Charities, Churches and other non-profits

[McCulloch]

A charitable organization is a type of non-profit organization. It differs from other types of non-profit organizations in that its focus is centered around goals of a general philanthropic nature, that is activities serving the public interest or common good.

In many countries, a charity has a number of tax benefits, beyond those granted to other non-profit organizations. Most significantly, donations to a charity provide a tax write off to the donors whereas donations to other non-profit organizations do not.

Many countries laws specify that the advancement of religion is deemed to be an activity that serves the public interest, thus allowing organizations with the purpose of advancing religion to provide tax benefits to their donors.

Questions for debate:

1. Can it be demonstrated that the advancement of religion, as practiced by the various churches, truly a benefit to the public?
2. Should donations made towards the advancement of religion and religious practices be subsidized by our taxes?
3. If the answer to (1) is No, then should churches be mandated to keep their finances relating to genuine charitable activities separate from finances relating to the advancement of religion?
4. If the answer to (1) is Yes, then how can a government, through legislation, determine what activities constitute the advancement of religion yet maintain a separation of Church and State?

[McCulloch]

"Churches are, by their very nature, non-profit and charitable. "

Well then, the words "non-profit" and "Charitable" need a definite revision.

As I've said elsewhere, I agree that charitable needs a change in legal definition. If a church does well financially, there are no shareholders getting dividends, no unit-holders who can sell and realize their profit. If they can afford to pay their staff a bit better, then the raise in salary is taxable income in the hands of the employees. Non-profit fits.

Where we agree is on the point about being charitable. Under the current laws, the activities of promoting religion, evangelizing and worship are legally defined as charitable activities on a par with feeding the hungry, tending the sick and protecting the abused. To me, this legal recognition violates the separation of church and state.

Are you aware that Church tax exemption is a very recent thing?

No, I am not. How recent? When did it start?

And considering that religious organizations own something like 20-25% of all the property in the USA....that's a lot of assets to be respected.

Where did you get that estimate?

[Shermana]

Although the Church and the State no longer operate as one entity, these tax exempt laws seem to have been ‘grandfathered’ into our common laws.

David M Andersen in Brigham Young University Law Review writes, “In 1894, Congress passed the first income tax on corporations but exempted from the tax those “corporations, companies, or associations organized and conducted solely for charitable, religious or educational purposes.�

Now we see our government providing a unique status to Churches, but what is their reason for allowing this privilege? Were they afraid God was going to strike them with lightning if they didn’t? The reason for providing tax exempt status may not seem obvious.

Erik Stanley from LaTimes.com says, “In general, governments believed that churches along with other types of community groups enhanced and supplemented government services such as feeding the hungry, housing those in need of shelter and in general using private funds for public good. (Although this is a debate for another time, I note that more and more religious groups are now asking for a government bailout through the “faith-based initiative� and to keep their tax exemptions.)�

The reason why the Church has been privileged with its tax exempt status is because the government expected us to supplement the need for humanitarian services. Basically our responsibility for the welfare of the people relieved this burden off of the backs of government.

Research in progress...it appears "religious purposes" back then meant more than telling people about Jesus.

[Shermana]

I erred, Churches own 25% of TAX EXEMPT property, not all property. My mistake. However I question their numbers of only $20 Billion in property owned by tax-exempt property, I think California alone has that.

Here is a helpful link for showing the actual property value of Churches. One in California is over $4.5 million, another in "Anza" (where's Anza?) is over $14 mil. I imagine there's at least 5,000 like it. One in Houston is valued at $11.5 million. States could easily pull themselves out of their budget crises with this.

http://www.loopnet.com/Churches-For-Sale/


http://www.time.com/time/magazine/artic ... 95,00.html

Of the $20,000,000,000 worth of U. S. property exempt from taxation, nearly one quarter is owned by churches. Custom has sanctified this exemption, which stems from the time when Church and State were one. When they separated (Massachusetts had a State-supported Church until 1833), it was assumed that church property was devoted to public good. But currently more and more churchmen are beginning to question.their right to accept what amounts to a State subsidy for 210,924 U. S. church buildings.

