The Council for Secular Humanism has posted a most revealing analysis of church finances in the United States. It’s excellent — if only all our politicians would read and grasp it. Religion is a gigantic money pit.
First, the authors point out that the idea that churches deserve their money because they are non-profit charitable organizations is a myth. I wouldn’t donate money to an organization that was this wasteful.
Do religions engage in charitable work that addresses the physical needs of the poor? Many do, but that is not their primary focus. Religions are quick to trumpet when they do charitable work—ironically for Christians, since the Bible explicitly says not to (Mathew 6:2). But they don’t do as much charitable work as a lot of people think, and they spend a relatively small percentage of their overall revenue on such work. For instance, the Church of Jesus Christ of Latter-day Saints (the LDS or Mormon Church), which regularly trumpets its charitable donations, gave about $1 billion to charitable causes between 1985 and 2008. That may seem like a lot until you divide it by the twenty-three-year time span and realize this church is donating only about 0.7 percent of its annual income. Other religions are more charitable. For instance, the United Methodist Church allocated about 29 percent of its revenues to charitable causes in 2010 (about $62 million of $214 million received). One calculation of the resources expended by 271 U.S. congregations found that, on average, “operating expenses” totaled 71 percent of all the expenditures of religions, much of that going to pay ministers’ salaries. Financial contributions addressing the physical needs of the poor fall within the remaining 29 percent of expenditures. While these numbers may be higher as a percentage of income than typical charitable giving by corporations, they are not hugely higher (depending on the religion) and are substantially lower in absolute terms. Wal-Mart, for instance, gives about $1.75 billion in food aid to charities each year, or twenty-eight times all of the money allotted for charity by the United Methodist Church and almost double what the LDS Church has given in the last twenty-five years.
They also point out that the churches are incredibly poorly regulated — which is probably one of the reasons they are so popular among grasping frauds. They do give out a few unfortunate ideas, though.
What this means is that donations to religions are largely unregulated. In our discussions while investigating the subsidies to religion, we realized that religions would be the ideal way to launder money if you were engaged in an illegal enterprise. Hypothetically, the leader of a drug cartel could have one of his lieutenants start a church and file for tax-exempt status. Once granted, money from the sale of drugs could then be donated to the religion, which could use the funds to build extravagant buildings (including a “parsonage”), host extravagant “services” (a.k.a. parties) for members of the religion, and pay extravagant salaries to its ministers (including the leader of the cartel). Drug money could be laundered through the church’s bank accounts with little risk of being caught by authorities. If drug cartels and the Mafia aren’t already doing this, we’d be surprised.
Yeah, I wouldn’t be surprised, either. If you want to make money disappear, run it through a church — no one will ever question it or look deeper into it (except those damned atheists.)
But now, the big bottom line: exactly how much money is religion sucking out of our pockets for no purpose whatsoever?
More than $71 billion. To put that into context, the authors mention that US agricultural subsidies, which are huge, are about $180 billion.
They mention that if Florida, for instance had just revoked the property tax exemption for religions, it would have brought in a few billion dollars that would have prevented their recent major cuts in police and firefighting, and their slashing of the education budget.
Except, let’s get real here: removing the subsidies wouldn’t suddenly bring in piles of cash; instead, it would probably kill a lot of the parasitic churches.
If these subsidies were removed—though we have no basis for believing that they will be anytime soon—we wonder what the damage to religion would be. There is evidence that donations to religions are tied to taxes; as the tax benefit of donating goes up, so do donations and vice versa. In other words, it seems likely that the removal of these subsidies would result in a substantial decrease in the supply of religion in the United States. To what extent it would affect demand for religion is uncertain.
Let’s do the experiment and find out.
Yeah.
It’s been said many times before by many others, but it is as true now as it ever was: If I were capable of and prone to bald deceit and harm to others for self gain, I would be in the business of religion.
Money, power and respect for fucking nothing but lies and air – and extra, society protected trust for the fleecing.
That would be quite an interesting experiment! But given the situation in the U.S., I don’t think anyone is holding his breath.
