Paying a church intern's "salary"?

3,161 Views | 25 Replies | Last: 1 yr ago by Dilettante
Scotts Tot
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AG
We have a babysitter who is out of college and hopes to go to seminary soon. She is in a program at a local church (large non-denominational Bible church), which is billed as a training internship for prospective ministers.

The arrangement between her and the church is set up such that the church pays her nothing for her work as a college minister in-training. She is expected to raise her own salary through private donations. What feels odd to me is that donations for her salary are instructed to go to the church, which "retains discretion over the use of the funds".

I have seen plenty of people asking for help to raise money for seminary tuition, but this arrangement feels weird. I would think the church should just call it an unpaid internship and tell her she's on her own for living expenses. The dynamic of having donors give directly to the church (which they may or may not attend) to pay her salary, and for the church to say they can do what they want with funds, seems fishy. Is this a common thing?
powerbelly
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I have never been a member of a church that operated that way, but ministries like CRU and RUF operate in a similar manner.
Dilettante
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Were there any indications or discussion regarding the % of donations that would be used for salary?

It's pretty clear the church plans to make money off this arrangement, which is fairly insulting.
discobrob
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I know a church that does this. Their explanation is that it's more of a residency and they have staff members and resources dedicated to developing the interns. You're paying living expenses as well as to fund your residency. If you have questions, why not ask the church? I'm sure they'll explain it.
Dilettante
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Could it be a tax thing?
craigernaught
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I did a 2 year unpaid ministry internship as part of a requirement to graduate from seminary.

A few months in, they decided to raise money to pay me $100 a month to cover travel and gas expenses as my job required quite a bit of driving. The Filipino members at the church also cooked me an incredible amount of food.

This arrangement sounds terrible.
Duncan Idaho
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A properly structured internship is one that is mutually beneficial for both parties EVEN when including the salary FOR the intern.

If you aren't having the intern performing tasks/taking on responsibilities at a level where they are able to add value to your organization, you aren't running an internship program. At best, you are running a school; at worst exploiting driven but vulnerable young adults.
Scotts Tot
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Dilettante said:

Were there any indications or discussion regarding the % of donations that would be used for salary?

It's pretty clear the church plans to make money off this arrangement, which is fairly insulting.

We haven't sat down with her to discuss. All I know right now is what she texted to us, putting out feelers for people who might sponsor her.

My understanding is that the church justifies their control over the funds to ensure the donations are tax deductible. The trade off is that I'm sure they have to keep some percentage to classify your donation as charitable giving for tax purposes. We have a couple of other friends whom she has approached and we all have a similar reaction: either the church should just pay her, or let her collect donations directly so that she doesn't lose a cut. I understand the argument that the church might have to allocate some resources to train her, but it feels like the church gets free work out of her, then picks up a share of donations intended to cover her living expenses. Win-win for the church.

My wife and I are just trying to figure out how to proceed. We wouldn't mind her supporting her, but the arrangement feels awkward, and I'm curious how typical this kind of thing is.
Dilettante
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Well the tax deduction piece seems fairly reasonable. Someone should ask explicitly whether the full donation is typically disbursed to the intern, and whether there are any legal reasons the church must keep some of it. You could also ask what % of donations have been given to past interns.
Zobel
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Seems like all these questions could be cleared up with a five minute conversation involving nobody on Texags.
Duncan Idaho
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Solid advice.

When confronted with a new financial agreement that raises internal flags, I too recommend that you don't seek a comprehensive range of advice from a community that is used to dealing similar organizations but instead only discuss it with the organization proposing the financial arrangement that you find uncomfortable
Zobel
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Everyone here is just speculating. The whole arrangement could be fantastic, it could be a nightmare.

If you can't get concerns cleared up don't donate. Or just give the money to the babysitter.
UTExan
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The church is a 501c3.

She is not.
It is better to light a flamethrower than to curse the darkness- Sir Terence Pratchett
“ III stooges si viveret et nos omnes ad quos etiam probabile est mittent custard pies”
swimmerbabe11
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UTExan said:

The church is a 501c3.

She is not.


probably this.

Also protects her from getting wierd questions about where she went for dinner and how she is using her funds. If it's a paid salary through the church, people don't question her use that much.
Scotts Tot
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Zobel said:

Seems like all these questions could be cleared up with a five minute conversation involving nobody on Texags.

