That was the view articulated this month by one prominent nonprofit tax professor: Churches are just social clubs for believers, so they should not receive the same tax benefits and giving incentives as other charities. During this time when our nation is in serious financial trouble, and Congress is earnestly seeking solutions for comprehensive tax reform, ideas like this are significant and must be addressed.
But let’s step back for a moment and understand the context. In the last two months, I’ve written in Crosswalk about the latest finance-related activities and discussions on Capitol Hill and how they specifically impact churches (The Fiscal Cliff and Its Impact on Churches and The Charitable Giving Deduction and Churches). These developments continue to unfold as both the House Ways & Means Committee and the Senate Finance Committee are in meetings to move forward tax reform proposals, which specifically include changes to the laws governing charitable and tax-exempt organizations like churches.
And while it is uncertain whether or not Congress could actually achieve such an undertaking in today’s politically-charged climate, one thing is for sure. Our nation’s financial crisis is not going away, and one day lawmakers will be forced to do something about the billion-dollar budget deficits each year and the mounting $16 trillion debt. Churches and other charities have become targets as Congress desperately seeks a way out of its financial mess.
Enter John Colombo, the outspoken nonprofit professor whom I mentioned in opening this article. Professor Colombo got some attention for his recent comments in a nonprofit law blog regarding churches and their place in the tax system. While admitting that some churches do contribute to the public good by helping the poor and disadvantaged, he expressed his opinion that churches should not be given the same tax benefits as other charities because “many are nothing more than social clubs for believers.”
Professor Colombo went on to argue that taxing churches would be completely constitutional and that donors should not get the same benefit of the charitable deduction when they give to churches as when they give to other charitable organizations. “So let’s give churches the same tax benefits we give all social clubs and nothing more,” he concluded.
In ECFA’s written comments to the House Ways & Means Committee in February, I argued for Congress to preserve—if not strengthen—current charitable giving incentives. Specifically, I emphasized the indispensable role that churches and other religious organizations fill in our communities, not only through their religious teaching and discipleship but also in the countless ways they serve millions of Americans from all walks of life:
These houses of worship offer religious and moral instruction to millions of Americans across the country on a weekly basis. The value provided by churches extends, though, beyond religious and moral instruction to meeting the wide spectrum of human, mental, physical, and emotional needs. Churches provide meals to the hungry and clothing for the poor, education and leadership training for people in all stages and walks of life, opportunities for the community to connect and serve together, care to the sick and bereavement for their families, financial support and community development in America and overseas, assistance to those recovering from alcohol, drugs, and other addictions, and countless other ministries. Truly, there is no way to measure all of the impact of the hundreds of thousands of religious congregations in the United States.
Of course, we know the church is much more than just a social club for believers. Since the time of Christ, the church has literally transformed individual lives and entire societies. We receive biblical teaching in the church that directs us from our selfish sin nature into becoming Christ-like disciples. But the Bible teaches that our lives are not changed through the church simply for our own benefit—we are meant to love and serve others and share the same truth of the Gospel that changed us from the inside out.
The founders of our nation certainly understood the valuable role of churches and religion. President John Adams observed, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” As I shared in my February testimony for the Ways & Means Committee, “Religious congregations provide an environment for discipleship and instill strong virtues necessary for democracy.”
Churches and religious institutions have long received the same tax benefits and giving incentives as other charities. In fact, since our nation’s earliest federal income tax codes, “religious” organizations have been the first ones listed as recognized for tax-exempt purposes. Not only that, religious values also inspire other recognized tax-exempt purposes like charity, education, and others.
As Congress continues working through the challenging financial issues facing our country, it is incumbent upon us as believers to speak out on the valuable benefits that our churches and other Christ-centered organizations provide. While biblical principles should always guide our commitment to giving, we should also seek to preserve the tax benefits and giving incentives historically guaranteed churches that are afforded to all other charitable organizations. Religion and religious-based causes should not be discriminated against in our country that was founded in part to promote religious belief and freedom.
Ideas have consequences, and while the majority of people today would probably disagree with Professor Colombo’s conclusion that churches are “nothing more than clubs for believers,” we must do our part to reject these dangerous ideas—not only in our words but, more importantly, in our actions, just as Christ taught us to do.