Ok, here is my situation. I have a friend who needs adaptive equipment in the form of a service dog. The Commission for the blind is not an option because the animal needs to be dual trained as a seizure assist as well, which is not allowed by the organization. Well, a local pastor stepped forward and said that he was set up a fund just for her cause. He told her it was a 501C3 so that it people would be encouraged to donate because of the tax benefits. Well, that said he has behaved in a particular shady fashion since this all started and now will not even tell her exactly how much has been contributed. He has, in the past, given and offered her money to do such things like put a deposit on the dog, all the while saying that he would just reimburse himself from the 501C3 fund as money was contributed. Is this possible? And if so, why was so shifty and hesitant when she asked for cash out of this fund because the vendor/breeder she wants to work with does not except checks. And this pastor says the only way to get funds out is to write a check from the church directly to whatever vendors she wants to use. But if this is the case, then how can he reimburse himself?? Please help clear the confusion so we can know the real story behind disperment of funds to a recipient! Thanks in advance

ScottGem

501(C) is a section of the US tax code that governs non-profit organizations and charities.

I would also be concerned if the pastor does not provide regular statements of activity for this fund. I can understand that disbursements need to be made by check for accounting purposes.

tj75

Thanks, Scott. I do worry that the Pastor practically refuses to disclose accounting information. After calling the IRS, I have found that a church, while eligible for 501C3 status, cannot then create a special fund with 501C3 status for an individual. Thus, that is atleast one lie he has told my friend. But let me ask - if the 501C3 applies to the church as a whole, does that mean any "special fund" created is in actuality simply a discretionary fund whose monies can be used in any charitable activity, i.e. helping community memember with grocies, light bills, etc. as well as donation of adaptive equipment (as my friend needs)? My friend rec'd a grant from an organization for 800 dollars toward getting her service dog, she then turned around and gave that money to the pastor who now refuses to release it back to her. Is this because the money is now considered a donation to the church and, as mentioned above, the pastor has no obligation to contribute the money to her or her cause? I, too, see the benefit of working with checks for accounting, but is it absolutely necessary if the person she works with does not deal with checks. For accounting and IRS purposes will not a receipt from the vendor be equally valid as a cleared check?

ScottGem

I'm not really sure about that. You might want to repost this in the Tax forum.

tj75

Okay, thanks for your help, Scott. I really just need to know if the way this guy (pastor) is operating is legitimate. I'll repost in the tax section, but tell me, what should she looking for or asking to know that everything is above board? I wouldn't want to think of a church being dishonest, but his actions seem fishy. Thanks again, I'll repost my previous in the other section.

valinors_sorrow

I think you best call the Attorney General's office of the state you live in or the local authorities to look into the legality of what the pastor is doing. There is too much in what you say to suggest that your friend is being taken to the cleaners. Sadly 501c3 non-profit fraud is one of the fastest rising crimes in America.