Allahabad Bible Seminary

Prayagraj

Course Code: BMM02

Subject: Church Organization and Pastoral Administration

Topic:
a. Rules and Regulations of the Church in Money and Property Management
b. Tax Law

Faculty In-Charge : Samuel George Makasare

Submitted by : Kaino Chishi
Date : 18th July 2020
Class : BD III Year English, 2020-21
Methodology : 9th Turabian Bibliography Method

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 Introduction
Management indicates a need to be cared for, monitored and accountability given for its useful
life and condition. The financial matters of a congregation are often perceived as more
complicated than they really are. Managing church money, property and tax are one of the most
important and vast works of financial stewardship. So, in this paper, we will try to have a bird-
eye view on management of church money, property and tax.
1. Property
Property is a term describing anything that a person or a business has legal title over, affording
owners certain enforceable rights over said items. Most properties hold current or potential
monetary value and are therefore considered to be assets. But properties can simultaneously be
liabilities in some situations.1
There are two types of Property:
 Tangible: Tangible personal property is a tax term describing personal property that can
be physically relocated, such as furniture, office equipment, machinery, smart phones,
computers, collectibles, etc.
 Intangible: Intangible properties, like design concepts, song lyrics, books, and
screenplays, are categorized as intellectual properties. Even though these entities are not
physical in nature, they may nevertheless carry significant value.2
2. Indian Constitution on Religious Property
Article 26, 1949 in Indian Constitution states:-
“Subject to public order, morality and health, every religious denomination or any section thereof
shall have the right-
 To establish and maintain institutions for religious and charitable purposes;
 To manage its own affairs in matters of religion;
 To own and acquire movable and immovable property; and
 To administer such property in accordance with law.”
This article gave every religious denominations and sections the freedom over their affairs,
institutions and property. 3

3. Church Property
1 Assets are defined as resources that help generate profit in a business. Liability is defined as obligations that
a business needs to fulfill. In simple words, Liability means credit.
2 Andrew Bloomenthal, “Property,” Investopedia, February 27, 2020, accessed July 13th 2020, https:// www.
investopedia.com/terms/p/property.asp.
3 “Article 26,” Constitution of India, last modified 2020, accessed 13th 2020, https://www. constitution of
india .net/constitution_of_india/fundamental_rights/articles/Article%2026.

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 Only registered Church that is a legal entity can hold property. The property moveable and
immovable property, belonging to a registered shall vest in the committee (Executive Body) and
any such property may in any legal proceeding be referred to as the property of the committee.4
Church property must be carefully and realistically planned for and acquired to fit the
mission of the church. Planning should include long-range goals for expansion or other major
capital needs, as well as general operating needs in the current year. Financial support for
property needs must be carefully considered and made an integral part of the overall plan.5
Once acquired, church property must be properly maintained. The appearance of a church
provides newcomers with their first impression, and it conveys how the church feels about itself
and others. Maintenance schedules need to be established and responsibilities for maintenance
must be clear. Without this organized approach, people do not know who is responsible for what.
Also important is an effective insurance program which protects the members and their
investment with adequate but realistic coverage, based on an assessment of risk. The role of the
pastor in property management will often be as an overall manager and leader, with details
handles by the property committee, trustees, custodial staff, or other volunteers.6
Some other Management of church property:
 Routine Maintenance and Repairs: Church property requires routine maintenance to
obtain the maximum useful life from each component and to prevent breakdown or
failure. The responsible person schedules these tasks and sees that broken or worn-oft
parts are repaired or replaced promptly.7
 Cleaning Schedule: Members like to attend a church that is neat, clean and orderly..
Create a schedule that has cleaning times that coincide with the church calendar.8
 Safety Training: Whether it is church employees or volunteers helping with maintenance
tasks, safety training is important. Training on simple things like proper use of cleaning
chemicals, ladders or power-equipment is essential to ensuring a safe event – that is ree
from injuries.9
 Musical Instruments: Musical instruments are purposely placed in specific locations to
encourage maximum use. The facilities management group schedules the tuning and
maintenance of musical instruments. Musical instruments should be secured when not in
use.10
4 Paul Samuel, “Property Management by Christian Organizations,” in Management of Christian Services in
India, ed. Ebe Sunder Raj et.al (Chennai: Christian Institution of Management, 2004), 287.
5 Otto F. Crumroy Jr, Church Administration and Finance Manual: Resources for Leading the Local Church
(Atlanta: Church Publishing, 1998), 3.
6 Ibid.
7 Facilities Management Guidelines for Meetinghouse and Other Church Property (Utah: The Church of
Jesus Christ of Latter-day Saints, 2011), 5.
8 Patricia, “Managing Church Facilities”, October 19, 2016, accessed 13 th July 2020. https://smartchurch
management.com/church facilities management/
9 Patricia, “Managing Church Facilities”, October 19, 2016, accessed 13 th July 2020. https://smartchurch
management.com/church facilities management/

