Staff Members’ Meeting on the Church’s Nickel

I received the following question: “Our church budgets $100 per month for meals for ministers. Is it allowable for our pastor and worship director go out to lunch each week for a planning session and have the church pay for both meals every week?”

My reply:
There are two components to this question

  1. Legal
    1. The IRS does not permit an excessive benefit to the staff in a non-profit. A lunch every week is not an excessive benefit if the meal is typical $8-$15 meal.
    2. The IRS does encourage an accountable reimbursement plan. That means that for every expense, there must be a receipt and documentation about who was there and how it related to the church. It can be as simple as “Prospective member lunch with the Smiths” – there is NO need to write a paragraph. If you don’t have the proper receipts, then reimbursements might be considered income for IRS purposes. Documentation is not only good but absolutely necessary.
  2. Church Policy
    1. The church SHOULD care if staff are good stewards or not. My professional opinion is that staff members work alongside each other all day and can meet with each other at any point during the work day and work week. If they want to go out to lunch, then that is NOT a professional expense because they could have had that meeting any other time during that day.

To me this is not a financial matter, it is a personnel matter. I suggest that the personnel manual (and finance manual if you have one) make a statement that “meetings between staff members which have expenses (meal, coffee, etc.) are not reimbursable expenses because staff could have met at the church without incurring an expense” or words to that effect.

I do not know the relationship you have with the pastor

  1. If your relationship is strong and he isn’t threatened, then you can approach him and help him understand that if all staff were to do this it would cost the church tens of thousands a year which could be used for other things.
  2. If the pastor might be threatened by you and this subject, then you have to be willing to leave. You can either approach the pastor with this matter OR you can talk with the personnel and/or financechairleader and ask him/her to address this and to keep your name confidential. If the personnel or finance committeechairleader doesn’t think it is a problem, then drop it. That just means you have higher standards than they do.What they are doing is not illegal or immoral but it does stray into the ethical gray area for churches. And one of my sayings is, “Stay Out of the Gray!”

Lead On!