As a pastor I have often wondered what would happen to charitable giving (“tithes and offerings” in church parlance) if those gifts were no longer tax deductible.
It looks like we all are about to find out.
With the recently signed tax reform legislation in the United States, many Americans will lose any tax advantage by giving to tax-exempt organizations. Unless your total deductions (mortgage interest, excessive medical expenses, charitable giving, etc) exceed $12,000, $18,000 or $24,000 (depending on filing status) you will gain no tax advantage from charitable giving.
Your church, synagogue, or mosque? Nope.
The local non-profit dog shelter? Nope.
Crisis pregnancy center? Nope.
Feed the Hungry? Nope.
You favorite missions org? Nope.
That dude selling magazine subscriptions at the gas pump? Nope.
The rubber is meeting the road.
The question, then, is: will Americans give to non-profit organizations without the quid-pro-quo of lowered taxes?
According to the Tax Foundation, fewer than 50% of American filers itemized deductions. Their 2005 study found only 10 states with more than 40% “itemizers.” In 2010, the Tax Policy Center estimated an overwhelming 70% of Americans would claim the standard deduction (then $5,700/$11,400 for single/married filers).
If taxes are lower, those who itemized in the past may have extra income and can continue giving unabated. Those who did not itemize may have more income as well. Perhaps some folks who felt they could not give, or could not give much, will have increased resources to for charitable giving.
Ergo, charitable giving could remain the same or increase if the greater deductions and generally lowered rates leave more money in more pockets.
How shall we then give?
For the Christ follower, how much we may be able to give at a certain time is hardly academic. Real life means real expenses many of which are outside our control. A multi-thousand-dollar visit to the ER can backup cash-flow for months or years. A blown engine is not covered by insurance while getting to work remains an essential. Asking folks with holes in their pockets to “dig deep” returns empty hands no matter how intense the effort.
The rest of us, though, know this: God requires generosity, and we will be generous when we love him with all our heart, soul, mind, and strength. For God so loved the world he gave; when we love we also will give. Hoarding might make for good television, but it makes for terrible Christianity.
As high as the heavens are above the earth, so generosity exceeds the tax code in importance. The measure of our giving, in other words, is more “as unto the Lord” than “render unto Caesar,” even if the latter cannot be overlooked. Jail ministry spawned from failure to pay taxes is not recommended.
Generosity is a matter of priority.
Perhaps a better question is, Where is charity on our priority list? Do we give first and foremost, or last and least? Is the sum total of our “charitable giving” a few pair of worn out jeans and busted pieces furniture dropped at the Goodwill trailer the last week of December?
If you are Christ follower, do you support your local church regularly, and other worthy options when given opportunity? Do you give from the “first-fruits” or as a “last resort”? Do you give joyfully as seed for God to multiply, or grudgingly, holding your money so tightly George Washington turns blue? Do you view yourself as an owner of earthly treasures or a manger in God’s economy?
Here is the challenge: that we give like taxes are not in the equation. Give as if God’s kingdom is more important. Give as though people in closed countries need the gospel. Give as if your neighbor is starving. Give like you cannot take it with you. Because, in case you have not heard: we can’t.
Followers of Christ should never look at an opportunity for generosity and ask, “How little?” Rather, we should ask, “How much?” For, if our charitable giving has been dependent on and measured by a tax deduction, we have hardly been generous at all.
(This post did not address the portion of filers whose taxes may increase now or later, but the principle of generosity remains the same. If expenses on hobbies, habits, or houses limits our ability to be generous, those areas, rather than charitable giving, are the first places to make adjustments.)