Many team leaders wonder if team members can get a receipt for short term mission trips. They specifically want to know if they can be receipted for funds that they personally provide for their own usage for an STM trip?
What are Canada Revenue Agency (CRA) regulations?
Yes, it is possible to get a receipt for short term mission trips, if team members meet some policy requirements … it can’t be a vacation pretending to be a mission trip. Read on for some Short Term Mission/Canada Revenue Agency Donation Policy.
Q: Can a private individual be receipted for funds that they provide for their own usage on a STM trip? What are Canada Revenue Agency (CRA) regulations?
A: People may donate towards a team and receive a receipt for short term mission trips as a member of the STM team if they meet the criteria:
- Establish the total cost to complete the project. The full budget should include transport, accommodation, meals, training, leader costs, normal days off, and project costs. The budget should not include vacation days and all team funds must be clearly defined and accounted for.
- Officially recognize the trip as a ministry objective/function of the church. This decision of the Board, in and of itself, does not make it a bona fide ministry of the local church. The church must, in fact, have “care, direction and control” over the activity or project. This should be passed as an official motion at the board level
- Official Leader C Team and ministry costs remain under the care and control of an officially designated leader from the church. A separate official board minute is helpful to designate an approved leader.
- Excess funds have a clearly defined purpose. If funds are raised over the target goal, or remain at the end of a trip, they are applied to the projects for which they are designated, e.g. Missions – General fund. Have this account clearly identified on the donor form.
Q: What financial expectations can we have for individual members of the team?
A: Although funds cannot be specifically directed to the participants on the trip. Team members should be required to participate in raising funds for the trip. All funds are raised for the entire team cost. Anyone may donate to the bona fide missions trip and receive a tax receipt, including a donor who might also be a participant of that trip. (For this reason, a team members name should not appear on the subject line of a cheque.)
Team members may be asked to commit to a personal fund-raising goal, which at a minimum, will usually cover their individual costs. (Many teams maintain a record of funds raised through the efforts of individual team members in order to allow the team member to personalize their thanks and appreciation to the donor.)
Key elements are that the donor gives to a program as opposed to giving to an individual.
Q: Can a Team member be given a receipt for short term mission trips for a personal donation?
A: Teams may wish to use two separate forms for a team member to bring in funds: a donor form and a deposit form. If a team member uses a donor form to submit money for a team expense, this is tracked as a full donation and the appropriate receipt is given.
Alternatively, a team member may use a deposit form to cover an immediate portion of an immediate team expense before receiving a receipt for short term mission trips
For example … an airline ticket must be paid this weekend, but aunt Mabel has promised a large donation for next month, then the team member can submit monies along with a deposit form. IF aunt Mabel’s money comes in next month, the team member CAN REQUEST a return of his or her deposit. If Aunt Mabel does not follow through on the promised donation, the deposit is entered as a normal donation.
Q: What happens if a team member withdraws or is forced to withdraw from a team?
A: All funds raised and directed to the STM team are used for team expenses EVEN if the team member who raised the funds chooses to withdraw or is forced to withdraw from the team.
Clear policy determining criteria to remove a team member should be explained during the application process and may include: failure to maintain moral issues, lack of commitment to training events or leadership, or failure to raise the expected portion of team funds.
Q: What happens if a team member raised more funds than their personal goal?
A: Participants who raise monies in excess of their personal fundraising goal should be made aware that those excess funds are used at the discretion of the team leadership. The individual team member may not direct or personally receive any excess funds for a receipt for short term mission trips.
This includes NO ‘reimbursement’ of funds for spending money.
Additional and unused funds raised over and above team expenses cannot be returned or reimbursed to individual team members. At the time of fundraising, a clearly defined plan for excess funds should be revealed. (i.e. Excess funds are distributed to the general missions fund of our Church.)
Q: What about paying for holidays or days off?
A: Team funds are not used for holidays. Team funds MAY be used for on-field officially sanctioned days off, culturally relevant experiences and debriefing days if they serve the goals of the team.
Rest and recovery at a beach or game-lodge may be a reasonable objective of the team.
It is helpful if the church develops a policy for on field debriefing or training days and the team leader obtains board approval for the debriefing days.
EXAMPLE POLICY: For every week on the field, the team accrues 1.5 days of debriefing days to be used at the end of the team trip. The team will gather for reflection and recovery purposes during the debriefing days. The team may spend up to #$ per person, per day of debriefing. These funds generally cover accommodations, meals, and travel. Additional costs for any leisure related activities are the sole responsibility of team members and will not be receipted.
Q: Does our international partner need a Canadian charitable number for us to partner with them for a STM team?
A: It depends on what you want to do with them in the future.
It is BEST to work with an agency with a Canadian charitable tax number as this ensures better CRA compliance over issues of Canadian care and control. It is not entirely necessary if the team ministry and trip are within the care and control of an officially recognized team leader who is officially responsible to the board of the sending organization (the above criteria).
If, on the other hand, an individual is inspired by your STM trip and wants to go back to volunteer for an extended time…
then your church must work with an agency that has a Canadian charitable number.
This is an important point to keep in mind when choosing international partners. Many individuals are inspired by a team-based Short-Term Mission (Short-Termers) and subsequently plan to individually volunteer to go back for an extended time to the international ministry (we refer to them as a Mid-Term Missionary or MTM).
Where this gets difficult is when the international partner does not have a Canadian charitable number.
Although a Short-Term team is under the care and control of an officially recognized ministry of the church, a church cannot simply second the Mid-Termer to the international partner without stepping offside from CRA rules regarding the clear CARE and CONTROL of the Mid-Termer.
NOTE: THIS IS NOT LEGAL ADVICE. This is informed advice that attempts to provide clarity from a variety of ongoing conversations with people who are carefully attempting to follow CRA regulations when it comes to receipt for short term mission trips.
Of course these tax issues do not matter if people are neither looking for a way to either give or receive a charitable tax receipt.