Great Commission Fund Results through February 28, 2006
C&MA Leadership Changes Duane Wheeland was selected by the Orchard Board of Stewards and affirmed by the C&MA Board to serve as the next President of The Orchard Foundation (TOF). Duane will also serve as the Executive Director for Funding of the C&MA. Ken Baldes was affirmed by the C&MA Board of Directors to serve as Vice President for Operations/ Treasurer. Ken previously served as a Senior Vice President of HSBC Bank USA, NA.

Great Commission Fund Results through November 30, 2005
Total YTD revenues for the five months ending November 30 equal $13,652,000, or 96 percent of the revenue budget of $14,223,000. This represents improvement from November 2004 when YTD revenues were 88.3 percent of budget. Please pray that we will receive strong sacrificial giving in December and have a strong finish to the first six months of the fiscal year ending June 30, 2006.

GCF Update
»Click Here to see the current Great Commission Fund figures.

Treasurer's Update Archives
»Click Here to see archived editions of the Treasurer's Update.

Housing/Parsonage Allowance
Your church board should approve, in writing, a 2006 housing/parsonage allowance for your pastor(s) before the end of 2005. Legislation was passed in 2002 that limits the excludable amount of housing allowance for pastors who own their own homes to "not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities." We recommend that this housing allowance be approved as a continuing resolution so it will not expire if the board does not consider it the following year. An example of this follows:



Year-End Giving Opportunities
Your church has received a supply of year-end bulletin inserts, describing projects made possible through the Great Commission Fund. The year-end materials will assist you in promoting a special offering to keep us on the job among hurricane survivors in the Southern and Southwestern Districts. With your help, The Alliance will maintain a long-term presence in coastal Louisiana, Mississippi, and Texas—helping people begin again, giving hope, and meeting spiritual and emotional needs. We ask that you include any year-end gifts with your regular monthly remittance and send to the National Office by December 31, 2005, if you want this included in December income.

Christmas Gifts
In most cases, gifts made by the church or congregation to pastors and/or staff should be considered taxable income and not tax-free gifts and should be reported as income on the recipients' W-2.

Year-End Remittances
All church remittances received in the Finance Office through December 31, 2005, will be included in December 2005 income. With the change to a fiscal year, church remittances received the first week of January will be included in January 2006 income. Gifts from individual donors postmarked by December 31, 2005, and received by January 6, 2006, will be included in December 2005 income.

Unrelated Business Income Tax
We strongly recommend that you investigate whether or not you may have an unrelated business income tax (UBIT) liability if your church receives income from any source other than charitable contributions. One common misconception about churches is that any income they generate is non-taxable. In fact, it is quite common for churches to generate income that is fully taxable. The IRS is concerned with how your income is generated, regardless of whether or not it is ultimately used for your tax-exempt ministry. Therefore, it is important to look at the source of your income rather than the ultimate use of it to determine if it is tax-exempt.

One of the more common sources of potentially taxable income for churches is rental income. Since The Alliance Development Fund, Inc. (ADF) encounters this fairly often when helping churches with funding for capital projects, ADF decided to create a tool to help consider whether or not a church may be incurring a potential tax liability as a result of its activities. To help in this decision making process, please take advantage of the UBIT decision matrix tool found on the ADF Web site by going to www.adf-inc.com, Church Services tab, and then clicking on the Unrelated Income link.

Contribution Substantiation Requirements
Donors who give individual contributions of $250 or more must have a receipt or statement in their possession for such contributions before they file their tax returns in order to deduct these gifts. The written acknowledgment must state that no goods or services were provided in exchange for these gifts. Please give these statements to your people as early in 2006 as possible. You may want to remind your congregation not to file their individual returns until receipts or statements have been received.

Standard Mileage Rates
The IRS has issued the standard mileage rates for 2006. The business purpose mileage will be 44.5 cents per mile, an increase from 40.5 cents per mile for most of 2004. Charitable mileage remains at 14 cents.

Opting Out of Social Security
We often receive questions about opting out of Social Security. Opting out of paying self-employment (Social Security) taxes is allowed in the first two years of receiving ministry income. The only valid basis for electing to opt out is a moral or religious objection to receiving payments from the government for items such as death, disability, retirement, old age, or medical services. The C&MA position's is one of neutrality. If an individual official worker has an honest moral or religious objection to receiving benefits from the government, then the denomination will support that individual's right to hold that position. We cannot support in any way a pastor opting out of Social Security for financial reasons. This is not allowed by law nor is it financially wise in our experience of dealing with retiring pastors.

Finance Manual for Church Treasurers (and Pastors)
A new edition of the Finance Manual for Church has been published on the C&MA Web site. The Finance Manual can be found in the Alliance Resource Center (www.cmalliance.org/resources/books/books.jsp).

Thank you for your sacrificial support and prayers for The Christian and Missionary Alliance.

Ken Baldes
Vice President for Operations/Treasurer