Last December in Manhattan, Rabbi Stephen Samuel Wise, Bishop Francis John McConnell and Dr. John Haynes Holmes, seasoned Liberals, urged that "the special economic privileges of the church" be curtailed because they had been abused. They listed the values of the richest Manhattan churches:* Trinity ...... .$25,000,000 St. Paul's Chapel 6,600,600 St. Bartholomew's 5,400,000 St. Thomas 5,000,000 Collegiate Church of St. Nicholas 4,000,000 Fifth Avenue Presbyterian 3,850,000 Brick Presbyterian 3,600,000

The Christian Century urged that exemption be reconsidered; denominational bodies discussed it and last week an even firmer opponent appeared in the person of Rev. Charles Stelzle, Presbyterian sociologist and publicist. In an interview in the New York World-Telegram he said:

"We boast of our religious liberty, but when we compel a disbeliever in religion to support the Church through tax exemption we go back to the days when everybody was compelled to finance the churches. To say that the church helps decrease the amount of taxes because it reduces crime, for example, is somewhat gratuitous. . . ."

Dr. Stelzle's argument was answered by Lawson Purdy, tax expert and comptroller of rich old Trinity, which by its 200-year old charter not only possesses valuable (and taxable) business and tenement properties but also has a right to all whales washed up on the lower West shore of Manhattan Island. Mr. Purdy argued that if church property were taxed its value would at once shrink because assessment is based upon market value. The market value of St. Patrick's Cathedral would be nothing because no one could afford it. Furthermore, said Mr. Purdy, the value of such a plot as Trinity's old churchyard is based on the fact that it is an open space in the shadows of downtown Manhattan. If it were sold for building its worth would decline, dragging down with it the worth of nearby buildings which overlook it. Hence its value is "fiction."

*Appraised value of Manhattan's two cathedrals: St. Patrick's, $14,500,000; St. John the Divine, $11,300,000.

Read more: http://www.time.com/time/magazine/artic ... z1K2UWWvMf

[nygreenguy]

"You REALLY need to get a grasp on the law. Being a charitable organization has nothing to do with HAVING to give money away. Any organization which is a 501(c) is called a charitable organization. "

If you don't mind, I'm going to use this quote in the future for reference....This has to be one of the greatest defenses of fraud I've ever seen.

How is it a defense of fraud? Should organizations like red cross be forced to give money away? Ive posted several links about this throught these discussions on what non-profits are for. They are organizations which act in the public interest, and are not owned by any individual(s) or shareholders and all excess revenue is put back into expanding the organizations work.

Most non-profits are service organizations, and most dont "give out" any money at all.

[nygreenguy]

I erred, Churches own 25% of TAX EXEMPT property, not all property. My mistake. However I question their numbers of only $20 Billion in property owned by tax-exempt property, I think California alone has that.

Here is a helpful link for showing the actual property value of Churches. One in California is over $4.5 million, another in "Anza" (where's Anza?) is over $14 mil. I imagine there's at least 5,000 like it. One in Houston is valued at $11.5 million. States could easily pull themselves out of their budget crises with this.

http://www.loopnet.com/Churches-For-Sale/


http://www.time.com/time/magazine/artic ... 95,00.html

Of the $20,000,000,000 worth of U. S. property exempt from taxation, nearly one quarter is owned by churches. Custom has sanctified this exemption, which stems from the time when Church and State were one. When they separated (Massachusetts had a State-supported Church until 1833), it was assumed that church property was devoted to public good. But currently more and more churchmen are beginning to question.their right to accept what amounts to a State subsidy for 210,924 U. S. church buildings.

Last December in Manhattan, Rabbi Stephen Samuel Wise, Bishop Francis John McConnell and Dr. John Haynes Holmes, seasoned Liberals, urged that "the special economic privileges of the church" be curtailed because they had been abused. They listed the values of the richest Manhattan churches:* Trinity ...... .$25,000,000 St. Paul's Chapel 6,600,600 St. Bartholomew's 5,400,000 St. Thomas 5,000,000 Collegiate Church of St. Nicholas 4,000,000 Fifth Avenue Presbyterian 3,850,000 Brick Presbyterian 3,600,000

The Christian Century urged that exemption be reconsidered; denominational bodies discussed it and last week an even firmer opponent appeared in the person of Rev. Charles Stelzle, Presbyterian sociologist and publicist. In an interview in the New York World-Telegram he said:

"We boast of our religious liberty, but when we compel a disbeliever in religion to support the Church through tax exemption we go back to the days when everybody was compelled to finance the churches. To say that the church helps decrease the amount of taxes because it reduces crime, for example, is somewhat gratuitous. . . ."

