve in writing all gifts of real estate in advance of accepting the gift.
- The Organization may require that a licensed appraiser issue an appraisal of the real estate before acceptance. The licensed appraiser shall not have any business or other relationship with the donor. The costs of the appraisal shall be borne by the donor.
- The Organization cannot accept any gift of real estate until the Board determines that no environmental waste contaminates the property. The Organization may require a Level I Environmental Survey. All costs related to the survey will be borne by the donor.
- In general, residential real estate located within the state of Texas may be accepted, unless the Board of Directors shall determine for some reason that the property is not suitable for acceptance.
- Special deliberation shall be given to the receipt of real estate encumbered by a mortgage, as the administration of such property may give rise to unrelated business income for the Organization, as well as payments, taxes and insurance that may burden the Organization’s finances.
- The Board of Directors may choose to accept royalty interests in oil, gas, or other minerals. Before accepting such interests, the Organization shall engage legal counsel and other professional advice, where appropriate, to evaluate whether accepting the gift exposes the Organization to environmental or other liabilities. The Organization shall not accept working interests.
- Tangible Personal Property
- Jewelry, artwork, collections, and other personal property shall not be accepted unless the employee, agent or volunteer working on behalf of the Organization shall have reason to believe the property has a value in excess of $1,000. Such property can only be accepted on behalf of the Organization by the Board of Directors or such other person or persons authorized to do so by the Board of Directors.
- No personal property shall be accepted by the Organization unless there is reason to believe the property can be quickly sold. No personal property shall be accepted that obligates the Organization to retain it in perpetuity. No perishable property or property which requires special facilities or security to properly safeguard it will be accepted without prior written approval of the Board of Directors.
- Notwithstanding the forgoing, if there is reason to believe personal property has a value of $1,000 or more, it may only be accepted after an appraisal qualified under the terms of the Internal Revenue Code governing gifts of personal property and a review by the Board of Directors or those empowered to act on its behalf.
- The ministry will not accept personal property gifts with a value under $1,000.
- Other Property
Other property of any description including mortgages, notes, copyrights, royalties, easements, whether real or personal, shall only be accepted by further action of the Board of Directors or persons duly acting on its behalf.
- Deferred Gifts
- The Organization shall actively encourage gifts through Wills and Living Trusts.
- In the event of inquiry by a prospective donor, representations as to the acceptability of a bequest to the Organization shall be made in accordance with this Gift Acceptance Policy only.
- The Organization shall at all times retain the right to refuse a gift from an individual or from an estate when it is not in the best interest of the Organization to accept the gift.
- When the Organization is the recipient of a gift from a will or trust, the Board of Directors shall review the restrictions upon the gift and determine if it is in the best interests of the Organization to accept the gift. The Board of Directors may appoint a person or persons to review the restrictions and report their findings and recommendations to the Board of Directors for their decision. This report may be given in person, on the phone or over email.
- The Organization will not accept a gift that might result in conflict within the Organization or confusion as to the utilization of the gift or that might create an undue financial burden upon the Organization.
- When the Organization receives an unrestricted estate gift, the Board of Directors, or those empowered to act on its behalf, in consultation with the Organization’s President, shall determine its highest and best use at the time. If the Organization has created an Endowment Fund and the unrestricted funds are not needed for the ordinary and everyday expenses of the Organization, such unrestricted gifts may be utilized as an addition to the Organization’s Endowment Fund.
- Life Estate Gifts
- Donors shall generally not be encouraged to make gifts of a remainder interest in real property in which the donor retains a life estate.
- This policy is based upon the possibility that the donor may need to sell the home in the future and find that the value of the life estate is a small portion of the value of the property. Such gifts may be accepted by the Board of Directors when the asset involved appears to be a minor portion of the donor’s wealth, and the Board of Directors is satisfied that there has been full disclosure to the donor of the possible future ramifications of the transaction.
- Gifts of Life Insurance
- The Organization will encourage donors to name the Organization as a beneficiary of all or a portion of a person’s life insurance policies.
- The Organization will not, however, as a matter of course, agree to accept gifts from donors for the purpose of purchasing life insurance on the donor’s life. Exceptions to this policy will be made after researching relevant state laws to assure the Organization has an insurable interest under applicable state law.
- No insurance products may be endorsed by the Organization for use in marketing or funding gifts to the Organization. In no event shall lists of the Organization’s donors be furnished to anyone for the purpose of marketing life insurance for the benefit of donors or the Organization. This policy is based on the fact that this practice represents a potential conflict of interest, may cause donor relations problems, and may subject the Organization to state insurance regulation should the activity be construed as involvement in the marketing of life insurance.
