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Are church contributions about to fall off the Fiscal Cliff?

Jack Brooks
Executive Director
Mid-Atlantic United Methodist Foundation, Inc.

Much has been written of late about the pending “Fiscal Cliff,” popular shorthand used to describe the challenge our government is facing at the end of 2012. At midnight on Dec. 31, the terms of the Budget Control Act of 2011 are scheduled to go into effect.  A number of tax breaks for businesses, tax cuts for individuals, and automatic spending cuts in government programs will be triggered.

Should the church care about the “Fiscal Cliff” or is this an issue for politicians to wring hands over while America sits and watches the news? Normally, it would be a complex answer of politics, policy, time, and eventual problem solving that we have little control over. But lately charitable and church contributions have entered the debate. 

The issue of charitable deductions, and in particular church charitable deductions, has recently emerged as a hot new topic of conversation in the search for revenue. The question being raised in a number of editorials and articles is simple. Should donors to churches and charities be allowed to continue to take a tax deduction for contributions at a time when the government needs additional tax revenue?

How much revenue is related to church deductions? In April, a University of Tampa professor, Ryan Cragun, and two students examined U.S. tax laws to estimate the cost of tax exemptions for religious institutions. They came to the conclusion that by denying religious institutions tax exemptions on property donations, business enterprises, capital gains on investments and sales and "parsonage allowances," the Treasury could raise as much as $71 billion a year. A tempting number when everyone is looking for additional revenue sources.

The Bible suggests we contribute 10 percent of our income. Christians do not make charitable gifts for tax reasons, but tax incentives have encouraged more giving and have often made bigger gifts possible. Tax incentives seemingly reinforce the core Christian value that being charitable matters to all our society. But this is also why it comes under attack.

A recent editorial by Jodi F Bullock is an example. In the editorial she questions “Why should any taxpayer be required to pick up the financial slack left by religious institutions while they tend the spiritual needs of their limited congregation and do little else that is definitively beneficial for the general population subsidizing their work?”

We who are blessed to share the United Methodist connection know the answer. Our mission work speaks volumes in response. United Methodist missions are active in communities from coast-to-coast and around the globe. Millions of volunteers and millions of dollars in generous financial support have shaped change in the lives of our fellow man throughout the history of The United Methodist Church. Even before the income tax itself was enacted early in the 20th century, the church was making a difference

Is our work “definitively beneficial for the general population subsidizing their work”? I would argue yes. Certainly it would cost our general population if there were less volunteers or financial contributors in the church. The tax deduction taken on a form once a year is perhaps more a simple reminder of our participation in the mission of the church.

As Christians we are not motivated simply by a tax break we may receive, but by our true scriptural understanding of benevolence. The charitable tax deduction encourages us to choose kindness, compassion, and to use our abundant wealth to help those without. It allows us to voluntarily redistribute a portion of wealth to church purposes and is part of an American philanthropic heritage that is truly worth keeping.

As we enter this season of giving I suggest you take advantage of the current tax policies and be a generous giver to the mission and ministry of your choice.

For more information contact the Mid-Atlantic United Methodist Foundation at 800-828-9093, Ext 247.