Treasurer’s Update

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Great Commission Fund (GCF) Results through February 28, 2009

Total revenues for the eight months ending February 28 equal $26,188,000, or 97.6 percent of the revenue budget of $26,830,000. GCF expenses have been held to 95.6 percent of the expense budget resulting in a net income from operations of $630,000 through eight months, a favorable variance of $540,000 compared to a budgeted income of $90,000. However, GCF giving is projected at less than 90 percent of budget for March through June 2009 which would result in YTD revenues falling to approximately 94.2 percent of budget. The current decline in giving started in November 2008 but has been offset in part by a generous contribution received in February. As a result of our Lord’s provision, we rejoice that we will not need to implement salary reductions for personnel who are paid from the GCF. However, this is an issue that we will need to reevaluate with the Board of Directors at our May meeting. Thank God for His gracious provision.

Please be in prayer that the people of The Alliance would continue to exhibit sacrificial giving in response to God’s provision even during tough economic times.

A Look Ahead

As we look ahead to the end of our fiscal year and to 2009–2010 for budget planning purposes, we still need to take decisive action. We are projecting to end this year with a $2.4 million shortfall from budgeted income. The Board of Directors approved a budget for 2009–2010 of $37.5 million, $3.2 million less than this year’s budget, but more in line with our expected income. With our budget adjustments we will not be able to support the number of personnel we currently have. As a result, we will need to make project and personnel reductions at home and overseas.

We believe that our potential for increasing revenue lies in having more people participate rather than in asking the faithful to give more. We will continue to sing “the song of the Lord” as we look to Him as our Provider. We are committed to carefully steward every dollar that is given to Alliance Great Commission Ministries and be relentless in Kingdom advance.

Great Commission Sunday

On Great Commission Sunday in May, Alliance people will have the opportunity to express their commitment to reaching lost people by giving an extra gift to Alliance Great Commission Ministries. As Church Treasurer, please indicate the amount of this special offering on your church’s monthly remittance. A special field for recording the offering total will be included on the remittance form for May. We appreciate your church leadership team encouraging 100 percent participation as we partner together in the worldwide work of The Alliance.

Resources will include bulletin inserts, a FAQ sheet, and a video with segments featuring the frontier mission of Mongolia. Watch for the promotion kit to arrive in early April. If you have questions, please contact Communications at communications@cmalliance.org or 719-265-2014.

Church Treasurer’s Seminar

A seminar for church treasurers will be held at 1:30 on Friday, May 29 at General Council in Louisville. You may register online for this free seminar when you register for General Council 2009. If you have already registered for General Council, please call (877) 284-3262 Option #5 to add this seminar to your registration.

Proposed Limits to Charitable Contributions

Congress will be considering legislation that could place limits on the tax-deductibility of charitable contributions. For more information, see the Evangelical Council for Financial Accountability. Please encourage people to contact their representatives regarding this serious matter as it could limit funding to our churches.

FDIC Insurance

FDIC insurance coverage has been temporarily increased to $250,000 from $100,000 through December 31, 2009. With the potential for additional bank failures, it is wise for our churches to ensure that bank balances do not exceed these levels.

Annual Church Audits

It is a good practice for churches to conduct an annual audit. The audit consists of a variety of tests, questions, and review procedures. These help determine whether all financial transactions have been properly accounted for and have been represented fairly in the financial reports. The audit also evaluates the procedures the church is using to account for finances. These procedures are designed to protect both the treasurer and the church.

Your church governance authority should appoint several individuals to conduct the audit each year. It is helpful if the people who are appointed are knowledgeable in finance or accounting. The church also may consider having a professional, independent audit or review performed by a CPA every two or three years, especially if your church has a school or day care.

Donations of Autos

The IRS Publication 4302 addresses many of the tax issues related to a church accepting an automobile.

In general, donations made from one individual to another individual are not tax deductible. If a donor wants to give an automobile to your pastor or a church member to receive a tax deduction, we advise that the church member gift the vehicle directly to the pastor or church member. (no tax deduction for the church member and no income to the pastor) There is no tax-exempt purpose for the church to be involved in personal gifts.

The church is responsible for setting the pastor’s compensation. If the church board communicates that there is a need to provide the pastor with a vehicle for church use, and a church member responds by offering to donate an auto to the church, it would be appropriate for the church to accept this vehicle donation. You should refer to the attached IRS publication for the necessary steps for the church to process this contribution. However, the church would need to assume the title to the vehicle, acquire insurance coverage, and have a process to track personal use of the vehicle by the pastor to include as a taxable benefit on his W-2.

Because of past abuses related to donated vehicles, the IRS has implemented requirements that place limits on how charities can handle these donations. If your church were to accept the vehicle and then transfer to the pastor as compensation, the tax deduction to the church member could not exceed the amount of income attributed to your pastor. Since your pastor would pay 15.3 percent self-employment tax along with any federal and state income tax on the value of the auto, this is not the recommended approach.

IRA Rollover Provisions Approved by Congress

Congress has recently extended an IRA rollover provision for contributions completed by December 31, 2008. If you are over age 70 ½, you are allowed to rollover up to $100,000 from your traditional or Roth IRA without any additional taxes. All you need to do is contact your IRA custodian and request that an amount be transferred to The Christian and Missionary Alliance. If you would like more information, please contact Joseph Padilla at 1-888-689-6300 or e-mail him at padillaj@theorchard.org.

Standard Mileage Rates

The Internal Revenue Service (IRS) has decreased the standard mileage rates effective January 1, 2009 to 55 cents per mile, a decrease from 58.5 cents per mile for July through December 2008. This new rate may be used to reimburse employees tax free for mileage driven in their personal automobiles for 2009. This rate also may be used to value personal mileage in church-provided vehicles with a fair market value of $15,000 or less for inclusion on the employees W-2 as taxable income. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Tax Guide for Churches and Religious Organizations

The IRS offers a quick reference guide of federal tax law and procedures for churches and religious organizations to help them voluntarily comply with tax rules.

Alliance Benefits

C&MA Retirement Plan. Consider using the C&MA Retirement Plan as your only vendor! It is a “church plan” as recognized by the Internal Revenue Service, allowing official workers upon receiving retirement payments to offset the income against housing costs which will save on income taxes.

C&MA Health Plan. With the recent addition of Crown College, the Alliance Benefits health plan continues to grow. If you are interested in our plan, please contact our office at benefits@cmalliance.org. We offer a solid plan with competitive rates.

C&MA Fellowship Fund. Did you know that annual contributions to Fellowship Fund go to support 570 retired C&MA pastors and missionaries? Many rely on their monthly pension payments to make ends meet. Soon you will receive your annual report listing the amount.

The Alliance Development Fund (ADF)

Please read the attached letter from ADF president, Larry McCooey to learn how ADF remains well capitalized because of God’s provision.

Thank You

Thank you for serving at your church! If you need any other help, contact me an e-mail at baldesk@cmalliance.org.

Gratefully,

Ken Baldes
Vice President for Operations/Treasurer and COO