Death, Taxes, Politics, Religion & Nonprofits

How can we count the ways that the Republican tax plan is bad for nonprofits and for our country? Here’s how:

Charitable giving is likely to decrease: The plan doubles the standard deduction. Experts predict this would cause a $14 billion decline in giving because the number of Americans who itemize their deductions and take a write off for their gifts would decrease precipitously.

Contributions from rich people will dominate: The plan focuses on increasing rewards for charitable giving aimed at rich people, rather than all income levels. Those who still itemize would get an even bigger charitable deduction (up from 50 to 60%), while the repeal of the estate tax leaves even more dollars for the well-to-do. The charitable deduction would become a tax benefit that specifically privileges the rich, and allows them to become the biggest voice in determining the focus of the nonprofit sector.

Churches will have license to become vehicles for politicking without accountability: All nonprofits can already speak out about political, social, and moral issues; repealing the Johnson Amendment would expand this to endorsement of partisan political candidates. Churches are 501(c)(3) nonprofits with a special dispensation; they don’t have to file IRS form 990. This means that donations made to churches for partisan political purposes would be both tax-deductible and anonymous. Note that 4,200 faith leaders, 5,500 nonprofit organizations, and 103 religious organizations have told Congress they oppose the repeal of current law.

Barriers between church and state will be eroded: The loudest voices in support of the repeal of the Johnson Amendment are Christian nationalists who believe our laws should be specifically guided by their very conservative Christian principles, movie towards a theocratic state. Full disclosure: I am not a Christian, and this view scares the neck out of me.

Nonprofits will be politicized: Nonprofits would be allowed to endorse and support political candidates, while still keeping their tax-exempt status. Political parties, candidates and wealthy donors could use tax-exempt organizations as tools or pressure them for endorsements. Consider this: Roy Moore’s charitable foundation (Foundation for Moral Law) has been actively promoting his candidacy. But the focus of nonprofits should be on doing good work in the community based on their charitable missions, not entering into our charged and divided political discourse.

I hope you will continue to press your congressional representatives to these dangerous consequences of the tax plan.