The whole country waits with bated breath to see if and how President Obama and the Congress will avoid the upcoming “fiscal cliff.” Although this isn’t the usual religious freedom issue, the outcome of the negotiations may impact many faith-based organizations. In fact, many of IRFA’s allies, such as ECFA and World Vision, have released statements regarding one aspect of the budget negotiations, the proposed limits on charitable deductions.
President Obama has proposed capping itemized deductions (including charitable giving) at 28% for those making over $250,000 a year. Some Republicans have proposed a flat cap on or the elimination of tax deductions for upper-income earners. Any of these changes would likely decrease the incentive for the wealthiest Americans to give to charities, dramatically hurting the budgets of most non-profits. Faith communities could be hit hard; counting both houses of worship and faith-based services, religious organizations receive more than fifty percent of all charitable donations (S. Monsma, Pluralism and Freedom: Faith Based Organizations in a Democratic Society ).
Service providers that can’t count on a tithing congregation would be hit especially hard. Rhett Butler, Government Liaison for the Association of Gospel Rescue Missions, says, “Rescue missions rely heavily on private giving to meet the enormous demand for their services and now is the worst possible time for Congress and the White House to put those donations in jeopardy by limiting the charitable deduction. Encouraging strong giving is essential to the work of rescue missions across the country. Every $5 or $10 that a donor doesn’t give is one less meal or night of lodging a rescue mission can provide to a person in need.”
Ideally, we all donate to charities (perhaps even IRFA) because we believe in the good work that they do. However, humans are fallen creatures and sometimes we need more of an incentive to be generous. Let’s hope that the government does not take this incentive away.