Responding to the Loss of the Charitable Deduction

By Mark Hofman

Forbes, an American business magazine read by our nation’s wealthiest people and their financial advisers, on Jan. 31 published an article with an ominous headline:

“This May Be The Last Year You Get A Charitable Tax Deduction”

Soon after the article by Ashlea Ebeling was released, experts in nonprofit philanthropy began organizing. E-mails went out to charities and philanthropy-related firms across the country. A rally in Washington D.C. was planned for Feb. 16 to culminate in meetings with members of Congress and their staffs.

The underlying fear is that the new executive administration of the United States, supported by a majority in Congress, will fast-track legislation that dramatically alters 100 years of giving. Charities that do good will suffer as a result.

The message to people like me, whose own livelihood depends on charitable giving, is clear: “You’re part of the nonprofit sector! Help stop this plan!”

So, what should I do? Should I jump on a flight to Washington? Sit with senators and congressmen/women (or at least a member of their office staff) and share my worries with them?

Should I beg them to stand with me, you and others to preserve the charitable tax deduction lest the fabric of our society come apart? Should I blast out a letter to every person in our database? Should I send e-mails to everyone I know with a valid e-mail account, spreading the news of this important threat to the future of the LCMS and its mission?

As I read the various pieces of information about this possible tax-code change, perhaps the wisest thing I can do with my time (and your donations, by the way) is to remain calm. I should take a deep breath of fresh air because there is plenty of that for all of us.

I should reflect on a very important question: Why do people invest in the work of any charity — and especially the work of our Lord’s church?

If people give because they can get a tax deduction, if that is the primary reason, what does it say about the true value of what any nonprofit does? Think about your congregation for a few minutes. Do you put the offering in the plate mainly because you can deduct the gift on your income taxes the following year? Is that it?

I don’t believe it is — especially for believers — and nearly every sound resource used to train me says the charitable deduction is way down on the list of reasons for why people give. Giving to get anything even goes against the concept of philanthropy (love for our neighbor).

Will people give less if the charitable deduction is eliminated? Maybe.

Will the loss of the charitable deduction ruin the fabric of the nonprofit sector and cause the end of the world? Only if getting something out of the act of giving is more important than the positive change that happens through the church and its related nonprofits.

In the end, I encourage you to invest some time thinking about what is truly important to you and about what truly matters in the act of sacrificial giving.

Each contribution made by a Christian is, after all, a witness to the world about what truly matters. And if that is the charitable tax deduction, I strongly urge you to call your Senators and Congressmen.

Mark Hofman, CFRE, MBA, is the executive director of LCMS Mission Advancement.

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Note: LCMS leader blog articles express the personal experiences and views of our ministry staff and have not been subjected to the LCMS doctrinal review process. Readers are encouraged to leave questions in the comment section or consult their pastor with any queries related to this content.

9 Responses to Responding to the Loss of the Charitable Deduction

  1. Jennifer February 20, 2017 at 4:30 pm #

    I do not file a 1040 but a 1040A because I do not have enough in total deductions. This does not allow me to deduct my charitable giving. So I guess, no, that this would not change my giving.

  2. February 20, 2017 at 5:22 pm #

    Forbes: Also read by some regular folks, who aren’t part of the nations wealthiest people and their financial advisors.

    • Mark Hofman February 21, 2017 at 9:44 am #

      I appreciate that reminder, Bart. It’s an insightful publication useful for many people.
      ~ Mark

  3. Melody February 20, 2017 at 5:40 pm #

    Permission to reprint in the church newsletter, please?

    • LCMS Church Information Center February 21, 2017 at 7:43 am #

      Thank you for your comment. You have permission to reprint this in your church’s newsletter when giving proper credit to the source.

  4. Jennifer Knutson February 20, 2017 at 6:15 pm #

    When we first purchased our home, that deduction for charitable giving was a pleasant surprise at tax time. But considering why we give – and when we give – I can’t imagine that making much of a difference in our giving habits. We give to support our congregation, to support ministries that are important and don’t have a broad appeal. Hopefully, we aren’t out-of-the-ordinary. In our congregation, we do struggle with income – but I don’t think our household ‘out-gives’ other members. (Luckily, we don’t know – and I’m very glad.) I would think this would have more impact on giving outside of the Church.

  5. S Soerens February 21, 2017 at 11:27 am #

    I don’t know when the charitable deduction was added to the tax code, and its history is tied up with statutes on tax-exempt organizations that existed long before the beginning of the income tax in 1913. Nor do I know how other nations around the world handle charitable donations in their tax code, even though they have charitable organizations. It does demonstrate, however, that the concept of charity as an income tax advantage is useful, but not necessary.

  6. Lynn Retzlaff February 21, 2017 at 3:18 pm #

    I made sure to make this important point known to my Congressman and Senator. It is be easy, convenient and simple to always make a charitable deduction on our taxes as well as keeping the deduction for all tax payers.

  7. Kim Krull February 22, 2017 at 10:48 am #

    Excellent reminder and well said!

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