Collecting Love Offerings in Church: A Complete Guide for Pastors and Congregations

Illustration of a pastor accepting love offerings

A love offering is the ideal way for congregants to show appreciation for their church. These donations are often given on birthdays, anniversaries and during the holiday seasons. Though rooted in the Bible, love offerings are subject to modern tax laws. Here’s what pastors and congregations must be aware of.  

 

Table of Contents  

  
 

What is a Love Offering and How Does It Differ from Tithes? 

Photo of a churchgoer giving a love offering

A love offering is a donation made to the church. It differs from a tithe in various ways. Here are some differences to consider.  

 

Love Offerings vs. Tithes: Understanding the Differences 

  • Donation Amounts: According to the Bible, church tithes should equal 10% of the donor’s income. Today, people rarely give this much, but 2021 statistics show they still account for a significant part of a church’s income equaling around $884 each year per church member. Love offerings do not follow a set amount.  
  • Voluntary vs. Involuntary: A love offering is a voluntary contribution. Church tithes are a Biblical commandment.  
  • Occasion Based: Tithes are collected each week during church service. Love offerings are typically given for special occasions like holidays, birthdays and anniversaries.  

Although tithes and love offerings are different, they have similarities. For example, although tithes are collected during church service, they can be donated at any time via cash, check or online giving. Love offerings can also be donated through various payment methods.  

Both donations are also subject to taxation.  

  

Biblical Foundations for Love Offerings  

The idea of love offerings was founded in the Bible. Sections that support love offerings include: 

  • Acts 20:35: It is more blessed to give than receive.  
  • 2 Corinthians 9:7 & 12: Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.  
  • Luke 6:38: Generous giving results in blessings for both the giver and the recipient.  
  • Malachi 3:10: God promises blessings to those who consistently entrust their resources to Him.  

  

 

Are Love Offerings Taxable? Understanding IRS Guidelines 

Photo of someone putting a heart in a box, representing a love offering

Love offerings may have been founded in the spirit of faith-based giving, but in modern times, Big Brother is watching. Here are some IRS guidelines to be aware of.  

  

Tax Implications for the Church and the Recipient 

Love offerings may or may not be taxable. Tax implications depend on how the gift is given and the gift amount. 

 

When Love Offerings Qualify as Taxable Income 

Love offerings qualify as taxable income if the church collects donations for an individual such as a pastor, visiting minister, volunteer, or staff member. If the donation is given to a church employee, it must be reported on the recipient's W2. If the recipient is not a church employee, and the donation is $600 or more, it may be reported on a 1099 form.  

However, if the love offering is made directly from a donor to the minister or church employee, it is considered a personal gift, and it is not taxable. An exception exists for gifs that exceed $18,000. For gifts of these amounts, charity recipients must file a gift tax return.  

Here are some other regulations that apply to consider a donation a gift: 

  • The donation cannot be for a service performed  
  • It must be spontaneous 
  • It cannot be solicited 
  • It cannot be a tax deduction for the donor 

Love offerings are not always tax deductible. However, tithing will be tax deductible if the church you give to is a tax-exempt charitable organization.  

  

Recordkeeping Requirements for Love Offerings 

Churches should record love offerings to ensure they are protected if an audit occurs. Here are some guidelines to keep in mind: 

  • Keep Detailed Records: Record all donations including the names of donors, the date donations were received, and the amount.  
  • Issue Receipts: Provide receipts for love offerings to maintain transparency.  
  • Keep Funds Separate: Use a designated account or a subaccount of the church bookkeeping system to track and report love offerings.  
  • Adhere to IRS Tax Regulations: Ensure your organization complies with IRS tax regulations by reporting income directly or through W2 and 1099 forms.  

This video can help you develop an organized system for church accounting: 

 

 

  

 

How Can Churches Collect Love Offerings Effectively and Transparently?  

A church must collect love offerings effectively and transparently. A transparent approach protects the church if an audit occurs. It also instills trust in the church.  

Here are some best practices to be aware of.  