Dr. Stelzle's argument was answered by Lawson Purdy, tax expert and comptroller of rich old Trinity, which by its 200-year old charter not only possesses valuable (and taxable) business and tenement properties but also has a right to all whales washed up on the lower West shore of Manhattan Island. Mr. Purdy argued that if church property were taxed its value would at once shrink because assessment is based upon market value. The market value of St. Patrick's Cathedral would be nothing because no one could afford it. Furthermore, said Mr. Purdy, the value of such a plot as Trinity's old churchyard is based on the fact that it is an open space in the shadows of downtown Manhattan. If it were sold for building its worth would decline, dragging down with it the worth of nearby buildings which overlook it. Hence its value is "fiction."

*Appraised value of Manhattan's two cathedrals: St. Patrick's, $14,500,000; St. John the Divine, $11,300,000.

Read more: http://www.time.com/time/magazine/artic ... z1K2UWWvMf

I agree there are plenty of churches which seem to REALLY bend the rules and live in excess. However, what about all the churches that do good things? What would it mean is we taxed all churches? How many, especially in lower income areas, would go under? Are you ok with this?

[McCulloch]

However, what about all the churches that do good things? What would it mean is we taxed all churches? How many, especially in lower income areas, would go under? Are you ok with this?

I would be ok with the principle of exact tax status equivalency for an organization with this logo

to an organization with this logo

I don't see any reason why the former should get any preferential treatment with regard to taxes.

[bjs]

This has been an interesting debate. Let me see if I can add a slightly different take on it.

Questions for debate:

1. Can it be demonstrated that the advancement of religion, as practiced by the various churches, truly a benefit to the public?

As has been demonstrated in a few other threads, studies have shown that people involved in religious worship services live long, healthier, happier, and less stressed lives than those who are not involved in religious worship services. They are more likely to give of their time and financial resources both to the religious institution and to other worthy causes.

It seems to me that these benefits far outweigh any societal gain that would come from increasing the government’s revenue.

[McCulloch]

As has been demonstrated in a few other threads, studies have shown that people involved in religious worship services live long, healthier, happier, and less stressed lives than those who are not involved in religious worship services.

Could you cite a few of those studies? Is there any bias? Are levels of social interaction controlled for in these studies? Could it be that those who get involved in regular structured social interaction live better lives and that those involved in religious worship are statistically more likely to be involved in regular structured social interaction? Could one get the same health benefit from Kiwanis?

They are more likely to give of their time and financial resources both to the religious institution and to other worthy causes.

Asserting that giving time and financial resources to the religious institution is a benefit of being a part of the self-same religious institution does kind of beg the question, doesn't it?

It seems to me that these benefits far outweigh any societal gain that would come from increasing the government’s revenue.

I am not so sure yet, but I am gracious enough to grant them the benefit of the doubt. For tax purposes, religious institutions should be on an equal footing with those charitable organizations which perform demonstrable benefits to society. What I do question is why churches have greater tax benefits than other charities.

[nygreenguy]

This has been an interesting debate. Let me see if I can add a slightly different take on it.

Questions for debate:

1. Can it be demonstrated that the advancement of religion, as practiced by the various churches, truly a benefit to the public?

As has been demonstrated in a few other threads, studies have shown that people involved in religious worship services live long, healthier, happier, and less stressed lives than those who are not involved in religious worship services. They are more likely to give of their time and financial resources both to the religious institution and to other worthy causes.

It seems to me that these benefits far outweigh any societal gain that would come from increasing the government’s revenue.

Ironically then, the happiest nations are those which are most secular.

[Shermana]

Again, I think any sort of tax-exempt status is in fact giving "establishment" to a Church. At the very least, they should get property taxes.

According to my calculations, every state could pay its individual budget crisis off by taxing those churches. While not a substitute for slashing excess spending and entitlements, it would certainly be a means to take pressure off the income-earners (the ones who would even be able to donate to these donation-collection-and-redistrbution-schemes) and

IMHO, I can't see any reason why anyone would NOT want to make them pay at least property taxes, the choice is basically let your state be mired in debt or treat Churches as parts of the community by letting them have their real share of social responsibility through the way everyone else does it.

Anyone can donate food. I can drop off a big package of canned foods. Why is a Church special?