Moreover, given the fact that France for example is regularly criticized as hostile to freedom of religion by the ONU and the US State departement for considering (and sometimes prosecuting) churches like any other secular organization (still with a tax-exampt status!), I can only imagine the outcry it would create in the U.S.
But tax exemption is outdated and the charity angle just a pretext…
Maybe Christianity should add one more command: “Thou shall pay taxes”.
I’m willing to accept a compromise position that churches simply have to open their books and prove there are no shenanigans, just like any other non-profit. I’m not even saying to put the onus on them to meet all the other qualifications of a non-profit; simply say, “Hey, if you want to avoid taxes, you have to make your books public so we can make sure you are actually doing what you say you are doing.” That’s it.
I have trouble seeing how even the most staunch religious apologist could oppose this. Ideally, of course, I’d like to see the religious tax exemption eliminated altogether, but we all know that is not even vaguely politically realistic. Instead, let’s simply say: Go ahead with your special treatment, you still get to claim non-profit status even if you don’t give a dime to the community… but just open your books so we can see that you aren’t cheating. That is all.
Remind me why we don’t make religious orgs comply with the same book keeping and financial reporting requirement all other charities are subject to?
It doesn’t look like the link in the orignal post is working…
It could be confirmation bias, but since I started reading Pharyngula, I saw this pattern emerges on various topics, the first church going into the “definitively not as good as advertised, quite the contrary” category, while the latter one goes into the “not so bad, comparatively” category.
I don’t have much of a point, just, I’m sadly not surprised.
Jamessweet
Really? Let me help you vizualise:
“Help! Help! I’m being oppressed. This is a Christian Nation. Fundamentalist Atheists want to destroy religion. First Amendment!!111!!111 “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” !!!111!!!!11Eleventy”
I think that churches should be treated just like any other business. Along with all of the taxes and paperwork. They can deduct their actual charitable works from their income, just like I can. And they can pay property taxes, just like I must.
Slightly off topic: can someone please explain to me the draw of tax-deductible donations? It always seemed to me that it cost me more money to reduce my tax payment than it would to actually pay the tax!
A very simple example:
I make $100,000 dollars and must pay 10% taxes on it, so $10,000.
So I make a donation of $10,000 dollars to charity, reducing my taxable income to $90,000, and my tax burden to $9,000.
Without the donation, I wind up with $90,000 of disposable income. WITH the donation, I only end up with $81,000!
So where’s the benefit (to me)?
Thar is gold in them thar delusions!
The streets of scam central are indeed paved with it!…
Humm, #3,
Redde Caesari quae sunt Caesaris?
Louis
I’m not surprised. The pastor at my parents’ church drives a Porsche.
With these figures maybe someone will finally take this to court and fight the tax exemptions on the obviously unconstitutional involvement with religion. The IRS gets to decide what a religion is which is unconstitutional. Now if churches were treated exactly like other non-profit organizations that would be fine- they would have to show they deserve non-profit status and have open books.
I’m also wondering how often the flock is coerced into making “donations”.
Anecdote: My grandmother made a donation before my christening (well, it was more like a casual chat about me with a thick blue envelope exchanging hands). I was christened right before First Communion, because my grandfather was an atheist heathen so grandmother had to wait until he died. Since my father is a heathen too, the priest was a bit… unhappy with me. To make him more agreeable, there was that (rather large, I think) donation. I’m pretty sure there was another donation before my Confirmation.
Well I am an ordained minister already…
Maybe I should look into starting a church.
jollywhalstrom
While the IRS can indeed be very powerful and strike terror in the hearts of individual taxpayers and can even occasionaly inconvenience large multinational corporations, it becomes a paper tiger when dealing with religious institutions.
May I remind you that Scientology is a tax exempt religion?
William Gibson explores this theme in his book Spook Country.
There is no need to go to the trouble of setting up a new church as there are a plethora of existing churches ready and willing to assist in such enterprises.
SCOTUS has had a say in defining religion for tax puposes. A lawyer can explain it better than me, but there are certain requirements that if met require it to be considered a religion. Having a con-man founder trying to scam the gvmn’t isn’t part of that test, IIRC.
