Love gift for Board Member

by bdc
(USA)

Our church wants to provide a love gift to a board member, who has put in a lot of volunteer time overseeing a remodel project in the church sanctuary.
My understanding of the rules is that this type of love gift is going to have to be reported on a 1099-MISC at the end of the year, because it's for services rendered to the church.
I'm sure that once I present this position the reason will change to something unrelated to this service.
Regardless, I also understand that because he's a board member, a love gift could represent a prohibited transaction, putting the church's tax-exempt status at risk, and subjecting the board member to a 200% penalty.

Am I understanding this right?