Episcopal Diocese of Southeast FloridaMural

Discretionary Funds

Clergy Discretionary Funds

Clergy discretionary funds are always funds which belong to the church. They are not personal funds of any member of the clergy.

  • Receipts and disbursements from these funds must be recorded on the books and records of the church, and, if they are maintained in a separate checking account, the balance in the account must appear on the balance sheet of the church.
  • They must be audited in conjunction with the annual audit of the church. Any separate bank account must be approved by the Vestry and opened in the name of the church and not in the individual name of the member of the clergy.
  • The church tax identification number must be used when opening the account.
  • Personal funds of the clergy person must never be commingled with the funds in the discretionary account.
  • The discretionary fund of a departing clergy person must be turned over to the appropriate person in the church and must be audited immediately.
  • The source of receipts deposited to the account may be part of the offering on a particular Sunday or contributions by interested individuals.
  • Checks to the account must be made payable to the "Clergy Name's Discretionary Fund" and not made payable to the member of the clergy individually. Checks to a member of the clergy individually are personal gifts to the member. Personal gifts are not deductible for income tax purposes. This is so even if the member of the clergy deposits the check into the Discretionary Account. Such a deposit would be a deductible contribution by the clergy person.

Traditional uses of discretionary funds are:

To relieve the poor of the church and the larger parish community, such as payments for food, rent, utilities, medical bills, and the like.

Expenses of clergy related to the exercise of ministry not otherwise provided by the church budget, and as agreed to by the Vestry, such as:

  • Attendance at conferences
  • Purchase of books and journals
  • Entertainment of persons directly related to the church's ministry
  • Membership in groups that are related to the exercise of ministry

Funds should NOT be used to:

  • Sustain the ongoing operations of the Church
  • Pay for anything which personally benefits the clergy person, i.e. personal clothing, food, books, vestments, rents, utilities, insurance, automobile payments or expenses, medical bills, general purpose magazine subscriptions, club dues and travel.
  • Payments to church employees. Monies to employees are generally considered wages by the Internal Revenue Code and should not be made from discretionary funds.

Some clergy may wish to code the name of the assisted individual to maintain confidentiality. This is permissible provided a procedure is agreed upon in advance between clergy and vestry. The clergy person should maintain records regarding receipts and disbursements from the discretionary fund and submit to the vestry or church treasurer on a periodic basis.