The recently enacted American Taxpayer Relief Act of 2012 (“ATRA”) that ended the so-called fiscal cliff limits the amount people can claim for charitable deductions. The new limitations are highly technical, but presently apply to individuals making $250,000 or more, and married couples making $300,000 or more. Some tax analysts have noted that the limitations on charitable giving will vary depending upon individual circumstances. Thus, as one example, taxpayers in high-tax states, such as New York or California, may find their charitable deductions as valuable as in prior years, whereas taxpayers in low-tax states, such as Texas and Nevada, will find that their charitable deductions cost considerably more. Nevertheless, ATRA is expected to garner our nation’s federal government tens of billions in additional tax revenues. However, nonprofits in the United States fear that such limitations on charitable giving will cost nonprofits billions each year. According to Philanthropy News Digest, the new cap on tax deductions for charitable giving could potentially reduce annual giving by up to $7 billion a year. This comes on decreased giving resulting from an economy with lackluster growth, high unemployment and even higher underemployment, increased costs of gasoline (average increases of 25% per year over the past four years), and significantly higher food costs, which cost the typical American family many thousands of additional dollars per year. At the very least, organizations that rely upon charitable giving might be prudent to plan for potential decreases in charitable giving in 2013 and the foreseeable future.
Of course, Christians should give tithes and offerings, whether tax deductible or not. A tithe is defined as 10 percent of gross income. Many of my readers are aware that the Bible teaches about multiple tithes and offerings, and we see in Malachi 3 that God encourages charitable giving to God. Malachi 3 is important as it affirms that just as there are physical laws that govern the physical universe, there are also financial principles that govern our financial universe, including the principle of sowing and reaping. St. Paul reaffirms this in II Corinthians 9: 6, when he writes in the context of giving: “Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously.” But most importantly, it is the attitude of our hearts that God is looking at, and we must never forget God loves those who are cheerful givers (II Corinthians 9:7).
I have often heard people say that Christians have no obligation to tithe because we are under grace, rather than under the Mosaic law. Perhaps you have heard that as well. The Mosaic law, of course, did not provide eternal life for those who attempted to keep it (see Galatians 2:16, and 3:21-22), or else Christ’s death on the cross for us would be unnecessary. However, as Christian believers, we have received eternal life by the unmerited favor of God, even though we do not deserve it, and could not possibly earn it. So, we should have an even greater motivation and a higher standard for stewardship of our possessions than for those under Jewish law.
Thus, in 2013, echoing the words of Joshua 24:15, as for me and my household, we will continue to give to Christian groups affirming Christian values (including the Fellowship of St. James, which is responsible for the publication of Touchstone and Salvo, and this blog), and to churches working to serve the poor, and that seek to fulfill the Great Commission of St. Matthew’s Gospel, 28: 18-20. I don’t want to merely give to get from God, but it does make me happy to have God consider me a cheerful giver, whether the IRS gives me a tax deduction or not. It just might require a bit more sacrifice on my end, but in light of Christ’s love and sacrifice on our behalf, is that really too much to ask.