  

Best Practices for Collecting Love Offerings 

  

  • Transparency: Communicate why the love offering is being requested, i.e., the occasion it commemorates, or the need it is supporting, to inspire trust in your faith community.  
  • Prayerful Consideration: Make church members aware that they are not obligated to donate. If they choose to donate, they should know that any donation amount is acceptable.  
  • Regular Updates: Update church members to let them know how their donation has made a difference in the recipient’s life. This will inspire a sense of satisfaction.  
  • Express Gratitude: Thank members who have donated. While an email is better than nothing, a personal note or mention during service will be even more rewarding.  
  • Financial Accountability: Ensure each donation is accounted for in your church accounting system.   

  

Ensuring Transparency in the Collection Process 

Financial accounting, updates, and clear communication will promote transparency in the collection process. You can further promote transparency by: 

  • Making Reports Available: Churches may consider publishing detailed monthly, quarterly or annual financial statements that are accessible to all church members.  
  • Work Collaboratively: Financial decisions and processes should be overseen by multiple benevolence committee members to ensure ethical practices.  
  • Conduct Audits: Conduct internal audits regularly to ensure financial accounting is accurate.  
  • Be Open to Questions and Concerns: Welcome church members' questions and concerns by creating a system such as email or feedback envelopes. Respond to questions and concerns promptly.  

  

Communicating the Purpose of Love Offerings to the Congregation 

Support transparency by ensuring your congregation members understand the purpose of love offerings. They may be used in the following applications: 

  • Meeting Special Needs: Love offerings may be made to support a church member or employee facing a financial emergency caused by a loss in the family, unemployment or a natural disaster.  
  • Celebrating Milestones: A love offering can celebrate milestones such as a birthday or anniversary. Donations are also common at holiday-time.  
  • Supporting the Ministry: Love offerings can be an additional way to provide ministry support beyond tithes. They may benefit community outreach programs, missions, and special projects.  

  

 

What Does the Bible Say About Love Offerings? 

Several Biblical examples and passages refer to love offerings. Here are some to study:  

  

Biblical Examples of Love Offerings 

One example of a love gift occurred in Jesus’s story of the widow. Jesus called his disciples to watch a poor widow give copper coins to God which he said was more meaningful than the rich who donated bags of gold.  

Luke 2:24 also references love offerings. In this passage, followers donated a pair of turtledoves or two young pigeons as tangible expressions of obedience and their love of God.  

  

Scriptural Guidance on Giving and Generosity 

The key points on scriptural giving and generosity are as follows: 

  • Cheerful Giving: God values people who give with a spirit of joy and willingness, not a begrudging attitude.  
  • Proportionate Giving: Giving should be based on what you can afford, it shouldn’t be a burden.  
  • Sacrificial Giving: Some spiritual giving may require a sacrifice.  
  • Giving to the Needy: The Bible emphasizes giving to those in need.  

  

 

How Should Churches Handle Love Offerings for Pastors and Staff? 

Love offerings for pastors and staff must be handled ethically Here are some tips to keep in mind.  

  

Guidelines for Pastor Appreciation Love Offerings 

Pastors are often underworked and overpaid. Church members who are aware of the financial hardships pastors often face may contribute to them in the form of love offerings. However, there are certain guidelines to be aware of concerning how these donations are given and reported.  

If a church member gives a love offering directly to the pastor, it is considered a gift, and it does not need to be reported. However, if the church collects money on the pastor’s behalf, and donations are made directly to the church, they must be reported as part of the pastor’s income on their W2 form. Failure to report this income can lead to a hefty fine.  

  

Reporting Love Offerings for Church Employees 

Love offerings for church employees must be handled similarly. Any money given to the employee directly is nontaxable. However, any money collected by the church on behalf of the employee is taxable and must be reported on that employee’s W2.  

If the individual is not an employee but someone who works with the church on a freelance basis, and the donation is $600 or more, it must be reported on a 1099 form.  

  

Navigating the Line Between Gifts and Compensation 

Churches must also be aware of the difference between gifts and compensation. Gifts are given of the donor’s free will to show their appreciation. They should not be given as compensation for services performed.  

Money paid for services performed is not a gift and must be reported for tax purposes.  

An interesting case comes up in which a pastor started a church. Rather than take a salary, he let pastors know he would be offering blue envelopes that members could use to make him a love offering.  