- Retirement Plan Beneficiary Designations.The Organization welcomes the opportunity to be named as a beneficiary of a donor’s retirement plan. Such designation shall be considered a revocable gift and not recorded as revenue until the designation becomes irrevocable, typically at the death of the donor.
- The Organization welcomes the opportunity to be named as a beneficiary of donors’ trusts, such as charitable remainder trusts (CRTs), charitable lead trusts (CLTs), and revocable trust arrangements. However, the Organization will not serve as a trustee of any trust and instead shall encourage donors to use a professional fiduciary.
- Charitable Gift Annuities.The Organization may offer charitable gift annuities to be administered by an approved third party. Approved third-party Charitable Gift Annuity (“CGA”) administrators are:
- National Christian Foundation
- Signatry Foundation
Additional third-party administrators may be approved by the Board of Directors. The CGA contract is between the donor and the third-party administrator on behalf of the Organization.
Requirements for CGAs are set by the third-party administrator, and currently include the following:
- The minimum gift for funding is $10,000.
- The minimum age for life-income beneficiaries of a gift annuity shall be 55.
- Where a deferred gift annuity is offered, the minimum age for life-income beneficiaries shall be 45.
- No more than two life-income beneficiaries will be permitted for any gift annuity.
- Annuity payments may be made on a quarterly or annual schedule.
- CGAs may be funded with cash or publically traded securities
- Preferenced Gifts, Designated Gifts and Designated Accounts
- Preferenced Gifts
- Christian Health Service Corps maintains full control over all funds donated, and ultimate discretion as to their use, including redirection to other Organizational needs. This ensures that all funds will be used most effectively to carry out the Organization’s charitable purposes, as required for contributions to be tax-deductible in the United States.
- Donor’s designations will be treated as preferences unless the Board of Directors has approved of the express donor designation before receiving the gift. The Organization will attempt, whenever consistent with its charitable purposes and budget, to honor the donor’s preferences regarding the use of their gifts.
- Christian Health Service Corps is committed to stewarding finances to have the greatest impact on the mission field. An assessed percentage of preferenced donations, up to the percentage approved by the Board, may be used to cover the administrative and fundraising costs thus associated.
- All donations received by the organization, including those received under deputized fundraising, and/or raised by deputized staff member are subject to this Gift Acceptance Policy.
- Establishing Designated Funds
- The Board of Directors, with input from the organization’s CEO, will determine what designated accounts can or may be established.
- Any donor giving greater than $25,000 to the organization may request in writing to the Board of Directors the establishment of a designated account. If accepted once an account is established, the Organization may accept funds into that account.
- The Board of Directors will determine the length of time the account shall exist. When that time has passed, the Board of Directors may either extend the time period for expiration of the account or transfer any remaining funds to the general fund.
- Preferenced Gifts
- Disbursing Designated Funds
- If, at any time, the Organization accepts custody of designated accounts that have not been approved and established by the Board of Directors, and the Organization does not intend to use the designated funds for the purpose designated, the Organization will return the monies to the donor or contact the donor for permission to transfer the funds to another fund or another charity chosen by the donor.
- Dispute Resolution
- Christian Health Service Corps, a Texas nonprofit corporation, (“CHSC”) as a Christian organization, believes that the Bible commands Christians to make every effort to live at peace and to resolve disputes with each other in private or within the Christian church (see Matthew 18:15-20; 1 Corinthians 6:1-8). Therefore, by donating to CHSC, the Donor agrees that any claim or dispute arising from or related to such a donation shall be settled by biblically-based mediation and, if necessary, legally binding arbitration in accordance with the Rules of Procedure for Christian Conciliation of the Institute for Christian Conciliation, (complete text of the Rules is available at www.iccpeace.com). Judgment upon an arbitration decision may be entered in any court of competent jurisdiction. Donors agree that these methods shall be the sole remedy for any controversy or claim arising out of a donation and expressly waive all rights to file a lawsuit in any civil court against CHSC for such disputes, except to enforce an arbitration decision.
- Organization employees and volunteers shall not provide legal, accounting, tax, or financial advice to donors or prospective donors.
- No finder’s fee or commission shall be paid to anyone as consideration for directing a gift to the Organization.
- The Organization may seek the advice of legal counsel when considering certain gifts. The donor may be asked to share the costs of such advice, at the discretion of the Organization’s President. Generally, legal counsel will be sought in connection with gifts involving:
- Closely held stock, and particularly when the stock is subject to restrictions or buy-sell agreements;
- Gifts involving contracts that bind the Organization, such as bargain sales or real property with a mortgage attached;
- Gifts of patents, intangibles, and intellectual property;
- Transactions with potential conflicts of interest; and
- Other instances at the discretion of the Board of Directors or the President, except that the Organization shall always seek the advice of legal counsel when accepting a gift outside the parameters of these Gift Acceptance Policies.
- It is the responsibility of the donor to secure an appraisal of a gift to the Organization when an appraisal is necessary.
This policy was adopted by a resolution of the Board of Directors of Christian Health Service Corps.
Missionary Budget Policy and Process
This budget policy was developed to assure adherence to IRS guidelines for deputized fundraising that govern all mission agencies using this form of fundraising.
It is important to remember that all gifts are under the control of the Christian Health Service Corps (CHSC) board of directors to be used exclusively for CHSC tax exempt purposes. CHSC’s primary tax exempt purpose is the provision of healthcare ministry through you, our field staff and partners. According to IRS regulations, gifts to or for specific individual missionaries and workers are not considered tax-deductible contributions. However, gifts to support the ministry of missionaries and religious workers are charitable contributions. They are considered tax deductible because they are in support of the ministry rather than individuals, and only providing the agency retains complete control the donated funds. Accordingly, the Christian Health Service Corps board of directors must retain complete control of all contributions, and those donations must be intended exclusively for CHSC tax exempt purposes. According to the IRS, funds cannot be considered restricted for the use of any specific missionary or project since that would demonstrate the donor retains control of the donated funds. Neither donors nor CHSC missionaries may have any control of donated funds. Donors can express their preference for how their donations are used.
These are meant to keep CHSC in compliance with IRS guidelines. As a member of the ECFA we follow their interpretation of the IRS guidelines and submit to their direction as an accrediting organization. If you would like to know more about these guidelines and how they affect you in your missionary service please see the following ECFA resource. http://www.amazon.com/Charitable-Giving-Guide-Missionaries-Workers/dp/1936233134
Missionary partners are to submit projection of funds needed for living and ministry expenses at their chosen place of service before leaving for field service and then annually on or before October 1st. New missionaries are to submit a budget to CHSC administrative staff for review and approval prior to commencing fundraising efforts. Budgets are to have two sections. One section will project all ministry expenses including travel to and from the field and all expenses related to carry out the particular ministry at that location. The other section will consist of missionary partner stipend or compensation.
Budgets are approved by CHSC Chief Executive Officer and /or business manager based on CHSC Board of Director’s directives which include the following. Total budgets for expenses and compensation must be within 25% of average missionary total budget for comparable family size at the chosen service location. Calculating this average will also include other mission agency budgets for that regional or specific service location. Where no such averages for the specific locations are available missionary partner compensation other assessments of local cost of living in the proposed service location will be made to find a usable cost of living. Budgets outside the 25% above or below the established local benchmark can be submitted but require approval by CHSC board of directors and must include a written explanation for the needed variance. Total budgets (personal plus ministry expenses) exceeding $10,000 per month also require CHSC board approval.
Programs or projects developed and/or initiated by missionary partners should be documented as a program proposal outline containing a separate budget. Examples of such projects are community or regional health initiatives, hospital infrastructure development, hospital housing etc. Expenses for such projects should not be included in missionary general ministry expenses. In order for projects to be approved they must serve the public good in the country of service and be within the tax exempt purposes of the Christian Health Service Corps.
Self-supporting missionaries who seek to serve through CHSC but whose primary source of income is social security, public or private pension, family trust etc. are subject to same budget requirements. However, those who fall into the self-supporting missionary category must raise 25% of their annual budget through CHSC. Self-supporting missionaries are not entitled to a monthly stipend or compensation; however they are eligible for expense reimbursement. Self-supporting missionary partners are considered volunteers; the 25% of their budget is raised for ministry expenses. Any CHSC missionary partner may personally donate funds preferenced for their present or future service with CHSC.
The first part of the budget is considered compensation or a missionary stipend. This will usually range from one half to two thirds your total budget. Housing and food purchased for home use are considered personal living expenses for most CHSC missionaries and therefore fall in the compensation portion of your budget. Missionaries who are ordained ministers and possess a certificate of ordination from seminary, church or denomination may claim their housing costs as a legitimate ministry /business expense (see housing and ministerial compensation). Online certificates of ordination are not accepted by IRS standards. Stipends are paid monthly and the entire stipend is considered reportable as income to the IRS. Missionaries who live on the hospital or mission grounds may qualify for CHSC to cover housing fees with the receiving partner facility under the IRS “convenience of the employer” or “Lodging on Your Business Premises” excluding them from taxable income.
The Christian Health Service Corps uses an Accountable Expense Reimbursement Plan.