@Thorne #9 So where’s the benefit (to me)?
That’s why it’s called charity.
I don’t think there is any expectation that the benefit accrues entirely to the giver.
In some jurisdictions with progressive tax rates, the reduction in your gross income may result in some or all of your income being taxed at a lower rate.
May I remind you that Scientology is a tax exempt religion?
Google “Operation Snow White” for the reason why.
SCOTUS has had a say in defining religion for tax purposes.
And Scientology is essentially America’s official religion, favored over all the others. Google “Sklar decision” for details.
I like jamessweets idea to open their books. If you’re in charge of policing (used broadly) people, this should be a fundamental requirement in a democracy. So far as Churches run hospitals, schools, adoption agencies <shudder>, women’s shelters, they are exercising police power over the people using those services.
The Catholic Church seems to have a general problem with money laundering.
If you are making a point, link to your point. [a href = “url of link”]description[/a], where [] are replaced by <>. When someone says for me to google something, I consider that no evidence has been presented.
I think that a lot of religious people — and even some that are not particularly religious — will remain unfazed by revelations regarding how little of their money goes to actual “charity” work. That’s because there’s a cultural assumption that having faith is good, endorsing faith is good, entrenching faith is good, and spreading faith is good. If you are not religious or at least “spiritual” — or trying hard to be either — then your life is mean, sad, and useless. Churches encouraging people to go to churches is therefore considered charity work, just on its own.
Before we can make any public headway in our protests against the exemptions churches get, I think we’re going to have to work harder at removing the faith-based blinders. Faith is not a virtue. Nor should it be fostered in self or others as a benevolent form of personal or group therapy.
… if Florida, for instance had just revoked the property tax exemption for religions, it would have brought in a few billion dollars that would have prevented their recent major cuts in police and firefighting, and their slashing of the education budget.
All of which assumes Gov. Rick Scott and the teabaggers running our sunny (and stormy, at the moment) state want adequate municipal services and public education, despite abundant evidence to the contrary.
We have as yet no reason to think they oppose factors which keep the public ignorant and docile.
I’d be interested in seeing the source of that 71% number.
I once found a site that tracked xian charitable giving, run by xians.
The number they used was more like 88% of all church intake is used internally for salaries, bills, and so on.
The “passthrough” 12% was sent up to the national organization, used for missionary activities, and for charity, much of which was missionary oriented.
This would leave charity work at somewhere around 5%.
The tax exemptions are much much more regulated: you can’t give a priest an extravagant salary, and more importantly, churches have to maintain separated accounting books for their religious and charitable activities, in order to avoid money explicitely given to charities being embezzled and put in the church coffers or the ministers’ pockets.
Undoubtedly some major ministries are just licences to print money. I sometimes play a fun game trying to decide which of the preachers I admired in my youth actually believed their own lies, and who were the out-and-out con men. It’s hard to tell.
Gene Simmons wants to turn Kiss into a religion for the tax breaks. And he knows a money-making scam when he sees one.
Church finances are usually murky. They aren’t required to disclose anything about their finances.
Wherever you have large flows of unaccounted money, you have people stealing some of it.
A lot of the churches are financially corrupt. We read about some megachurch pastor or fundie leader in trouble every week or so.
One of the most secretive is the Mormon church. They disclose about zero to even their members about what they do with their loot. I’m guessing that if there was ever an audit, it would be amusing to me and shocking to the 10% paying members.
@Q.E.D, #5
Because basically there aren’t any such requirements. If you get money from the government you have some very strict requirements, and the foundations (Ford, MacArthur, Gates, et al.) have their own requirements which usually start with government and go up from there. The IRS has their own set of rules which beyond filing a special tax return are pretty wimpy. Of course you can be audited and people are–as mentioned above the bogus charity is popular and loved.
The IRS also has rules for what is and isn’t a church and while there are endless debates about Scientology the requirements are designed to embrace all the mainstream churches and exclude the guy who invites his girlfriends over for mushrooms and an orgy and calls it “worship,” not to tell Baptists to do real charity work.
Here is the latest example of xian financial fraud. The Crouches are accused of siphoning off tens of millions of USD. They have 13 mansions, private jets, and a $100,000 doghouse.
I don’t have a problem with this. Money spent on fine wine and drugs, mansions, fast cars, jets and so on is money not spent attacking science or trying to overthrow the US government.
So for any fundies reading this. Check your bank balance. Send it all to the Trinity Broadcasting Network. They are doing jesus’es work and right now they need to pay a lot of lawyers.
Not surprised.
I’ve had to rely on charities/shelters for a good majority of my life. Overwhelmingly religious and horrid. Absolutely horrid for so very many reasons.
Ugh.
PZ,
I wish I lived in your simplistic world. I reject religion and all other forms of irrationality, but I am honest enough to admit that some of these churches, at the grassroots level, may be providing society support that is benign and, in some cases, valuable.
Your proposal wouldn’t dent the megachurches supported by Falwell and others of his ilk — you’d be killing off the local, struggling churches in poor communities.
But I guess there’s no reason to let facts get in the way of a good one-liner, eh, Dr. Scientist?
I’ve been in online discussion with people complaining about the total cost of the Large Hadron Collider, trying to point out that its budget is peanuts on an international scale.
Know what it cost? 7.5 billion US dollar, converted.
If the united US churches used a measly 5 percent of their annual federal subsidy to finding out how the world really works, they could almost finance such projects as the LHC, or compensate the coming budget cut of NASA.
May? May be valuable?
You’re okay with spending 71 billion dollars on something that may be valuable?
I don’t know about you, but I’d want to see a cost-benefit analysis at the very least.
Growing up in the mormon church I always thought it was a little weird that the donation slip had two additional categories above and beyond the 10 percent tithe; missionary fund and welfare fund. Apparently tithing may not have been used to help the poor (poor Mormons that is). My mom volunteered at a mormon foodbank called a “bishop’s storehouse” that only served mormons and my dad would volunteer at a “welfare farm” picking and sorting oranges on the occasional Saturday morning.
It seemed to me that the donations my family would make were spent mostly to build and maintain churches and temples as well as publishing Books of Mormon (go to any public library and you’ll notice they have stacks of them. They give them away like candy), lesson plans, and missionary tracts.
After spending two weeks in Bolivia on a BYU-sponsored trip, a friend of mine, shocked by the poverty in Bolivia,wondered why her tithing was not used to help the poor but for perhaps buying another chandelier for a temple.
I spent 16 months in Bolivia as a mormon missionary in the early 80’s. At the time we had a few women missionaries who were called “welfare missionaries” or as we liked to call them “welfaeries” who would teach nutrition and hygiene to only mormon bolivian women. So many of them complained that they hated their calling and really wanted to proselytize. After seeing all the illness and poverty there, I secretly wanted to trade places with them. Seeing to the bolivian’s “spiritual” needs left me remarkably empty. I still regret my reason for being there.
We really need to rethink the word “charity” and use it only to refer to helping the physical needs of the less fortunate.
Johannespaulsen, I think PZ was just arguing that all this money does not go to the needy in the poor communities, but stays firmly in the pockets of the clergy.
@ johannespaulsen
Communities that would be well served by having their lying, thieving, blood-sucking parasites excised.
The largest landowner in New York City is Trinity Church. They were given a bunch of land by the British monarch and continues to grasp for more and more property. They are also a huge real estate company, buying and selling land tax free. Meanwhile, there happens to be a huge homeless problem in that city but the church would rather prosecute veterans for stepping onto their empty lots.
In most countries the Government hands millions of dollars to the churches and charges them with the task of distributing it to the poor (it saves the Government the bother of getting too deeply involved in the details).
`
In most countries when the churches want money for charity work, they raise the money from the general public – church fetes, doorknock appeals, etc.
`
In most countries when money is willed to the church, or collected during services, all of it stays with the the church, and practically none of it is used for charitable works.
`
It would be interesting to compare figures:
* Donations to charity from the Government
* Donations to charity from the general public
* Donations to charity from church funds collected during services, etc.
I am unable to connect to the link, and when I googled Council for Secular Humanism, I was unable to connect to their main page. I hope it’s just an excess of traffic and not some kind of chicanery.
When someone says for me to google something, I consider that no evidence has been presented.
Your concern is noted.
@9 – don’t know if you’ve noticed, but anti-governmentism/supply side economics is now a religion. The ideology is always the best whether or not it gets results in the real world. So the benefit to any good church goer would be to starve the government.
@32 – frankly, I’d rather live in a society where the structures of governance provide a the minimum to each member of society so they can eat, have shelter, get educated, get health care, etc.
I have no interest in a society that refuses to provide for its people, but instead makes them grovel to people with impossible beliefs for sustenance and having to endure proselytizing for their daily meal.
But if you want to consider making your fellow man beg for sustenance, holding the aid giver in a position to grant or deny that at their whim, and mandating that we attempt to brainwash those down on their luck, well, that’s up to you.
@ Heliantus: The world is messy and full of nuance. Why wouldn’t you expect that some churches give a much higher percentage of their income away than others? Full disclosure: while I am a full-blown atheist, I still retain a “soft spot” for the United Methodist church, because it was the “tradition” in which I was brought up, and all of my extended family (these are people I love dearly, mind you!) are still very active in the Methodist Church. I have even given money to the church’s “Committee on Relief” (UMCOR) following the earthquakes in Haiti, Chile, and Japan – they donate 100% or those funds to the emergency need question, so despite my general distaste for religion in general, I felt like it was a good place to send the money. As with many others here, I couldn’t link to the article in question, but the comparison of total dollars donated by the UMC to the total $ donated by Wal-Mart seems a bit unfair. I’d really like to know what percentage of their profits Wal-Mart donates to charity – I guarantee it’s not anywhere close to 29%!
But I guess there’s no reason to let facts get in the way of a good one-liner, eh, johannespaulsen?
As is your failure to supply a link either in your initial post or in your response…Your lack of concern for evidence is noted….
Churches should get(or be refused) tax exemptions on the same grounds as a bunch of people getting together weekly to discuss Nietzsche. Same requirements, same oversight of fundraising and expenditures. Absent a scientifically accepted proof of God, the two things should be treated the same under the law, they are both philosophy clubs. The government drawing a distinction based on belief in God gets uncomfortably close to the establishment and free exercise clauses to me.
A good start would be to amend the Lobbying Disclosure Act of 1995 which exempts religious organizations from having to report how much they spend on lobbying. The Pew Forum has a report, “Lobbying for the Faithful” that conservatively estimates that religious organizations spend $350-400 million dollars a year on lobbying, with no requirement to disclose where or to whom the money goes.
Of course, this is all just wishful thinking. There are thousands of exemptions for religion from US laws, and, in America today, for a politician to suggest there is anything wrong with any of them is political suicide.
If you’d like to do something about this, sign my petition to get religions off the tax exempt rolls: http://signon.org/sign/will-mattsson?source=c.fwd&r. If enough folks respond, I can send the names to our state (CA) and fed. legislators. Should make quite a splash in the fundie-dominated House of Reps in Congress.
As is your failure
Note to self: buy more note cards.
How any one took that post and the link to the study as a “one liner” is fucking astounding to me.
Yeah, we would not want to press this valid issue and risk losing the high esteem in which we are held, because reform is not presently politically realistic. Better to not make waves, because if there is one thing that we can learn from our good friends on the opposite side of the aisles and pews, it is that public opinion can never be changed.
And thank goodness! Imagine what a depressing world it would be if, say, the Republican party actually thought they could promote whacky, politically unpopular ideas like millionaires should not pay a bit more in taxes than their secretaries, or that Social Security and Medicare are government handout programs; that it is in the country’s best interest to eliminate the Departments of Education and the Environment, that public schools should not receive Federal money, that it is better to lay off firemen and teachers rather than increase taxes; that government is inherently inefficient and is the problem, not the solution.
Yep – we definitely should wait to start moving the Overton window until some later time when we don’t have so much to lose and have a much better chance of prevailing.
Would that really be a reform?
Maybe I’m seeing things through my own country lens, but since we grant tax exemptions to every non lucrative organizations, should tax exemptions for churches be abolished, it would cause atheistic organizations to become privileged compared to religious organizations: it would be the same old system of privileges, excpet inverted.
I think it would be a combination of bringing in more tax money (or reducing the subsidy to religion) and kill off some of the less financially secure churches. No matter how that split goes, they are both good things. End the tax breaks and subsidies for religions!
@ #53
since we grant tax exemptions to every non lucrative organizations, should tax exemptions for churches be abolished, it would cause atheistic organizations to become privileged
You’re right that abolishing only church tax exemptions is not the right answer. The problem as it stands now, though, is that churches have many special privileges that equivalent secular organizations don’t enjoy. First, they are automatically qualified by virtue of being religious organizations, they are exempt from all sorts of rules and regulations, they are not subject to IRS reporting requirements that secular non-profits have to endure, and there is no accountability for where there money comes from or where it goes.
This article from the New York Times, “As Exemptions Grow, Religion Outweighs Regulation “, details some of the privileges that churches enjoy and the problems it causes for similar secular organizations. And it only scratches the surface. I’d be content if they were just forced on to a level playing field with everyone else.
The link QED provided @ 5–oh dear.
Tell me what’s wrong with this picture?’
Steal a few million for the untold billions the church has–go to jail. Rape hundreds of thousands of children–don’t go to jail.
Why does this fraudulent organization still have its tax exempt status again?
I wish I lived in your simplistic world. I reject religion and all other forms of irrationality, but I am honest enough to admit that some of these churches, at the grassroots level, may be providing society support that is benign and, in some cases, valuable.
I wish you lived in the real world, where crap like this goes on:
And that’s from 2003.
The San Antonio Food Bank does more in one day for its community than fat-ass Hagee will ever do for anyone in a lifetime, and I’d bet that the Food Bank’s entire staff doesn’t make $842,005 in compensation, never mind $414,485 in benefits, right now in 2012.
Imagine what they could do with $842,005. Imagine how many people they would help with it. I can guarantee you that it wouldn’t be just one fat-ass asshole living high on the hog in his mansion in the Dominion Country Club.
@dougittner
Trinity didn’t stop at prosecuting veterans, it even pushed the prosecution of a retired bishop of its own denomination who had joined in stepping into the empty lot (he was convicted).
On another note,
Some denominations are much more open about their books (for instance one apparently doesn’t have to guess about the Methodists but do have to guess about the Mormons).
Well, as I said, I see things through my own country lens, where rules and regulations for religious institutions are much stronger: religious organizations are’nt qualified to tax exemptions simply by virtue of proclaiming themselves “religious”; they have to follow the same rules and regulations than everyone else, plus some rules specifically tailored for them (every religious ceremony and preach is mandated by law to be fully open to everyone: It’s actually a very efficient way to keep fundies on a tight leash); accountings books are closely monitored and in fact, it only takes an executive order from the local prefecture to block and/or reverse donations.
*
My point was that, if the US problems come from too weak regulations of religious institutions, strengthening them is a much better solution than demanding the inversion of existing privileges.
It is ironic that this whole religious freedom crap is based on a phony foundation. The Pilgrims didn’t come here for religious freedom – they came to avoid persecution and persecute all other beliefs. Religious toleance in the Colonies was initiated by Roger Williams (read up on the history of Rhode Island).
Don’t forget that on top of all this, the fed gov’t is shovelling taxpayers money at churches for the “faith-based initiatives” in what has amounted to a baldfaced vote-buying scheme.
During the Bush administration they used to have a PDF listing where the money allegedly was going. $400mm to teach abstinence only sex ed, and then down to $250,000 here for a new church roof or $100,000 there to pave a church parking lot (to make them better for the community, don’t’cha know?) … It was a completely unregulated handout and probably unconstitutional, but the Obama administration continued it and in the spirit of the much-promised transparency stopped publishing anything about where the money was going.
With the American “no taxes without representation” slogan, wouldn’t taxing the churches give them the privilege of being involved in your politics?
Of course, they are already involved.
Y’know what’d be funny? What’d be funny would be to tack some “tax religion” clauses onto some of those “no sharia law” bills in various states and watch the local rubes pass ’em. That’d be a chuckle for sure!
When someone says for me to google something, I consider that no evidence has been presented.
An alternate view is that when someone tells you that they are suggesting that you do your own research. Of course, if intellectual laziness is more your style, you’re welcome to stay on the couch.
Exactly. They already lobby and tell their followers how to vote. Why keep giving them breaks when they don’t put anything back?
Ahem… nope.
I mean, yes, the US federal government is shovelling taxpayers money at churches in the form of “faith-based initiatives”, but it’s accounted for in the 71 billion subsidies.
So, it’s not “on top” of all this. It’s part of all this.
@9 Thorne:
Possible explanations:
1. Lots of people simply don’t make the calculation. They just think “tax deduction/credit” = good. Hard to believe, but true.
2. For the same reasons people buy something on sale that they wouldn’t buy otherwise. “It’s a sale.”
3. Because people often think of money in terms of distinct “pots”. So, for ex., one wants to give X dollars to charity anyways and the tax deduction/credit lets one do it at a discount.
(I have a “computer” pot of money from which I routinely spend sums of money that I would never spend on non-computer items, at least not without considerable angst. It all has the same source, of course, me, but it’s a different “pot” so I treat the expenditures differently. People are not, contrary to standard economic theory, rational actors.)
That slogan applies to individuals, not organizations. Corporations pay taxes; they don’t get to elect representatives.
[I love the sound of irony meters breaking in the morning.]
YES!
@9 Thorne, @67 lcaution:
Here are another couple of reasons:
4: The cost of the donation is much less than the amount it will be valued at. The classic example of this is artwork, with the donor giving away a valuable piece that for him is just so much stuff he has to store[1]. Another example is seen in that ‘Extreme Couponing’ show, where people end up buying large amounts of stuff for almost nothing[2], (or less than nothing to take advantage of a stupidity in how US supermarkets seem to be run[3]).
5: Scams where the ‘donated’ money largely finds its way back into the donor’s pocket.
And, of course, some people are actually using the credit in the way it is intended: To support charities by making the cost of donating a little less.
[1] This often happens with people who make an effort to support new artists. They end up with large amounts of art, some of which turns out to pieces be by $bigname that were purchased before anyone had ever heard of him.
[2] Or the guy who bought all that pudding for the airmiles, he donated most of it and made even more with the tax write off.
[3] Up here it’s: No store ever doubles coupons, you can’t drop a hundred copies of a coupon at once, coupons apply only to the regular price and if the coupon is for more than the price you don’t get the leftover.
Thorne #9; It’s more like a discount coupon; to tweak your example a little; if you make 100,000,you can go on about how you gave $10,000 to charity, thereby gaining significant (and valuable) PR, while only giving up $9,000 of real income.
It also allows the taxpayer to tweak their taxable income to squeak under the edge of a tax bracket. To edit your example slightly, imagine they are paying 10% tax up to $90,000, and 15% for annual income over that.
In this case, $100,000 gross income with no donations becomes $85,000. Conversely, after tax income on 100,000 with a $10,000 charitable donation is $82,000, all the while allowing them to claim that same $10,000 in PR value, which might improve the value of their advertising by 20 or 30 K, which is quite a bit of bang for their buck, considering it has a real cost to them of only $3000.
Add to this the fact that many “Charitable contributions” are in the form of unsaleable or obsolete product, which is written off at full retail value, and that real cost many well be negative.
Finally, many large organizations run their own charities; which ARE regulated, but may have side benefits to the donating organization. To pull a hypothetical example out of a hat, money that Budweiser puts into designated driver campaigns is money that might statistically make it easier for people to go out, get drunk, and do it again next week (fewer drunk-driving arrests, fewer people in court-mandated 12-step programs, etc) And of course fewer consequences in general mean it’s easier to drink more often.
Does this happen? Oh, yes. Does it mean tax-exempt charity isn’t a good idea? Well, small community organizations would certainly be harder to fund… It’s an open question.