Hi, I originally posted under philanthropy/charity and was directed to repost here for possible insight. Below are my two posts, if you can shed any light on the topic, I'd much appreciate it:

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

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 at least 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?

The pastor would be merely using the church ( which does not have to apply for a letter of determination but is tax exempt under 501c automaticly)

And actually a fund to help buy a dog for someone would not most likely fall under the 501c but another since there would have to be a foundation estabilshed that foundation would have to incorporate and then apply for tax exempt status.

He was merely taking the money and putting it into the churches general account and allowing money paid in to be considered a donation to the church. Then he was going to take money from the church and pay for the dog expenses, as charity work from the church.
( While most likely on the shady side of legal, in small towns and in areas where people know each other this sort of thing is done all the time.)

We have taken money for people during the hurricane and did not set up a separate fund, but merely put the money into the general fund, and then paid out the check to the people hurt by the huricane. We do a lot of this if a church member dies and allow people to donate to the church on their behalf and then give them the money.

And of course I would also worry about a company that would not accept checks, esp if they are holding the dog and the check will clear first.

But it is also possible the pastor is a very bad book keeper and has a good heart and does not remember how much money was paid in, but was willing to pay money from the church for the dog.

For small churches I don't like the pastor keeping the money, I do have control in our church of the National Bishops Fund but it is always best to have or require two members to sign a check for funds to be paid out.
( and this is what that paster may need to have done, to take money out of the church, is to have a church member co sign, so he has to write a check.

What that paster did in offering to do this is very common ( not maybe with a dog) but the general concept, done a lot, may not be perfectly legal but they do it to help people in a short time frame. Normally there is never a separate account physcially in the bank, but merely an "accout" as for as they keep track of how much comes in and what they give out.

Fr Chuck's experience and expertise far exceed mine in this particular matter.

I yield to his superior knowledge!

Fr Chuck,

Thank you so much for taking the time to discuss my question/situation at length. The reason the breeder my friend is considering doesn't take checks is because she is out of state. The nature of the need that my friend has is not easily met locally. To find the temperament and physical requirements of her living adaptive equipment, can easily take her search to other states. She is careful to deal with reputable dealers. I do see that, while perhaps not entirely legal, this form of collection arising from time to time. In fact, we were both well pleased that the pastor offered as my friend seemed out of options as to raise so much money on her own. The issues with the fund and its disbursement really became a problem when he would not tell her how much was there. Indeed, would not even verify it with her later. First, it was 2000 and then he told her 1400. BTW $800 of any amount in there came from a grant that she turned over to the fund. However, after reading your reply, I am more inclined to see things from the "other" side. I know accounting is easier with checks, I also know that not all of us are born with excellent bookkeeping skills. Also, I'm willing to admit that some of the "shadiness" I've observed stems more from the desire to help not harm, with regard to sometimes questionable practices some church adopt from time to time that you mentioned previously. There are issues that I still object too, namely him boasting about how much money he will raise because of his ties to prominent people in his New England communtiy, but after 7 months still throws out 1400-2000 available in funds, including the 800 from the grant. So basically, perhaps this is more a matter of personality conflicts. I do see and I'm pretty convinced that nothing illegitimate is going on. Thank you revealing some of the inner mechanisms of churches in the community that I was mostly unaware of!

Atlanta - thanks for reading, too!