Missions Trips, the most common summer church activity.
Let’s talk about tax deductibility
Donations for a trip can be deductible if the donation 1) is a gift to or 2) for the use of a qualified charitable organization. The first step with missions trips is determining the primary purpose of the trip. A direct connection must exist between the trip expenses and the charitable, volunteer services being performed. The purpose needs to be primarily to minister to others in the name of the church.
There cannot be a significant element of personal pleasure and recreation as the IRS does not want donors receiving deductions for vacations in the name of charitable work. Sometimes the donations are partially deductible and non-deductible. For example, a safari day during the missions trip would not be deductible. So if the trip was $1,000 and the safari cost $100, only $900 would be deductible assuming everything else is primarily charitable work.
A donor cannot restrict their gift to a specific person going on the trip and still receive a tax deduction. All donations need to be given knowing that the charitable organization ultimately maintains control over the final use of the funds. It’s better to have a general fundraising pool of funds rather than individual funds for the attendees. Also, if the trip is cancelled, the funds may not be returned if the donor still wants a tax deduction.
Here are examples of suggested language for communication to donors to ensure tax deductibility:
- Donor response documents:
- “This contribution is made with the understanding that the donee charity has complete control and administration over the use of the donated funds.”
- Solicitation letters:
- “Contributions are solicited with the understanding that the donee charity has complete discretion and control over the use of all donated funds.”
- Communicating the ministry discretion and control policy to donors:
- “Contributions are solicited with the understanding that the Church has complete discretion and control over the use of all donated funds. The Church will attempt to honor gifts preferenced to support particular individuals but the final decision on the use of all funds rests with the Church.”