Would a Change to Charitable Contributions Rules Hurt Churches?
State of the Plate survey suggests concerns--but are those valid?

One angle covered by secular media during the recent release of the 2011 State of the Plate survey results: The possible affects of a current "federal proposal to reduce tax deductions for charitable donations among wealthy Americans," as CNN.com reported Wednesday.

Cathy Lynn Grossman with USA Today's "Faith and Reason" blog focused extensively on that question and response from the survey in a piece also published Wednesday:

The (Evangelical Council for Financial Accountability) is leading a commission to look at changes in regulations for non-profit charities and churches – and fretting about potential changes to tax laws. The survey asked about this with an alarming question:

"If the charitable tax deduction were significantly reduced or eliminated, what impact do you feel this would have on the future giving at your church?"

While nearly all (91%) said it would have an impact, only 30% thought it would be a significant impact.

Kluth acknowledges,

"I don't think it's on the radar screen of a lot of churches. But reality is that it could affect our giving. If the tax deductibility went away, I think you'd see softer numbers in December although, from a spiritual perspective it should not matter."

But Dan Busby of the ECFA says 41% itemize their deductions and it's hard to imagine that cuts wouldn't dampen giving. At a press conference today, he told USA TODAY's Alicia McCarty,

"Those who give even remotely generously are those that tend to itemize their deductions. Thus they are the ones that would be impacted... People don't give solely for tax reasons, but it does play a part."

During a phone interview with Grossman last week, she pointed out to me that proposed changes to itemized deductions of charitable contributions have come up before in Washington, D.C., only to die out.

At your church, how much does this issue weigh on the minds of your staff and leaders, if at all? And if the law was changed, would it affect giving at your church? If so, by how much?

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

Comments

Displaying 1–1 of 1 comments

Nate

April 13, 2011  3:19pm

Wow, I totally missed out on this conversation. Glad you posted it Matt. I'm pretty sure my church would be affected dramatically by this. I mean I agree that the reason people give is not usually for the tax deduction. However, I think the tax deductions give them an incentive to give more than they would otherwise. As a donor, my thoughts might run like this if the new laws were enacted. This year I'll donate $4,000 to my church. Normally I would donate $5,000 but that extra thousand is now going to Uncle Sam.

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