Expert: Harvey Mechanic - 1/27/2009

Question
what are the laws on a church giving benevolence to members, Example: are there restrictions that it can only be for utilities and not the deposit for utilities

Answer
There are no such regulations by the IRS that would preclude certain aid. Many churches have what they call a Church Compassion Fund or
Church Benevolence Fund or something similar.  Those purposes are
allowed by the IRS as long as the regular church activities remain
as the main activities of the organization and the grants to
individuals are based not at all on any prohibited reasons, such as
work for the church or membership in the church or worse,
relationship with church insiders. Further, the congregation size
must be similar to the size of the community, if the grants are
mostly going to people in the congregation.
www.irs.gov/pub/irs-pdf/p3833.pdf starting on page 5 (which is pdf
page 7 of that pdf file) "Charitable Class
--start of excerpt  ---
The group of individuals that may properly receive
assistance from a charitable organization is called a charitable
class. A charitable class must be large or indefinite enough that
providing aid to members of the class benefits the community as a
whole.
--end of excerpt  ---

Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com