When the IRS discovered the situation, they determined these ‘gifts’ were taxable income because:  

  • The donations were provided in return for services rendered 
  • The pastor solicited the payments 
  • The money was given as part of a structured program making it more of a suggested donation than a donation given of someone’s free will 
  • The donations far exceeded the pastor’s salary 

  

 

Can Love Offerings Be Tax Deductible for Donors?  

One of the many advantages of donating to a charitable cause is a tax deduction. The donated money is subtracted from the donor’s taxable income, so they pay less in taxes. So, are love offerings tax deductible?  

  

Conditions for Tax Deductible Love Offerings 

In most instances, love offerings are not tax deductible because they are gifts given to an individual. However, some exceptions apply as follows: 

  • The church requests contributions such as a special collection for an employee 
  • The love offering exceeds $18,000 per year 

  

Documentation Needed for Tax Purposes 

To claim a tax deduction, you will need to provide:  

  • A written statement from the charity: The charity should provide you with a written statement with the charity’s name, the date and amount of donation or a description of the donation if the property was given 
  • Additional Tax Forms: If you give a property gift worth over $500, you will need to include Form 8283 in your tax return 
  • Appraisal: If you donate larger gifts worth over $5000, you may need to include a qualified appraisal with your tax return 

  

 

How Churches Can Get Started with Implementing Love Offerings 

Churches can begin implementing love offerings by taking the following steps: 

  

Creating a Love Offering Policy 

  1. Get Board Approval: Before setting up your love offering program, you must get board approval. Your board of directors should be the final decision-makers on whether your church can benefit from love offerings. In most instances, they should be excited by the idea, but approval is necessary. Once they approve, consult with them to ensure the policy aligns with church ethics.  
  2. Ensure You are Aware of Tax Implications: Do some research to ensure your love offerings meet IRS regulations. An accountant will ensure you comply with current rules.  
  3. Set Up an Accounting System: Set up your accounting system to accept love offerings. They should be categorized separately from other donations. You may need to set up a different system for love offerings.  
  4. Determine How to Collect: If you collect love offerings through your church, you must determine effective collection methods. Here are some to consider. 
  5. Text to Give: Text to Give sends donation requests directly to church members’ cell phones for increased engagement. According to Funraise, Text to Give yields 99% open rates. It also provides a link so religious donors can give directly through their phones.  
  6. Create an Online Campaign: A DonorBox report shows that 60% of churchgoers are willing to give digitally.  Make it easy for them by setting up an easy-to-use donation page on your church website. Advertise the page through emails and social media campaigns.  
  7. Peer-to-Peer Giving: Peer-to-peer giving involves church members raising money on the church’s behalf. They may set up pages and host events to collect money from friends and relatives. A WP Experts report shows peer-to-peer fundraising has a 71% success rate as compared to 22% for direct gift appeals.  

Watch this video for useful marketing tips that support cheerful giving: 

  

 

 

Educating the Congregation on Love Offerings 

Churches must educate their congregation on love offerings to ensure a transparent approach. They must explain why they are raising money and make church members aware that they are not obligated to give. They should not suggest a charitable donation amount.  

They should keep the congregation apprised of love offerings by letting them know how their donations helped, offering copies of financial reporting, and addressing relevant questions and concerns.  

  

Incorporating Love Offerings into Church Financial Planning 

Churches should incorporate love offerings into church financial planning by categorizing love offerings separately in accounting systems. They must be prepared to report love offerings at tax time. Churches should collaborate with their accountants, payroll department, and church board to ensure everything is done by the book.  

  

 

Additional Stewardship FAQs 

 

How Much is a Love Offering? 

A love offering can be any amount. Unlike a tithe, there is no recommendation to give 10% of your income. Donors can determine an amount that shows their appreciation and works with their budget.  

 

What is a Love Offering to a Pastor? 

A love offering to a pastor is a religious donation a donor gives to show they appreciate the pastor’s guidance and hard work. Church members can donate to the pastor directly or through a church fund.  

 

Can Pastors Receive Love Offerings? 

Yes, pastors can receive love offerings from church members or the church. If the love offering is from the church, it must be reflected in the pastor’s W2 form. Pastors cannot solicit love offerings in return for services rendered.  

  

  

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