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.