As accountants for charities across the U.S. prepare for a possible downturn in donations in 2018, South Carolina Baptist leaders are expressing confidence that giving to churches and Baptist institutions will hold steady — or even grow — despite recent changes to the nation’s tax code.
“I think most Christians give because we love to give, since Christ gave so freely to each of us,” said Gene Fant, president of North Greenville University. “The tax benefits are a nice extra, but I think that for most Christ-followers, it’s not really much of an incentive. I don’t think the code changes will impact most tithing [or] change the bulk of Baptist college donors.”
The Tax Cuts and Jobs Act of 2017, which went into effect Jan. 1, doubles the standard tax deduction to $12,200 for individuals and $24,400 for couples. The higher standard deduction will result in fewer taxpayers who itemize their deductions, which could reduce the incentive to give to charities, including churches and faith-based organizations.
In South Carolina in 2015, according to the IRS, nearly a quarter of all tax filers, more than 500,000 taxpayers, claimed charitable gift deductions totaling $3.1 billion (as reported in a story published Dec. 29 in the Charleston Post and Courier). The Brookings Institution’s Tax Policy Center estimates that giving to charitable causes nationwide may decline as much as 6.5 percent in 2018, according to information published in a Dec. 30 Greenville News story.
Valerie Rumbough, director of investments for the Baptist Foundation of South Carolina, said the new tax law may actually have a “positive effect” on charitable giving.
“The majority of Americans affected by [raising the standard deduction] are considered to be lower-to-middle-income wage earners,” she said. “Studies in the past have shown that these people give not because of the tax savings, but because of their sense of philanthropy, their love for their church or other charity.”
Rumbough said the tax changes may allow those same taxpayers to have more discretionary income, which may create more incentive to give.
She said the new tax law also raises the cap on the percentage of income that taxpayers may claim when making large gifts to charities and institutions, which could be “a huge incentive” for those wanting to make a large gift and be able to reduce taxable income.
“The changes in the new tax law may actually be cause for celebration by charities,” said Rumbough, “since they allow for a more favorable climate for charitable giving.” She said taxpayers should consult with their local CPA or other tax preparer “to determine how these changes affect them personally.”
Evans Whitaker, president of Anderson University, said he is hopeful that those who “appreciate our faith-based approach to higher education” will disprove the experts’ predictions of reduced charitable giving and will support the university at increased levels. “Anderson University is a great value, and giving to AU is more about investing in our future leaders and God’s kingdom than a tax deduction,” he said.
Jairy Hunter, president of Charleston Southern University, said he doesn’t foresee the new tax law having a significant impact on giving to CSU. “Our great donors have invested in our students and our vision of integrating faith in learning, leading and serving,” he said. “We are encouraged by their past support and hopeful that they will continue to give toward student scholarships and our mission.”
Danny Nicholson, president of Connie Maxwell Children’s Home, said it has been his experience that his institution’s donors are “more motivated by the needs of the children and inspired by their faith to give sacrificially, regardless of any tax benefits they might receive.”
Likewise, Tom Turner, president of South Carolina Baptist Ministries for the Aging, said he feels a majority of donors give because they are spiritually motivated and are “not generally influenced by tax deductions.”
The executive director-treasurer of the South Carolina Baptist Convention, Gary Hollingsworth, said he tithes not to receive a tax deduction, but “as a matter of obedience and because of my deep passion to support my church and other Christian ministries.” But he said church leaders would be wise to be aware that the tax law change may affect some people’s giving to the church “if the tax deduction is a high motivational factor” in their giving.
Hollingsworth said recent tax law changes may also provide those who tithe with the opportunity “to reflect on their motive” for giving and “test their willingness to be obedient, regardless of the size of the charitable deduction.”