If you're not sure if your church can accept love offerings made to your pastor and church leadership, you've come to the right place! In this article, we'll share the financial and tax implications of love offerings. We'll also show some easier ways to collect them using online tools and some ideas to show your leadership more appreciation!
Your church leadership including pastors and other staff members share their gifts with the congregation weekly. Your congregants, in turn, may want to share their gratitude to them through financial or other gifts. Love offerings are just that – a way for the members of your congregation to express their love and appreciation for the church leadership. But many churches remain unsure about whether they should accept these gifts – and the best way to do it.
This article shares what the bible says about love offerings, how the IRS sees these gifts, and ideas to collect and share love offerings with your pastor.
A love offering is a designated gift from a member of your congregation and is usually meant for a pastor. Many churches allow their congregants to show their gratitude and appreciation to their church pastors with these offerings or financial gifts during the church service.
Traditionally, this was done by passing the plate during service. However, these days many churches use online donation forms to accept these offerings instead. Here’s an example of one in action!
Let us start with a simple example from the Bible –
Jesus spoke about the rich who’d visit the temple with bags of gold, hoping to gain God’s forgiveness and honor. Eventually, a poor widow arrived with two copper coins. Jesus called his disciples over to watch this action and said it meant more to God because it was all she had to give, and she gave it willingly.
What do we take away from this?
Your church’s love offerings go to pastors, musicians, and others participating in the services. They serve as a thank-you for all their hard work – and there’s no minimum requirement to give. Therefore, people should give whatever amount they feel fits how the sermons or music made them feel at the church. Ask your parishioners what the service meant to them and how much they’d pay for the same feeling outside of the church.
The Internal Revenue Service (IRS) doesn’t give many specifics regarding love offerings. But there are rules restricting financial gifts to employees.
De minimis gifts are seen by the IRS as so small that accounting for them is unreasonable or impractical. A few examples of this include –
In most cases, cash and gift cards do not qualify for this exemption. Hence, you may need to be careful about significant financial gifts being offered to your pastors or other staff.
The IRS does allow organizations to give employees rewards for longevity with the organization or for meeting other job requirements. However, when this includes forwarding financial gifts to them from congregants, there will be restrictions.
Restrictions that come with employee rewards include –
In 1995, The 8th Circuit Court ruled in Goodwin v. United States. Their ruling provided more details on what is allowed for love offerings.
Reverend Goodwin received significant gifts from church members for years. The court found that these gifts were taxable income since the church collected and paid these gifts to the pastor.
This ruling and others determine that love offerings, given on Christmas, birthdays, anniversaries, or other occasions, are not tax deductible for donors and must be reported on the pastor’s W2s or 1099 if over $600 annually.
However, if love offerings are being made directly to the pastor, the gift is not taxable income for the recipient. This applies to all individual gifts less than $15,000 a year per donor. If it exceeds, the donor must file a gift tax return.
Keeping these rules and restrictions in mind, churches must be mindful about accepting financial or other gifts for their pastors or employees.
Please educate all your staff about these rules and tax information. Let congregants know what these gifts mean for them in terms of tax deductibility. Nobody should remain in the dark about the future of these gifts.
If you’re keen on accepting love offerings and want to reward your pastor and staff, there are several ways to make it simple for your congregation.
Some churches include love offerings as a regular practice. They collect love offerings by passing the offering plate or basket throughout the congregation.
Your church can make this a surprise by giving the pastor a day off and collecting funds during services that day. Take time to share how your minister has made a difference in the church, and ask individuals of all ages to share their testimonials. Be ready for a few tears of joy!
Make it even easier to collect love offerings by allowing your donors to use Donorbox Text-to-Give. Donorbox makes it easy to enable this feature and get unique campaign IDs. There are two plans for you to choose from – the short code plan, which allows you to create a custom keyword and provide your donors with the shortcode 801801 to text, and the basic plan.
