Something to Consider…

People love receiving gifts of appreciation We asked church leaders about the following situation:

Churches understand that volunteers are essential to doing ministry well and a key part of having good volunteers is showing appreciation from time to time. But there are right ways and there are wrong ways to show appreciation.

What are right ways of saying thanks?

No matter how talented or capable the staff members are at your church, your church could not exist without its volunteers. Yes, you’re probably seeing the 20/80 rule in practice. You know, where 20 percent of the people do 80 percent of the work. But even if that is the case, just think how little would get accomplished without dedicated volunteers and what a blessing they are to your church.

Volunteers serve without receiving anything in return. Usually they serve without even an expectation of receiving anything in return. Oftentimes it’s the joy of serving that is their reward.

When a church takes the time and effort to show appreciation in some way for its volunteers, the church demonstrates that it values them. While some may complain that the money spent on thank-you gifts would be better spent on ministry needs, when one looks at the overall picture, what greater ministry need exists than happy volunteers who feel appreciated and cared for?

There are all sorts of option that churches use to say thank-you to its volunteers. Some hold a catered banquet annually for their volunteers. Others give gifts of devotional books or bookmarks. Others send heart-felt thank-you notes throughout the year.

Many churches also choose to give gift cards. While they may be well received by your church’s volunteers and welcomed by your church’s leaders as easy and quick to acquire, they present problems that other forms of appreciation don’t.

Technically the Internal Revenue Service considers gift cards equivalent to money and when someone receives compensation (e.g. money) for services performed, they suddenly are considered to no longer be volunteers but instead become employees, which in turn results in possible tax consequences.

But there are no tax consequences if someone receives payments of less than one hundred dollars for services that they provide in a calendar year. So if your church really, really insists on giving volunteers gift cards as appreciation gifts, it can—so long as you keep track of who receives gift cards and in what amounts during a calendar year. So, if a church has volunteers that serve in several different ministries and each ministry gives them gift cards, the church needs documentation that the total received by each volunteer did not exceed 99 dollars.

Often churches do not go to the trouble of recording when they give gift cards as appreciation gifts. If no record is kept, there is no way that a church can defend the idea that no individual volunteer received more than 99 dollars for their service. The bottom line with gift cards is document, document, document.

Love Offerings

Many times a culture of generosity in a church extends well beyond its leadership and into the congregation. The result, especially during the holiday season, is a Love Gift to the pastoral staff. Love gifts can take a several different forms.

Individual congregants may give a pastor a check or cash gift. This generous person should understand that a personal gift cannot be considered tax deductible and the recipient should understand that they need to claim the gift as income on their tax return.

Sometimes the church organizes a special offering that is presented to the pastor. If the offering is passed on directly to the pastor the pastor needs to claim the offering as income on his or her tax return. Also, the donors need to understand that it is unlikely that their gift would be tax deductible because the church never really had any control over the gift. If the pastor exercises some degree of control over the decisions of the church, the issue of excessive compensation can be raised using this method to show appreciation for a pastor. The result at a minimum can be an excise tax on each member of the church’s governing body who allowed the offering to take place. At worst the church’s tax exemption could be revoked.

So how can a church go about showing appreciation to its pastoral staff and do so with integrity? When the church’s governing body decides on a special Love Gift offering, it needs to decide on maximum amounts that a pastor may receive so that his or her total compensation for the year is not considered excessive. When the board informs the congregation of the Love Gift offering, it needs to also inform the congregation what will be done with the money if the desired goal is exceeded. Lastly, the actual gift needs to be run through the church’s payroll system. When these steps are followed, it demonstrates that the church is in control of the money received—resulting in a tax deduction for donors if the usual receipting processes are followed.

People love to be appreciated when they perform some act of service for your church. Any burden of dealing with a misbehaving child in a Sunday School class or singing next to a off-pitch soprano in the choir can be lightened. The church becomes known for modeling generosity and having happy, joy-filled volunteers. And here’ the part we really like—showing appreciation with integrity honors our heavenly Father.

Please Note: This information is provided with the understanding that Church Administrative Professionals is not rendering professional advice or service.

Have an idea for a situation that you would like us to include on this page OR
Prefer to receive our periodic "In Pursuit of Excellence" analysis as an e-mail instead of as a postcard? Click Here

Deborah Miller, cca

Charles Kneyse

Click Here to Return to Top of Page