An accountable expense plan is a reimbursement or expense allowance arrangement set up by a ministry, which requires:
(1) a business purpose for the expenses,
(2) substantiation of expenses to the employer, and
(3) the return of any excess reimbursements.
The substantiation of expenses and the return of excess reimbursements must be handled within a reasonable time. The following methods meet the “reasonable time” definition:
The fixed date method applies if 1) an advance is made within 30 days of the time an expense is paid or incurred; 2) an expense is substantiated to the employer within 60 days of the time the expense is paid or incurred; and 3) any excess amount is returned to the employer within 120 days of the date the expense is paid or incurred.
Expenses are reimbursed monthly or within 60 days of the expense being incurred but are separate and apart from any stipends or compensation. Missionaries must submit a request for reimbursement listing all expenses for which they are requesting reimbursement. This form must be submitted to the CHSC business manager or CEO within 60 days of the incurred expense in order to receive reimbursement and be classified as a CHSC expense and not counted as income for the missionary partner. The missionary partner can deduct those expenses not submitted to CHSC off their taxes if it is a qualified ministry/ business expense. Missionary partners may also request an advance for projected expenses for upcoming travel expenses but must submit receipts to document such expenses after they are incurred. Funds not used and documented for ministry expenses must be returned to CHSC for later use. Reimbursement request must be made as US dollar currency. Missionary partners are expected to calculate the rate of exchange when the funds were spent. Some in country expenditures are difficult document with receipts. It is recommended you document those expenses as they occur and record them on your expense log with a notation that you were unable to obtain a receipt for that specific expenditure. Wherever receipts are available we request they be obtained and submitted with the expense reimbursement form. CHSC may choose to allocate any expense not documented with a receipt or questionable as a ministry expense to missionary partner income statement. The missionary partner will be notified if this occurs so they can claim the expense personally rather than CHSC claiming the expense.
Owning Housing in the Receiving Country (Recent Update to Existing Housing Policy)
Because ownership rights of land and housing can vary so much between countries, CSHC missionary partners are strongly discouraged from purchasing land or housing in their country of service. Many missionaries have been dragged into many years of ownership disputes because of purchasing housing in their country of service. CHSC missionary partners can never use CHSC mission agency funds to purchase personally owned real estate or housing in their country of service. Missionary partners are not prohibited from making such purchases with their personal funds.
On occasion additional housing must be built to house CHSC staff at a particular facility. When this occurs a specific project proposal must be submitted to CHSC with a separate capitol project budget and a separate project fund is established. Funds raised for missionary housing through CHSC may benefit the receiving facility but they may not bring personal benefit to CHSC missionary partners. As such, housing project funds must be raised apart from and kept separate from the missionary partners ministry account. The housing project must be owned and controlled by the receiving program or facility and be of long-term benefit to the receiving program. The missionary may occupy that housing during their time of service, but they may not own the house or property since that could be construed as personal benefit from funds donated for CHSC tax exempt ministry purposes. CHSC may lease or own housing at board approved mission hospital sites.
Missionary partners may also not receive personal benefit from ownership of the vehicle purchased with CSHC agency funds. However, due to ownership challenges of owning and registering vehicles in multiple countries CSHC has established the following policy for vehicles purchased with CHSC agency funds. Vehicles purchased for ministry purposes may 1) be placed in the name of the receiving hospital or health program or 2) purchased by CHSC, for CHSC tax exempt purposes, registered in either the name of CHSC or missionary partner as guided by law in the country of service. Vehicles purchased with CHSC ministry funds must be used for CHSC ministry activities for the time the missionary serves at that location. When the missionary’s time of service ends, the vehicle must be sold and any proceeds received from the sale of the vehicle along with paperwork documenting the transaction must be returned to CHSC office manager. Under these circumstances CHSC would consider the purchase, maintenance, and fuel for the vehicle as a necessary CHSC ministry expense.
Missionary budgets are approved by CEO unless they exceed $10,000 at which point they require CHSC board approval. Project accounts require board approval which entails the submission of a proposal or project description with a separate budget.
Two budget sections: 1) Projected personal expenses 2) projected ministry expenses. Ministry expenses do not need to be submitted monthly but do need to be submitted within 60 days of the incurred expense.
Budgets for expenses and compensation must be within 25% of average missionary budget for comparable family size at the chosen service location. Variances require board approval.
Expense reimbursement requests and budgets must be submitted in US currency.
Self-supporting missionary partners are considered volunteers; and they must raise 25% of their total budget to be applied toward their ministry expenses. They are not entitled to a monthly stipend or compensation; however they are eligible for expense reimbursement.
Missionary partners may also not receive personal benefit from ownership of real estate, vehicles or any other items purchased with CSHC agency funds.