Diocese of San Diego
POLICY ON PROHIBITING CERTAIN FINANCIAL INCENTIVES
A growing number of corporations and commercial enterprises are offering financial incentives to parishes, schools and diocesan institutions. These offers pertain to various telephone services, private insurance packages, household and personal products, banking services, credit cards and the like.
Any form of express or implied endorsement or promotion of a commercial enterprise or its product or service which encourages parishioners or other constituents to purchase the goods or services puts the parish, school or institution in the position of favoring one business over another for commercial benefit. This includes announcements, meetings, letters, sharing of mailing lists or other arrangements. A parish, school or institution that accepts these incentives risks being subject to unrelated business income tax liability as determined by the Internal Revenue Service.
In some situations there may even be conflicts of interest, such as the case where an employee, volunteer, or council/board member also works for the commercial enterprise involved. It is important that the Church remain above reproach in connection with the business affairs of others.
In addition, in the event of a customer’s dissatisfaction or consumer complaint with respect to the product or service, or if any harm comes to an individual as a result of the product or service that was “endorsed by the Church”, the parish, school, or institution, and the diocese could be faced with adverse publicity and possibly even lawsuits.
More importantly, however, the diocese and its parishes, schools or institutions must avoid any perception that the Church is “for sale”.
Therefore, involvement with such programs is hereby prohibited. This prohibition has the support of the diocesan Office for Civil Affairs as well as the Office of General Counsel of the United States Catholic Conference.
There is nothing wrong with a company or any vendor publicly or unilaterally announcing (e.g. through a television or radio ad or parish bulletin advertisement) that it will voluntarily remit a percentage of sales to a charity. Nor is there anything wrong with a company
donating, on an unconditional basis, money, goods or services for an event and for the parish, school or institution to publish a simple, unsolicited acknowledgment of its gratefulness for any such donation.
However, the sale of scrip should be considered to be an exception to this rule. Although the sale of scrip clearly raises all of the issues mentioned above, many schools and parishes rely heavily on the income that it generates, and have built programs that depend on that income. Therefore, it