Charity and New Tax Law
A Commentary by Bruce A. Barkhauer
Minister for Faith and Giving for the Christian Church (Disciples of Christ)
Is the tax deduction for charitable giving going to go away? To be honest we don’t know yet, and the idea of it going completely away seems unlikely based on what we have seen so far. However, we do know that the ability and incentive to qualify for it or to use it may shift under the current tax proposal. The final version of the new tax structure is reported to now have been worked out between the two houses of Congress, but the details have not yet been made public. This makes commenting on what the bill will actually contain pure speculation. However, there have been some hints that should make us want to pay attention.
What we do know is that while the charitable deduction currently remains1, there are factors related to marginal tax rates, caps on deductions, the subsidy rate for deductions, and the potential elimination (or capping) of the estate tax that have yet to be defined or determined. (For more these details, visit the Tax Policy Center website.2) These things may very well impact the entire non-profit sector.
What does this mean for your congregation? Again, since we don’t have the details yet of the complete bill – nothing. At least not yet. However, the potential exists that the impact of the current benefit of making contributions may not be the same as it has been in what finally becomes the new tax law. People I speak with who work in the non-profit sector are concerned, especially those who depend on large corporate donors, to fund their philanthropic endeavors. We can always hope that “good corporate citizenship” remains the norm for the businesses in our communities that fund the arts, humanities, and local charities. Corporate “good will” remains a powerful motivator, but there are no guarantees. If the law does change, only time will tell.
In the church, we always want to assume that the gifts we receive are motivated by faith. We hope that people feel great joy when witnessing the power of their resources employed to work transformation in our congregations and in the world around us. Do we recognize that there are other benefits our donors receive? Of course we do! That is why we provide them with accurate documentation of their giving, so that if it is useful to their tax preparation, they will have it and can appropriately employ it.
At the same time, we need to be realistic that potentially, some gifts may not be given or may be reduced in size if the current incentives go away. This presents an opportunity (and a challenge) to the church to anchor our teaching about giving in the solid ground of scripture. By approaching giving as a part of stewardship, which is a whole life response to the generosity of God, we may be able to save ourselves some heartache. We still maintain that instead of funding budgets and underwriting costs, we want to focus on ministry. But foundationally, even before we start building our narratives, we want to set the very act of giving itself apart from anything that feels “transactional”.
As the church, we understand our giving as a spiritual discipline that grows out of our formation in faith. We remember that the purpose of giving is to respond to what we have already received. Stewardship – the faithful management of all things that come into our sphere of influence – is centered in a belief that God has entrusted these things to us and that their use is for the benefit of all. We give out of gratitude for what has come to us, much of which we ourselves did not produce. We give out of trust, believing that God has provided enough. We give out of justice so that the abundance God has created blesses every life and none should be in need. We give out of the joy that today, we have something to share. We give out of faith, that the ministry and mission we empower with our gifts changes us and the world. We give out of love for God because God not only loved us first, but also promised in Christ Jesus that nothing can separate from the love of God. It is about relationship – our relationship with and our connectedness to all and everyone that God has made.
The cure for sustaining giving in these uncertain times is teach the faith and live it out loud. To be attentive to the spiritual formation of our flock and do the very best we can with what is entrusted to us. When we do that, the rest will likely take care of itself. We encourage you to look for ways to teach stewardship that are biblically and theologically sound. When our giving is grounded in God – there is little that will threaten it – even changes in the tax code. And the time to start, if you have not been committed to this is now.
The Center for Faith and Giving can help with educational resources on our website. Visit us for ideas and tools as we walk with you on making the good things you do happen. For a deeper look at the theology of stewardship for the Disciples of Christ, read our study document.
(That doesn’t mean you shouldn’t contact your member of congress and tell them how you feel about preserving this financial incentive for practicing civic generosity!) To find your member of congress by zip code visit: www.contactingcongress.org
1 Forbes 12/3/2017 “Tax Time” internet article