Your congregation can text the ID or custom keyword to the number and receive a mobile-friendly link to a donation page to complete the payment, where they can use Apple Pay and Google Pay, among other digital wallets. That’s all! It takes only a few minutes. They can repeat their gift at any time through text.
60% of church members say they’re willing to give digitally. Giving church members the option to provide love offerings online is an easy and convenient way to collect these funds.
Churches can create a campaign page online, share the reason for this gift, and email church members to ask for their patronage. The same can be done at the church service as well. You can talk about this online page and share a QR code with all. Ask them to go to this page and make their offerings there.
Do mention the tax deductibility and other important information on the page itself. Encourage all to read the content before making their love offerings.
The following page was created by Ambassadors Global Church for accepting love offerings. You can create unlimited campaigns on Donorbox for free, and a free QR code is automatically generated for each one!
Pastor Appreciation Day is celebrated on the second Sunday of October. Churches hold campaigns and events on Pastor Appreciation Day and see it as an opportunity to share how sermons affect individuals and make a difference in their lives.
You can get creative in sharing your appreciation and love during this celebration. One way to do this is with children’s projects. Ask your Sunday school classes or youth ministry to create an art piece or performance to share during the service. These unique gifts are heartfelt and can mean more than any financial gift.
However, if you’re open to receiving financial gifts as well, keep your audience of parents and other congregants aware of the options available.
Here is what Power of Worship does – they encourage people to share their feelings about the pastor through a Google form and allow them to make financial gifts via their online donation page.
Some individuals may want to give love offerings to the pastor on their own. If they wish to collect significant amounts, you can help them start their own peer-to-peer campaign.
Donorbox Peer-to-Peer makes this a breeze for all organizations – including churches! You can easily set up a peer-to-peer campaign and invite members of your congregation. They’ll sign up and set up their own fundraising pages. That’s all – now they can raise money from their networks for your pastor!
The below step-by-step guide will help you get started with Donorbox Peer-to-Peer right away!
Remind them of the $15,000 annual gift limit, and ensure they share that these gifts are not tax deductible. You must explain the financial restrictions and oversee these campaigns to ensure they remain legal and ethical.
In the end, financial love offerings for your pastor may be seen as taxable income. So, instead of collecting funds, you may want to see where else your congregation can help.
Most pastors live in homes provided by the church. These homes are often run down and could use tender love and care. Your church can plan a day of cleaning and home repair as a surprise for your pastor and his family.
If planning a day like this may be too difficult, you can create a job list and sign up volunteers to stop in on their days off to offer their expertise and appreciation.
If your church chooses to hold a love offering, be sure to consider the following things.
Is your church operating at a profit or loss? This is an important question to ask yourselves before collecting funds like this.
Your parishioners want the church to remain financially healthy. They are there to hear the word of God and feel His love. Your church must collect offerings and tithing to keep the church going. If you have difficulty collecting funds for these needs, a love offering may not be viable.
Before collecting a love offering, you must look at your organization’s financial reports and budgets to determine how much can be paid.
After determining that a love offering is the right financial choice, it is time to get your board’s approval. Your board of directors is the leadership of your church and, as such, should be the final decision-maker.
In many cases, board members will be willing and excited to collect and give love offerings to a well-loved pastor. But you must ensure they understand the rules and regulations of these gifts.
Once they approve of the love offering, get them involved. Ask them to brainstorm creative ideas and contact church members and businesses to make their ideas a reality.
As you collect these funds, you must keep them separate from other tithes and offerings. Your budgets and financial reports must show which funds are tax-exempt and which are not.
Also, when asking people to give a love offering, ensure they understand that their gifts are not tax deductible. There should be no confusion among your parishioners and staff members.
Your church can collect and give a love offering to pastoral staff and others. Stay creative and true to Jesus’s teachings when asking for donations. Be entirely transparent about how the gift is used and the tax rules regarding their gifts.
Churches can collect these offerings in several ways, but adding a digital fundraising option is simple and convenient for all. Check out Donorbox – an all-in-one online fundraising solution offering robust and affordable features. You can sign up for free and get started in about 15 minutes!
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Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor