“Render unto Caesar, that which is Caesar’s.”-Jesus of Nazareth
This is perhaps the most overlooked and deliberately ignored of Christ’s teachings, particularly amongst the most religious, conservative, and evangelical demographics of the United States. The admonition to give to the government that which the government rightfully requests is, in essence, an order by Christ to stop complaining and pay your taxes. Who fights harder in this country again taxation than the religious Right? That, however, is an issue for another day. The salient point in this post is that, quite perversely, Churches in the United States do not render unto Caesar. The fact is that churches are granted sweeping, easily abused, and rarely audited tax exemption.
Like it or not, we are all aware that there is a separation of Church and State in this country, so it may not be immediately obvious why religious organizations are, by default, granted tax exemption. Isn’t a tax exemption a direct government subsidizing of religious practice? In theory no, although in practice, that is often the case. Churches are granted tax exemption as 501c3 Non-Profit charitable organizations. This is the same tax exemption that is granted to many other charitable groups at the community and national level.
The concept of the Tax Exempt charitable organization is a sound idea, and one that I strongly support. The social theory is that taxation is money taken from individual entities, and pooled for investment towards the greater good of the entire community. In the case of charitable organizations, they are considered to already be contributing to the greater good in a more potent and direct way than taxation could, as seeking out and alleviating social distress is the primary goal of such an organization; therefore granting that organization tax exempt status allows more of its resources to be funneled directly into good charitable works. Such organizations must file paperwork demonstrating that their primary function is charitable work. Employees of these organizations may be paid, but the organization itself must not be profit seeking. Any such organization must also be politically benign, it may not use its resources to pursue the interests of any particular political party. These groups must also make their budgets and revenue available to the public to prove that their spending is focused on helping the community.
There is nothing wrong with the implementation of Tax Exemption for such groups. The problem is that Churches, and their associate conventions, are granted tax exemption automatically, with no need to submit the paperwork, prove their political neutrality, demonstrate their non-profit status, or own up to their charge of community betterment as a primary focus. Churches are given a pass on the rules all other similar groups must adhere to. The rationale for this automatic exemption is that Churches, by their very nature, will be charitable and community oriented, and bear no burden of proving it, or being subject to scrutiny on the issue. It is rare, to the point of being practically a non-event, for a Church to be audited or investigated for what they do with their tax exempt money, and may there be no mistake about it, we are not talking about small or inconsequential sums. Many readers may be imagining the small neighborhood church of their youth, making do with the modest tithes the small congregation manages to scrap together, the preacher residing in a humble parsonage. Indeed these kinds of churches to exist, but when you split religion up by demographic, and by control of wealth, these churches make up a small and quiet appendage on a much larger, louder, and hungrier dragon.
In any Midwestern town of an appreciable size, from populations as small as 5 or 6 thousand and up, you will find at least one large church, often with enough outbuildings and wings to be considered a campus. In cities with populations closer to 100, 000 you will often find multiple large expansive churches with properties worth a million dollars or more and congregations of thousands. Moving up the scale on step further you will find the Megachurches, which command congregations of tens of thousands, with multi-million dollar churches, stupendously rich pastors, and parsonages that rival the homes of the most over paid NFL stars. And still above that, you have the major centralized denominations, such as the Church of Latter Day Saints, Scientology, Catholicism, and Southern Baptist Convention. These groups command wealth beyond most people’s imagining, inform the hearts of minds of millions, and run massive international operations from palatial headquarters.
These groups do not pay property tax, income tax on any donation (their primary source of income is tithing of course), tax on parsonages, sales tax on market goods, or capital gains tax on investment. What we are seeing is the United States citizenry subsidizing religion through tax exemption on a scale of close to 100 billion dollars a year.
This would all be fine if these massive institutions had community service at the heart, commanding their budget, and being the main focus of their attention. An extra 100 billion dollars put towards helping people directly at the local level is something I could support, however financial records show that this is not a case. First, one may make an informal assessment by stepping into almost any church. You can’t help but become imminently aware of exactly what community the church is focused on, and that is the community in their pews. Churches are full of expensive ornaments of faith. Only the smallest and poorest of churches are without elaborate stained glass windows, dramatic architecture, sound systems, professional lighting, robes, goblets, trays, tapestries, ect. Larger churches drip with luxury, and Catholicism, for example, is known for the grotesque opulence of their facilities and services. When we glance about a typical church, it is difficult to imagine that community service is really the primary concern of those running the budget. On the face or it churches appear to hold pageantry and ceremony as priorities over genuine community service. Sadly, when examining their financial records, the numbers bear this out.
All other non-profit organizations must disclose their financial information as a matter of public record. Churches are, for no good discernible reason, exempt from this requirement. Because of this fact, getting a good idea of exactly how Churches use their funds is difficult, but a study reported by the Council for Secular Humanism reports that out of 271 US Congregations surveyed, and average of 71% of their budget was dedicated to operating expenses, leaving only 29% of funds to be spent outside the church. These numbers are echoed by a similar study done by Christianity Today which confirmed that 75% of the budget of the churches they surveyed was spent on payroll, building upkeep, supplies, and denominational fees, while 25% was spent outside the church, and 16% of that was spent specifically on missions, which often take place far abroad, and also serve the primary purpose of conversion, not charity. That leaves only a paltry 9% of the budget available for local charitable acts preformed as community service and not as conversion exercises.
On the face of it we have a convincing case that charity and community service are most certainly NOT the primary concern of religious institutions. With only a questionable 25% of their budget going to charitable acts, it is obvious that a great many things take priority over the stomachs of the hungry or the treatment of the sick. But perhaps these kinds of organizations and efforts are just expensive to run, and such a budgetary arrangement is to be expected? Predictably, this is not the case. We need only look to the example of a true charitable organization to prove it.
The American Red Cross is just as large and far reaching, if not much larger, than any religious institution. Their work is wide spread, from the local level to the international level, needing the same kind of administration as church charitable efforts, and requiring similar expenses in travel and supplies So we should expect the budgets of these two charitable organizations to be at least roughly similar, if indeed churches were run as charitable non-profits that is.
The American Red Cross spends 92% of its total revenue directly on charity, spending only 8% of its budget on operating costs. It is obvious where the Red Cross’ priorities lie. We are forced to conclude that Churches are either grotesquely mismanaged, or that charity is further down their priority list than they’d like to admit.
It is clear that charity, community service, and honest non-profit work are not the primary functions of a church. At bare minimum we should expect a charitable organization to spend at least 51%, a simple majority, of its budget on charity, and almost no church meets even this low bar of consideration. When we compare the efforts of churches to that of a true charitable organization, the Red Cross, the presupposition that Churches are charitable is shown as a complete farce.
Please bear in mind: I have no problem with a church spending its money however it wishes. I have a big problem with granting them default tax exemption as a charitable organization. I know that the vast majority of small community churches are doing the best they can and don’t mean to be abusive of their tax exempt status. Being a Preacher is not a lucrative career, except for the few who weasel their way into the vital positions of large churches. However I contend that Churches ought to be made to file for non-profit status just like any other organization, and be held accountable to the same rules. The idea that we can trust churches to be generally charitable and dedicated to community service by sole merit of being a Church, is utter naivety. Churchs should have to prove it, demonstrate their charitable status, publish their financial information, refrain from partisan politics, and maintain a 501c3 status, just like everyone else.
After all, what exactly is a Church? A building covered with ornament and decoration of a particular theme, where groups of people show up every week and pay to sit in rows and watch a captivating performer tell them, more or less, exactly what they came to hear. That is not charity, that is theater, and it should be treated as such.