10 Facilities Management Guidelines for Meetinghouse and Other Church Property, 3.

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  Preventing from Arson and crime in Churches and Church's property: Arson is the
leading cause of fire in churches and related properties.. Churches are particularly
vulnerable to arson or other criminal activity when they a) are located in isolated or rural
areas, or in recognized “high criminal risk” inner-city areas. b) are left unattended for
extended periods of time. c) have unsecured doors or windows, inviting, forced entry by
intruders. d) do not have adequate burglar alarm systems, thereby giving criminals extra
time to perform criminal activity. e) have heavy shrubs and outside vegetation or
insufficient perimeter lighting, which helps to screen criminal activity. 11
4. Money Management
Money management is the process of budgeting, saying, investing, spending or otherwise
overseeing the capital usage of an individual or group. Money management can also be referred
to more narrowly as “investment management and "portfolio management.12
4.1 Internal Controls
Church should have adequate procedures for handling financial receipts (both checks and cash)
and disbursements (payments). Such procedure known to accountants as “internal controls.”
Good internal controls make it less likely that money contributed to the church will be stolen or
misused. “Internal control is a plan of control, not only to detect error or fraud, but to safeguard
assets; to check the accuracy and dependability of records and reports; to encourage operating
efficiency and adherence to the rules, regulations and policies set by management.13
4.1.1 Cash Receipts
 Count and check loose and enveloper offerings. This should be done at the church after
the Sunday services.
 Deposit the proceeds in the bank, preferably the same day
 Record the envelope offerings so the contributors receive proper credit.
 Pre-numbered receipts should be issued to individuals who bring money to the office for
fees/donations, etc. Receipt should contain the date, name, amount and purpose of funds
and be signed by the employee/volunteer who received the funds.
 Receipts should be accounted for in numeric order.
 Deposits for various tithing and offerings should be identified by source of income.14
4.1.2 Some others rules and regulation for money management
 Assign someone other than those who handle cash or keep the financial records the
responsibility for receiving and reconciling the bank statement.
11 The Financial Handbook for Congregation (Canada: United church of Canada, 2017) 109-111.
12 James Chin, “Money Management,” Investopedia, February 27, 2020, accessed July 13th 2020,
https://www.investopedia.com/terms/m/moneymanagement.asp.
13 A Church Finance Handbook for Church Treasures & Finance Committees (Framingham, Massachusetts
Conference, 2010), 116-121.

14 The Financial Handbook for Congregation, 93.94.

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  Use a church budget effectively (Particular budget for particular expenses).
 Keep notes, valuable personal property, cash (coins, bills, or checks) in a safe place.
 Maintain an inventory of assets. e) Make sure an annual audit is conducted.
 Put all of cash handling procedures in writing.15
5. Protecting Investments
The management of investments is another area in which good control procedures are crucial.
Unfortunately, a number of churches have lost money due to the dishonesty of trusted church
officers who claimed to be investing money that was actually being diverted for personal use.
Others have lost money because one or two individuals, while trying to act in the best interests of
the church, have made unwise investment choices. There are some degree of risk involves in
investment; no protocol can fully safeguard. However, good procedures can reduce the risk that
the church will suffer from the results of dishonesty or poor judgment on the part of a key officer.
So, each church should adopt a written gift acceptance and investment policy; approved by its
governing body.16
6. Tax Law
Tax law is a government document, numbering thousands of pages that detail the rules for
individuals and businesses. Usually, the tax laws will be implemented through respective acts,
rules & regulations, procedures, circulars, and orders. They must follow the law and be
responsible for remitting a percentage of their income to the government.17
6.1 Applicability

