USA 501c3 Inurement Clause

Oct 19, 2011
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I am administrator of mission trips at my church. To comply with 501c3 inurement clause (I am not an expert on this - just want to do things properly), the policy has always been for charitable contributions for the individual mission trips, check is made payable to the church, and memo line stated what I'll fictitiously (for this posting) call 2012 AFRICA MISSION TRIP. Let's say I have ten team members. Airfare is $1000, in country reasonable/necessary expenses are $500 per person (food/lodging). So for my ten team members to travel to Africa to do ministry work costs $15,000. There is no personal private benefit. They have to pay for their own souvenirs, snack items during travel, shots, etc. (any and all items that are not specifically attributable to the ministry work are not covered. So I have a clear understanding of this details.

But where I have question is in the memo line, is it okay to put JANE DOE 2012 AFRICA MISSION TRIP, make check payable to the church. There is no private benefit, and funds are only and always used strictly for the ministry work as described above. Is it an inurement violation to put a person's name in the memo line, provided the use of funds is for ministry as above? If we could do it this way, we could provide account statements to team members as to progress of their fund raising. It seems to me inurement is not a technicality as to whether you put a name in the memo line; inurement is how the funds are used. If, for example, no name was put in the memo line, but funds were used for example to pay for an individual's tennis lessons at the end of the trip (no, we don't do that, I made it up as an example), then there is private benefit (i.e.: inurement). But if you put a name in the memo line of the person going on the ministry trip, you are not providing them a private benefit by putting their name there; but helping to account for individual funds raised. And because reasonable control is allowed, even though their name is on the memo line, funds are not strictly designated only for them. If one team member raises more than they need, the surplus could be designated to cover those costs for other team members who had not raised enough (different people have different capacities to raise funds).

I want to understand whether it is clearly legal and proper to put an individual's name in the memo line of the check for funds raised for a missions/ministry trip and it remain a proper charitable contribution per 501c3 without violating the inurement clause, provided the funds are properly used in a way that is only properly for the ministry work. Basically, the only use for the charitable contributions are airfare, meals, lodging, and transportation to/from ministry work (we often use taxi's to transport the team in foreign countries).

I'd appreciate any knowledgable thoughts on this. I am preparing to update policies and procedures and this is one of the points I want to do properly.
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