Hoping we remain charitable

By Jeff Long

In the mid-1980s, right around the end of a year, I recall hanging around one afternoon at the church office after work. The pastor ducked his head in the doorway and asked the secretary, "Did it come yet?"

"No, not yet," was the reply. Shoulders slumped, the pastor trudged back to his office.

"What was that about?" I wondered. It seems each year, a $10,000 check arrived after Christmas from an elderly parishioner in Florida. He hadn't attended the church in years but was still on the rolls and made one gift, the large one aforementioned, right at the end of the calendar year. The church came to depend on the gift to meet expenses.

The last month of any calendar year is typically a good one for churches and many not-for-profits. For nearly the entire time there has been an income tax in America, a break on what is owed the government is given for those who give to recognized charities, to 501(c)(3) not-for-profit organizations. As the calendar moves toward the new year, people catch up on their donations before time runs out. Churches and all not-for-profits have relied on this "break" for as long as I've been alive.

Charitable contributions only count, from a tax perspective, if deductions are itemized. An estimated 40 million people itemize. The government, for a long time, has incentivized being charitable. With the recent passage of the sweeping tax-reform legislation in Washington, that incentive largely is taken away with the rise in the standard deduction, which will double in 2018. The number of those who itemize is expected to drop by 75 percent.

I serve on the board of a charity in Cape Girardeau, currently serving as its president. For charities like the one I represent, a double whammy is about to strike. Not only have charitable contributions effectively been de-incentivized by federal legislation, but the state of Missouri has defunded low-income housing tax credits, which Habitat for Humanity has relied on to encourage contributions from businesses.

I'm trying to look on the sunny side of all of this. A former clergy colleague of mine is doing the same, telling me, "I have to get creative about tying people's hearts to the ministry." I'll be eager to see the result.

I've been thinking of what motivates people to action. The prospect of a tax break may spur some givers when the offering plate comes down the aisle, but I'm hoping most will give of their financial resources anyway -- encouraged by the Old Testament admonitions to tithe, perhaps, or simply a belief the church's mission should be supported. I'm hoping businesses will see Habitat as an organization that allows the working poor a path to achieve the American dream of homeownership that is otherwise blocked. I'm hoping most of us are incentivized by something other than a break at tax time.

At the small, church-affiliated college I attended in Pennsylvania, the administration used to require attendance at daily chapel. If you wanted to graduate, you had to show up and sign in. As a result, the pews were filled, but by many disgruntled collegians who brought newspapers, food and drink, and other amusements to wait out the 30-minute service. Realizing this was counterproductive, the administration discontinued the required chapel shortly before my arrival in 1976. Chapel became a ghost town, but at least those who showed up wanted to be there. The incentive to go was spiritual, not academic.

My clergy friend is correct. The 501(c)(3) organizations will have to work harder than ever before to secure the support of donors. Every not-for-profit must do more work in resource development. There is no longer a choice. Without a true tax incentive, hearts will have to be tied to purse strings like never before. My head tells me the number of donors and overall giving are about to drop; my heart tells me to keep hoping. I hope the heart is right on this one.