LOCAL BENEVOLENT FUND (LBF)
Purpose of the LBF:
Assisting local individuals in financial need is the purpose of the Local Benevolent Fund and thus it fulfills the church’s mission of having a local compassionate ministry. By establishing a Local Benevolent Fund, New Life Church recognizes that assisting persons in financial need is a continuing mission of the church. Examples of beneficiaries are refugees, homeless, single mothers, physically or mentally ill, elderly.
The LBF shall mainly help individuals with financial aid and differs from the existing Local Compassionate Fund (budgeted by church funds) that focuses mainly on larger initiatives and typically supports a wider group of people instead of one person.
Policies of the LBF:
The Local Benevolent Fund is established as an ongoing fund. Should at any time the church board vote to close this fund, all money in the fund at that time shall go in the general budget of the church.
Recipients of financial aid from the Local Benevolent Fund are not obligated to provide any form of compensation, including work, in return for the assistance received. The aid is provided as an unconditional gift to support individuals in need and is given out of charity and goodwill.
Three active church members - 18 years or older - are called to serve together with the lead pastor as voting, accountable committee members. The lead pastor shall recommend candidates to the church board who needs to approve the pastor’s recommendations. Their role is to evaluate funding requests, prayerfully discern whether to disburse financial aids or not and to what amount financial aid is given. The administration of the fund, including all disbursements, is subject to the exclusive control and discretion of the benevolence committee, with the exception of allowing the pastor to use funds of up to $500 in emergencies without prior permission by the committee.
The benevolence committee may consider recommendations from anyone, but the committee shall not be bound in any way to honor the recommendations. Donors shall not be permitted to recover a contribution because the committee failed to honor the donor’s recommendation. The committee shall determine the maximum amount of aid given to one person and establish the criteria which would qualify a person for financial aid. Committee members shall not receive any financial aid. In case one of their family members is being considered for financial assistance, that individual shall recuse from having a say in the decision making.
Also, the benevolence committee should record the required IRS documentation for benevolence requests. The following documentation for benevolence requests should be recorded for accurate record keeping:
1. A complete description of the assistance.
2. The purpose for which the aid was given.
3. The church or benevolence committee’s criteria for disbursing assistance under this benevolence fund, for instance proof of hardship, cap on gift, guidelines for long-term need.
4. How the recipients were selected.
5. The name, address, and amount distributed to each recipient.
6. Any relationship between a recipient and officers, directors, or key employees or substantial contributors to New Life Church.
The benevolence committee shall report to the Church Board on a quarterly basis the balance of the LBF and give a summary of how funds were used. The current Office Manager / Accountant for New Life Church - shall produce reports for the committee with an overview of all donations and expenses of the fund.
Criteria and Best Practices
Recipients of financial aid shall apply via our online application form on https://nlnc.org/benevolence-request-form
Following an initial screening of submitted applications, the committee reserves the right to request additional information, such as proof of identity and evidence of financial hardship. This ensures thorough due diligence in verifying applicants' circumstances and helps us maintain accurate records of documentation that may be required by the IRS. All committee members are required to provide written consent to keep applicants' data strictly confidential.
Best Practices (Implemented to Prevent Fraud and Ensure Responsible Fund Management)
Background Checks: In cases of suspicious applications, background checks may be conducted to verify the validity of applicants' claims. For example, the lead pastor may contact other institutions, such as churches or NGOs, to confirm whether an applicant's presentation of their hardship is genuine or fraudulent.
Four-Eye Policy: To uphold due diligence, a “four-eye” policy will be applied. This involves two committee members jointly verifying proof of identity and evidence of financial hardship during a personal meeting with applicants. For instance, applicants may be asked to provide copies of medical bills or similar documentation.
Spending Limits: Financial aid disbursements shall be limited to one-third (⅓) of the total available funds per individual. Exceptions may be granted in emergencies or when there are compelling reasons to exceed this limit.
Lifetime Cap: The maximum financial aid provided to an individual over their lifetime shall be capped at $10,000. Exceptions may be made when disbursing a higher amount can prevent significant adverse outcomes, such as funding critical medical treatments needed to save a life.