Short term mission trips, especially in third world countries, bear a financial responsibility to ensure that funds are used for benevolent purposes and don’t fall into the hands of any organization with terrorist ties. To maintain financial integrity and align with the Patriot Act of 2001, follow these 5 rules:
- You must be able to prove that the people to whom you give money in foreign countries are not connected with any terrorist organization.
- You must perform due diligence by learning about terrorist activities in the destination country, and check the listings of known or suspected terrorists with the S. Department of State and the U. S. Department of the Treasury.
- Trip leaders must obtain receipts for expenses in-country to prove financial integrity. In addition, he or she must keep records of expenses that include date, amount, name of person who received the money, and the reason for the expense.
- In-country receivers of charitable donations must sign a receipt stating that the funds were received based on benevolent need.
- If a trip leader can’t properly account for money spent on the trip, then that money is not considered used for tax-exempt purposes. The church may require that amount to be given back to the church or reported as compensation to the trip leader.
The tasks to prepare and document a short term mission trip are numerous, but worth it. Please talk with a Salmon Sims Thomas tax advisor about any church compliance issues or questions.