Can We Route Donations Through the Church for a Tax Deduction?
It feels like a reasonable request. The church is a 501(c)(3), the donor wants to give generously, so why not make it work? Here is why the IRS sees it differently, and what to do instead.
Every so often, a church member comes to leadership with a project they want to fund. It may be a missionary they know personally, a neighbor in a financial crisis, or a ministry effort the church has not formally sponsored. The ask usually sounds something like this: "Can we route the donations through the church so people can get a tax deduction?"
It feels like a reasonable request. The church is a 501(c)(3). The donor wants to give generously. Why not make it work?
Here is the problem.
The IRS Does Not Allow It
When a donor directs funds through a church to a specific individual, the IRS does not treat that as a charitable contribution. It treats it as a personal gift. The church is just the middleman.
IRS Revenue Ruling 62-113 addresses this directly. A contribution is only deductible when the recipient organization has full control and discretion over how the funds are used. The moment a donor earmarks funds for a specific person, the church loses that discretion. The gift is effectively made to the individual, not the organization.
IRS Publication 526 reinforces this. Contributions made "for the use of" a specific individual rather than the organization are not deductible as charitable contributions.
So the tax benefit the donor was hoping for does not actually exist. In most cases, once I explain this, the whole idea falls apart.
What Usually Happens
The conversation typically ends with a simple conclusion: if the IRS is going to treat this as a personal gift to the recipient anyway, there is no reason to involve the church at all. The donor can give directly to the individual.
The church does not gain anything by being in the middle of that transaction. And bringing the church in creates unnecessary bookkeeping, liability questions, and the appearance of endorsing something the church has never formally approved.
The One Exception Worth Noting
There is a narrow case where a passthrough arrangement might make sense: anonymous giving.
If a donor wants to give to someone in the congregation but does not want the recipient to know who gave, the church can serve as a buffer. That is a legitimate pastoral function. But there are two things leadership needs to get right.
First, the church must genuinely exercise discretion over the funds. Leadership needs to approve the gift, own the decision, and not simply rubber-stamp whatever the donor requested. The church cannot be a mere conduit with no real authority.
Second, that gift cannot appear as a tax-deductible contribution on the donor's year-end giving statement. If the arrangement does not qualify as a deductible gift under IRS rules, it cannot be receipted as one. Doing so would be inaccurate and could expose the church to scrutiny.
The Bottom Line
Protect your church from arrangements it was never designed to handle. If someone wants to support an individual and get a tax deduction, the right path is to look for a recognized 501(c)(3) that is already doing that work and give through them directly. That is a cleaner outcome for everyone.
Further reading: IRS Publication 526, Charitable Contributions
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