Taxpayers, not taxes, can support faith-based charities
WASHINGTON — When President Bush proposed extending "charitable choice" to more government programs, a firestorm of controversy erupted. (Charitable choice allows federal funds to go to religious congregations that provide social services.)
The major religious faiths are divided over Mr. Bush's plan. Public opinion is skeptical. And the media, seeing those divisions, have fanned the flames of controversy. Now Congress is debating Bush's proposal, with strong partisan overtones.
But let's leave this issue aside. There's a better way to channel money to religious congregations providing community services than through direct government funding. Bush himself has proposed a plan to stimulate increased charitable giving by allowing all Americans - including those who do not itemize on their tax returns - to deduct their charitable contributions from their taxable income. Currently, only those who itemize on their tax returns can deduct their charitable contributions. So by supporting a rising tide of giving that will lift all charitable boats, the president will be able to increase funding significantly for religious congregations.
A study done for Independent Sector by PricewaterhouseCoopers indicates that the president's charitable deduction proposal would increase private charitable giving by $14 billion a year.
If 60 percent of that new money goes to religious congregations, as giving by America's 80 million nonitemizers currently does, that is $8.4 billion a year in new resources, dramatically more than what "charitable choice" has channeled to date - or may in the future - to religious congregations.
There are other reasons Congress should get behind the president's charitable-deduction proposal. First, it will generate new, increased funding for all charitable organizations, including religious ones. In contrast, charitable choice simply slices up the pie of government funding differently, but does not increase the overall size of the pie.
Second, the president's charitable tax-deduction proposal averts all the controversy of charitable choice by encouraging new private giving. Instead of fighting over whether a particular denomination should or should not be eligible for government funding, Congress should enact a proposal that will help all Americans give to the charitable organizations of their choice. Let Americans decide whether they want to fund the Nation of Islam, their local church or synagogue, or any other charitable group they choose.
Instead of bickering over the fine print on government contracts about whether a prayer service was or was not government-funded, let's give all of America's charities and religious congregations increased private resources they can use to fulfill their missions.
Third, the president's proposal offers $52 billion over 10 years in tax relief to low- and middle-income taxpayers, who make up the vast majority of nonitemizers. Democrats should step forward and embrace this part of the president's tax agenda because it does exactly what they say they want: A targeted tax cut for working families. Republicans should strongly back the tax cut because not only is it part of the president's plan, but it will also stimulate new private giving and private charitable initiative.
Fourth, according to our research, the president's proposal will help 11 million families become first-time givers. Research shows a strong correlation between giving and volunteering, so, in addition to their charitable gifts, millions of new givers may also become volunteers in their churches, synagogues, mosques, schools, community centers, or whatever cause they support.
Finally, the president's proposal will allow the poor - who give a higher percentage of their income to charity than higher income groups - both to get a tax break and increase their giving. Giving by the poor tends to go to the faith-based and secular service programs in their communities that provide homeless shelters, youth programs, drug treatment and prevention, and job training.
As Congress prepares to enact a far-reaching tax cut, the president's proposal for a charitable deduction for all taxpayers should be part of it. Religious congregations, faith-based and secular nonprofit organizations, the left and the right, Democrats and Republicans, the president and Congress need to ensure that the charitable deduction is passed into law this year.
Sara E. Melendez is president & CEO of Independent Sector, a coalition of 700 national nonprofit organizations, foundations, and corporate philanthropy programs. Bob Edgar is general secretary of the National Council of the Churches of Christ of the USA.
(c) Copyright 2001. The Christian Science Monitor