Removing the Tax Exemption for Religious Congregations Is the Wrong Move for Our Polarized Nation
With the approach of both Giving Tuesday and the end-of-year tax-deductibility deadline, the charitable giving season is upon us. As always, modest changes are likely in both the causes people support and how much they give. But one constant will undoubtedly remain: Americans will continue to donate much more to religious organizations than to anything else.
Religion attracted nearly $136 billion in contributions in 2021, according to Giving USA, or 27 percent of the nearly $485 billion in total charitable donations. No other cause drew more than 14 percent. Among individual givers, religion-related contributions have run as high as
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With the approach of both Giving Tuesday and the end-of-year tax-deductibility deadline, the charitable-giving season is upon us. As always, modest changes are likely in both the causes people support and how much they give. But one constant will undoubtedly remain: Americans will continue to donate much more to religious organizations than to anything else.
Religion attracted nearly $136 billion in contributions in 2021, according to Giving USA, or 27 percent of the nearly $485 billion in total charitable donations. No other cause drew more than 14 percent. Among individual givers, religion-related contributions have run as high as 41 percent in recent years. And the actual amount is almost certainly higher since contributions to Sunday collection trays are unlikely to show up in IRS or Giving USA data.
Religious giving is arguably a hallmark of American democracy. Thanks, in part, to the nation’s lack of an established government-supported religion, denominations compete for dollars and members. Yet, charitable support for religion and the tax exemption it enjoys has nonetheless become a surprising target of critics, some of whom charge that it doesn’t merit its tax deduction.
This past spring, author Robert Repino, in an essay for the progressive faith group Sojourners, argued that “churches should not automatically get tax exemptions,” noting that “mosques, synagogues, and other religious institutions enjoy these benefits simply because they are religious and not because of any charitable work they do.”
Rob Reich, a Stanford University political scientist and philanthropy scholar, made a similar argument in his book Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better. He noted that “churches provide something more like club goods than public goods ... They are more like mutual benefit than public benefit organizations.” As head of Stanford’s Center on Philanthropy and Civil Society, Reich is an important voice in philanthropy, and his view must be taken seriously.
For Reich, charitable giving should be, above all, “redistributive” — meaning it should help the poor. That congregations devote less than 5 percent of funds to “local service activities” undermines the claim that they provide a public good, according to Reich.
But this narrow, indeed, blinkered view of the value of charitable support for religion — and, by extension, the argument that it may not merit a tax deduction — fails to appreciate the profound value of religious congregations and their activities in ways that measurements of social-service dollars inevitably miss.
As Harvard political scientist Robert Putnam has demonstrated, we live in an era of extreme individualism. In his 2020 book The Upswing, he tracks community vs. individualism in America from 1890 through 2017 and finds what he describes as an “inverted I-We-I” curve, describing a “gradual climb into greater interdependence and cooperation, followed by a steep descent into greater independence and egoism.” Increased self-focus, says Putnam, has damaged “our experience of equality, our expression of democracy, our stock of social capital, our cultural identity and our shared understanding of what this nation is about.”
As American society has fallen into anomie and isolation — as reflected by the increased numbers of “deaths of despair” — religious congregations represent an antidote. They cannot, to be sure, ameliorate all that ails America — or all that Reich hopes philanthropy might address. But they are a great storehouse and incubator of the social capital Putnam describes. In addition to providing a forum for worship, they enable complex webs of interconnection between members and across generations. Those who attend churches, synagogues, and mosques visit people in their congregations who are ill, attend funerals, and bring meals to families in mourning.
In a postpandemic era in which screen avatars often replace physical reality, this type of connectedness should not be taken for granted. It lays a foundation for social trust that can’t be measured or counted.
Group activities in my own synagogue — picnics for the elderly, trips for teenagers, Israeli dance lessons — might be viewed as clubs by Reich and others, even though they are supplemented by food-bank collections for the broader community and book drives for public-housing residents. Such volunteer work, however, should not define their importance. The relationships that develop among members and their children lead to other activities that may have no official link to the congregation but provide broader benefits. A physician participating in one of these activities may learn of a drug-treatment center and volunteer her time. A lawyer may find out about a cause that inspires pro bono work.
‘Do Life’ Together
The approach taken by one of the nation’s largest congregations, Prestonwood Baptist in North Plano, Tex., is a case in point. The megachurch claims 45,000 members and weekly attendance at its two campuses of some 17,000. As an evangelical congregation, it is part of what is now, according to the Pew Research Center, the largest religious group in the United States. Prestonwood’s staggering range of ministries notably includes one that is clearly oriented toward working with society’s disconnected individuals.
According to the congregation’s website, its Open Division program “is a place where people from diverse backgrounds ‘do life’ together. Our groups exist to connect people — married and single, young and old — to God, one another, and the world God loves.“
While the members are perhaps the most direct beneficiaries of this program, larger society benefits as well when someone dodges depression and despair — and the attendant societal costs of treating them. The program also provides direct social service. Male members are encouraged to mentor boys raised by single mothers. And the time commitment is substantial, including four to six hunting and fishing trips each year.
This is not a program that will show up in any social-service spending account. Its mentors are all volunteers. Their work is not redistributive in a financial sense — but when it’s effective, it may increase the distribution of life opportunities for many people.
Not every religious congregation, of course, houses efforts as elaborate as these. But whether or not the nation’s estimated 350,000 congregations provide direct or indirect assistance to those in need, it is a misunderstanding of their profound value to dismiss them as clubs. The loss of tax revenue — whether in forgone property taxes or through the charitable deduction — should be of less concern than the sharp decline in congregational membership, which for the first time has dropped below 50 percent, according to Gallup.
Certainly, people connect through tax-exempt nonprofits of all sorts, whether as volunteers or board members. Yet, even as their numbers have declined, some 56 million Americans attend church each Sunday, and thousands more attend mosques and synagogues. In many poor communities, churches of modest size are the only beacons of community and togetherness.
The value of religion in providing links among neighbors, promoting friendship, and building a foundation for good works in an increasingly fragmented society transcends any tax accounting. During this time of extreme polarization, limiting the tax deduction for America’s most popular form of charitable giving would be exactly the wrong move.