Gymnasium and meeting rooms

[Mrs Haruo]

I'm on the operations committee at church, and we have realized that a basket ball team that practices in our church gym has not been paying anything towards utilities and upkeep. Whoever was in charge of this is long gone, and we need to update our policies. What do your churches charge for outside groups? 12 step groups that use a sunday school room? The Tuesday Quilt and Ukelele Society that meets in your social hall for 2 hours ?

[Sandy]

We have an AAU team that rents our gym once a week for a three hour block for $100. The men's league that uses it once a month pays $1,400 for the year. So about $100 per night.

Rooms in the school go for $25 an hour, and a key deposit of $150 which they get back in full if the key is returned, or if, at the end of a year, there are no incidents of their having left a door unlocked after leaving. We know it is them because they have to log out on the key pad.

[William Thornton]

Our church had scouts and recovery groups who used our fellowship hall. We didn't charge them. When a non church couple wanted to use the sanctuary for a wedding, we had a fee of about $500 that included janitorial fees and supervisory personnel from the church who would be present. If my church had financial difficulties I wouldn't hesitate to put a fee schedule in place for use of facilities.

BTW, the fees effectively ended the 'outside' wedding business.

[Sandy]

From my previous church in Houston, we had two large BTU capacity AC units that cost close to $50 an hour each to run. They had to be programmed to come on at least two hours before worship on Sunday, or before a Saturday event for it to be cool enough to use. So the electricity for the sanctuary alone for a wedding would run close to $400. The fellowship hall had one large unit that cost the same, so for a three hour wedding plus reception you were into $550, just for electricity. We required the use of the church wedding coordinator, a security guard to open, close, and direct traffic, and four hours of custodial service. Most weddings used the church for the ceremony, and a private hall for the reception, since we did not allow alcoholic beverage service. We charged $750 for the facility for a wedding and reception up to four hours, $500 for sanctuary and ceremony alone.

But, of course, utilities in Seattle would be a lot less, given that heating and cooling are lest costly in a more temperate climate. We're lucky here in PA that it takes little electricity to cool our gym down when the daytime mid-summer temperatures are less than 90 degrees. We also sit on top of a major gas well, and get a big discount from the gas company because we let them have an access point to their transmission line that runs under our soccer field, so our heating bill is reasonable as well. So we charge rates similar to what the Y or the local churches that have gyms charge,

[Haruo]

[Mrs Haruo]

Thank you. This information is very helpful. I'm new on the committee and have experience in unclogging toilets and as an apprentice carpenter, and industrial security, but when it comes to the finances of running a large building, I am clueless. The idea of an air conditioner costing $50 an hour to run made my eyes pop.

[William Thornton]

[Sandy]

[Ed Pettibone]

Ed: When you rent space to commercial organizations such as the "Jazzercize unit" are you not Jeopardizing your nonprofit status? And in fact if you are making money to support the operation of the building are you not competing with others in the Real Estate rental business and therefore potentially subjecting yourself to Property Taxation? The biblical means of supporting the church is by Tithes and offerings.

[Sandy]

[Tim Bonney]

[Lou]

[Sandy]

Yes, Lou, specifically our early learning center and Christian school. They are considered ministries of the church, but since they generated income outside of tax deductible contributions, it must be reported to the IRS. There's no tax on it, but an annual audit is required, along with a tax form which reports the income, and the expenses. Theoretically, those two numbers in a non-profit corporation should match. If they don't and there's income that is generated, the report must include a plan for spending the additional cash, or it must be deposited in a restricted account for designated expenses.

That's to prevent those who are paying tuition, or a fee for building use to the church, to declare those funds as a tax deductible contribution.

The Jazzercise group that used the building wasn't a church sponsored ministry. They contracted with the church annually for the use of the gym during certain times of the day at the established gym use fee, which covered expenses of operation and maintenance.

[Lou]

[Tim Bonney]

Mrs. Hauro,

Grace UMC doesn't charge for non-profit groups like Boy Scouts, Girl Scouts, etc. As local church policy we don't rent to for profit organizations. We also do not give use to our building to organization which are in conflict with the Social Principles of the UMC.

We do have wedding fees for building use for a wedding which are there basically to cover costs and not really to make money. It is up to me to determine if a wedding can be at Grace.

[Mrs Haruo]

In our church's case, the building the gym is in is nearing 100 years old. Over the last few years the men in the congregation who used to do maintenance have either died off or are in assisted living facilities. The new chairman (and for awhile the ONLY member of the operations committee) is writing a longer and longer list of things that will need repair or replacement soon, and we feel if we are going to be heating and lighting the gym during the winter for outside groups, they need to kick in toward costs of upkeep. They aren't youth groups, there is a fairly new youth center down the street that belongs to the city rec department. I have been asked to look into release of liability forms and help get a better way of keeping track of who is using the building as our custodian who had been keeping an eye on things for many years as did his late father before him died very unexpectedly.

[William Thornton]

Sounds like a 'slam dunk' case for charging for gym usage. Hope it goes smoothly for you.

State laws vary on churches having to pay property taxes and different taxing authorities vary in how aggressively they go after churches that have income from property. Generally, I don't think an occasional fee for use is an issue. One church in Nashville leased their gym to a health club which sold memberships. The tax assessor went after them, rightly so. If unused buildings are rented, or donated property such as houses are rental property, they should be taxed. I wouldn't be surprised if Timothy's cell tower church situation triggered some review of tax status in some places.

[Sandy]

It might be a good idea to check on the state tax regulations regarding rental of church facilities. The key, at least in Texas, was "building use fee." As long as the money was used to cover building use, it was not taxable. Even if a for-profit business used it, and as a result paid less than they would for commercial property, it wasn't a problem. They, of course, are in charge of their own revenue.