No doubt. We will have that conversation. I didn't intend to have a drawn out discussion and waste anyone's time, but rather to gauge whether this kind of arrangement is typical, as I had never heard of anything like this.
GiveUsRoom94
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Weird and controlling
one MEEN Ag
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If the church is going to nefariously divert funds, this has to be the highest risk for lowest reward way of doing it. If this is truly a 'large' nondenominational church, they have a yearly budget of $10-15 million a year. We're getting caught up in the church potentially skimming a fraction of what? a few grand?. Start investigating for fraud when the church's missions budget becomes a paltry sum but the 3rd party marketing budget starts ballooning and going with a vendor that the pastor knows.

In general, I agree with the premise of the church needing to cover some overhead but it really can't be that much. If they aren't feeding and housing them, their incremental costs to the church are the ink and paper to create the program texts as well as the admin time and extra coffee costs.

This arrangement is also going to allow more equal distributions to all the interns in this program.
Win At Life
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swimmerbabe11 said:

UTExan said:

The church is a 501c3.

She is not.


probably this.

Also protects her from getting wierd questions about where she went for dinner and how she is using her funds. If it's a paid salary through the church, people don't question her use that much.


My understanding of 591(c)(3) law, is that "directed" giving such as what's described here where money is paid to the church with express direction that it all goes to a particular person, is illegal. Not that it would stop churches from doing this. But it's one of those illegal things that the IRS would have a hard time finding out about, and would probably only cause them to lose their charitable status.
BlackGoldAg2011
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Win At Life said:

swimmerbabe11 said:

UTExan said:

The church is a 501c3.

She is not.


probably this.

Also protects her from getting wierd questions about where she went for dinner and how she is using her funds. If it's a paid salary through the church, people don't question her use that much.


My understanding of 591(c)(3) law, is that "directed" giving such as what's described here where money is paid to the church with express direction that it all goes to a particular person, is illegal. Not that it would stop churches from doing this. But it's one of those illegal things that the IRS would have a hard time finding out about, and would probably only cause them to lose their charitable status.
this is the case. You can designate the tax deductible giving to certain programs at the 501c3 but you can't guarantee it to a certain person. I learned this when my wife and I were making our will and for the charitable giving portion we tried to designate specific missionaries we already support and the Lawyer told us that we couldn't for that reason. Our current donations apparently aren't legally designated to those individual families, but rather the missionary program with a "note" on who they will try to fund with it. With the will though, apparently if we designated specific people, it would lose the tax deductible status because at that point it is technically a payment directly to that person since the agency couldn't use that money elsewhere if those missionaries became over funded or left.
DirtDiver
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Ask questions to the people you would be supporting if you have concerns.

Our church has a program in which they must raise 2 years of support including full salary, taxes, insurance, etc. This salary is a predetermined, agreed upon amount by the intern to cover these costs.

The purpose of the internship is to prepare the person for full time ministry. Raising support allows one to build a prayer and support team that will carry over into future ministry or mission work in which raising support is often the norm.

The interns often complete the internship with college credits for coursework completed that carries over to seminary.

Always ask questions as not to be defrauded however don't always assume the worst. Many of my friends have completed this program many years ago and are employed by the church after completing seminary. Most people do participate in a program, go away, and then have a desire to come back if they are being taken advantage of.
Dilettante
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So it's just tax fraud right? Donating the money with the stipulation that it's for salary would be illegal, so they don't promise that explicitly, but that's what's happening. And that's being done to avoid taxes.
File5
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AG
That's what it sounds like...no bueno!!!
Towns03
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OP - This is totally normal. I support five different missionaries this way. Three work in Houston now, one in Costa Rica, and one in Thailand. Another dropped off last year - she was working on the Texas Tech campus.

This arrangement consolidates the donations through an organization that 1) has the resources to handle the payments and 2) can offer the tax deduction paperwork
diehard03
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I don't think the sticking point is that...its the language surrounding being able to do what they want with the money you've given for a specific purpose.

it also sounds like this is a grey area where that language is needed to ensure proper status.
DirtDiver
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People frown upon religious orgs for :
1. Tax Evasion
2. Using the tax system within the rules.



Dilettante
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I'm not a lawyer or an accountant but this definitely seems to violate the spirit of the law. No idea if it violates it as written.
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