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CARITAS CORNER: Charities and Donors Must Do More in Light of Tax Changes

12/18/2017 | Comments

“Somebody is going to hurt.” That is the way one Congressional staffer characterized the state of our federal budget to me this summer. Discretionary spending on social programs like Head Start, Community Development Block Grants, and SNAP food assistance face dramatic cuts that could impact El Paso County non-profits by over $50 million annually. These programs are pitted against spending on infrastructure and the military, and without raising taxes there is not enough money to go around. Any resolution on the budget is guaranteed to be met with significant pushback from one side or the other of the political spectrum.

In recent months, the situation has become even more worrisome for charitable organizations with the current tax plan proposed by Congress. Specifically, the proposed changes are expected to reduce the percentage of taxpayers who take charitable deductions from 30 percent to 5 percent, resulting in a reduction of giving by over $13 billion per year nationally. It has non-profits wondering what the future holds. How can we cut federal funding and remove incentives for charitable giving at the same time?   

That this debate comes down to what we, as Americans, pay in taxes rather than how we care for our poor and vulnerable is evidence of both a problem and an opportunity. Alexis de Tocqueville recognized that the time would come when our nation would have to reconcile the role of government in supporting social services in the 1830s when he wrote “Democracy in America.” He said, “The task of government will therefore constantly increase and its very exertions must daily extend its scope . . . The only way opinions and ideas can be renewed, hearts enlarged, and human minds developed is through reciprocal influence of men upon each other.” To de Tocqueville, democracy could not flourish if government mandated the care of our neighbors. More than anything, it is an issue of capacity; as government expands, the people must take on the responsibility to care for social needs of each other.  

The Christian Church has long been the center of support for the needs of our poor and vulnerable in the United States and in our local communities. With the changes in government funding and incentives for giving, this support will be more important than ever. But we cannot rely solely on the faithful to help our neighbors in need. We need all people to start giving more, and we need more people to give something. The most worrisome trend is not the loss in federal funding but the decline in philanthropic giving. In Colorado, the average charitable gift donation has dropped from $2,547 in 2009 to $1,490 in 2017. Our communities, not just our poor and vulnerable, desperately need this trend to reverse.

Our non-profit organizations are equally responsible for a change in paradigm. We must constantly strive to be better stewards of the money that is donated. We need models and programs that focus on improving outcomes for the people rather than simply counting the number of people served. Meeting basic needs such as food and clothing cannot be an end unto itself. The meal at a soup kitchen should be a first step toward finding a job, accessing health care, or stabilizing the family structure. Love for humankind is not about perpetually doing something for someone else, but rather empowering people to be able to do for themselves — to reach their God-given potential. That is a far better return on philanthropic investment and better for our society.

De Tocqueville identified the solution that was ingrained in our nation. “Not until I went into the churches of America and heard her pulpits aflame with righteousness did I understand the secret of her genius and power. America is great because she is good, and if America ever ceases to be good, she will cease to be great.” It is what we do for each other that makes us great. Remembering this fact in light of the changing landscape of federal budgets and taxes will serve us well. Philanthropy can ensure that no one has to hurt.    

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