At the outset it may be made clear that the income tax Act does apply to organizations whose
activities are merely charitable or religious in nature. It may be further made clear that under the
Income tax Act taxes could be levied even on donations, offerings and such collections, though
these voluntary contributions are not in the nature of income as are normally understood. This is
so because, while the charging section of the income tax Act- Section 4, lays down that income tax
shall be charged in respect of the total income of every person.18

6.2 Exemptions of Taxes

15 A Church Finance Handbook for Church Treasures & Finance Committees 116-121.
16 Ibid, 122-123.
17 Anjaneyulu, “Tax Laws,” Clear Tax, July 07 2020, accessed July 13th 2020, https://cleartax.in/g/terms/tax-
laws
18 Lengmi Lungleng, Church Administration: Comprehensive Guide (Mokokchung: Tribal Development and
Communication Centre, 2017), 148.

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 Income Tax Act lays down the various circumstances under which the incomes of
charitable/religious Organizations are exempted from the levy of tax. In the past years, exemptions
were unconditional, i.e. absolute, but now some of the exemptions are subject to approval oy the
prescribed authority. Finance (No 2) Act, 1998 and Finance Act, 2002 have drastically changed
the exempted organizations.19

6.2.1 Organizations enjoying absolute exemptions

Under section 10 (23c) of the income tax, income of the 101 organizations is exempt from
levy of tax:
 Educational Institutions: Any university or other educational institutions existing
solely for educational purpose and and not for purposes of profit and which is wholly
or substantially financed by the Government. Any university or other educational
institutions existing solely for educational purposes and not for purposes of profit and
if the aggregate annual receipts of such educational institution does not exceed Rs. 1
crore.
 Hospitals: Any hospital of other institution for the reception and treatment of persons;
suffering from illness or mental defectiveness; during convalescence; requiring
medical attention or rehabilitation; existing solely for philanthropic purposes and not
for the purpose of profit and which is wholly or substantially financed by the
government Any hospital or other institution for the reception and treatment of
persons; suffering from illness or mental defectiveness; during convalescence;
requiring medical attention or rehabilitation; existing solely for philanthropic purposes
and not for the purpose of profit and if the aggregate annual receipts of such
hospital/organization does not exceed Rs. 1 crore.20

Conclusion
The pastor’s role in church-property decisions can be a delicate one. Pastors should challenge
their congregations to new heights of stewardship and development, but they must also ensure
that decisions are kept in realistic perspective. To control money, there should be internal control.
By following some rule and regulation of cash receipt and disbursement, it helps to control
misusing the money. To control investment, there should be detail information of it. Having good
relationship with volunteers helps to stop bribery and misuse of money. So church should
understand that each and every person of church are equally important.

19 Lungleng, Church Administration: Comprehensive Guide, 149.

20 Ibid.

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 Bibliography

A Church Finance Handbook for Church Treasures & Finance Committees. Framingham,
Massachusetts Conference, 2010.

Crumroy Jr, Otto F. Church Administration and Finance Manual: Resources for Leading the
Local Church. Atlanta: Church Publishing, 1998.

Facilities Management Guidelines for Meetinghouse and Other Church Property. Utah: The
Church of Jesus Christ of Latter-day Saints, 2011.

Lungleng, Lengmi. Church Administration: Comprehensive Guide. Mokokchung: Tribal

Development and Communication Centre, 2017.

Samuel, Paul. “Property Management by Christian Organizations,” in Management of Christian

Services in India, edited by Ebe Sunder Raj, Jayakumar and Varhese Jacob. Chennai:
Christian Institution of Management, 2004.

The Financial Handbook for Congregation. Canada: United church of Canada, 2017.

Websites

“Article 26.” Constitution of India. Accessed 13th 2020. https://www.constitutionofindia

.net/constitution_of_india/fundamental_rights/articles/Article%2026.

Anjaneyulu, “Tax Laws.” Clear Tax, July 07 2020. Accessed July 13th 2020,
https://cleartax.in/g/terms/tax-laws

Bloomenthal, Andrew. “Property.” Investopedia, February 27, 2020. Accessed July 13 th 2020.
https:// www. investopedia.com/terms/p/property.asp.

Chin, James. “Money Management.” Investopedia, February 27, 2020. Accessed July 13th 2020,
https://www.investopedia.com/terms/m/moneymanagement.asp.

Patricia. “Managing Church Facilities.” October 19, 2016. Accessed 13th July 2020.
https://smartchurch management.com/church facilities management/

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