Church $ State: Part 1 - The Public Subsidization of Religion

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Nothing converts faith to religion quicker than a perceived need for power or money.  Here on this glorious Easter Sunday, I want to talk about the impact of the latter of these--money--on religious institutions here in America, especially as it pertains to its relationship with the government.  You see, a "you scratch my back and I will scratch yours" relationship has existed between the church and Uncle Sam since the earliest days of America's history, one that seems to fly in the face of what Thomas Jefferson called the "wall of separation between church and state".  Be forewarned that the facts you will be exposed to in this two part series will likely result in a less than glorious feeling next time you are about to drop something in the offering plate or look at your paycheck to see how much taxes were taken out.

praying all the way to the bank

Most people are familiar with the old saying, "laughing all the way to the bank".  Well, I would argue that much of what is happening with both charitable donations and public subsidies to religious institutions could best be described as 'praying all the way to the bank'.  Now I'm not implying in this statement that those employed as clergy or staff in religious non-profits are just rolling in the Benjamins.  That certainly wasn't my experience during my seventeen plus years in vocational ministry!  Rather, the original expression is meant to communicate the idea of a person, organization or company earning a significant amount of money at far less cost to themselves than they are willing to admit or possibly for an ulterior purpose they do not want revealed.

tax breaks for religious congregations

The reality that the public subsidizes things is not controversial.  We subsidize basic infrastructure, public safety, museums and libraries, and the salaries of those who represent us in government just to name a few.  I am also not here to argue against the public subsidization of private organizations that partner in the delivery of common social services.  I personally feel there are allot of positive examples of public-private partnerships that are resourced in part by taxes collected at the local, state or federal level.  Many of these private organizations even have a religious identification.  What might be surprising to some is that we here in America publicly subsidize expressly religious organizations and activities.  This is done primarily through tax "expenditures" or what are more commonly referred to as tax 'breaks'.  According to the Government Accountability Office, "Many analysts consider tax expenditures to be federal spending channeled through the tax system..."  In a 2013 study done at the University of Tampa, the "low ball" estimate was that religious congregations benefit from these tax breaks to the tune of seventy-one billion dollars annually.  Beyond income tax, getting a pass on property taxes is the second largest money-saver for congregations.  One can only imagine how much property the Pope owns in the United States and how much funds is diverted as a result of these tax breaks from sharing in the cost of local municipalities.  Included in the seventy-one billion is 1.2 billion in subsidies for clergy parsonages, like the one vigorously defended by Pastor Rick Warren in his six year battle with the IRS.  When you add in the additional lost tax revenue due to people claiming their tithes and offerings to churches, mosques, temples and synagogues as "charitable donations", the actual figure is over eighty-three billion.  That means that congregations have received a 715 billion dollar tax break over the last ten years after adjusted for inflation.

However, public subsidization of religious organizations and activity is not limited to just tax breaks.  They also come in the form of grants.  This is especially true in higher education.  Conservative Christian colleges and universities are deeply concerned about the prospect of loosing significant public funding should Title IX of the Education Amendment of 1972 be more strictly enforced.  Currently many are granted exemptions, which allows them to legally discriminate in their admissions process based on religious grounds while the schools benefit from receiving Federal Pell Grants.  Now they want to ensure that they can continue to discriminate based upon their conservative views of sexual identity, even if a prospective gay or lesbian student affirms their general statement of faith and is seeking a non-ministerial liberal arts degree.  In expressing their fears over losing federal funding for their sectarian institutions, Dale Kemp of Wheaton College admitted that, "40 or 50 or maybe even 60 percent of their budgets are really coming from the federal government."  In my own backyard here in Northern California, William Jessup University is a recipient of this exemption, the end result being that 39% of their student body for the fall of 2016 received Pell grants.  According to Federal public records, the university took in a total of $2,102,801 in Pell grants during the 2015-2016 academic year so that they can, "In partnership with the church...educate transformational leaders for the glory of God."  No wonder the President of William Jessup, John Jackson, so vehemently opposed 2016's California Senate Bill 1146, legislation that would have resulted in the loss of a similar state grant had they not allowed gay and lesbian students to attend the school.  Of course the external messaging was that this opposition was motivated by the desire to preserve their student's "freedom of religion".  I believe we heard this line before in the 50's, 60's and 70's, a la Oral Roberts University.

private giving

Aside from these public subsidies, Americans give allot to their houses of worship.  In 2016 they gave over 122 billion dollars.  That's over double what Americans gave to education, the second highest category for private sector donations.  In the end, financial gifts to churches, mosques, etc. constitute 39% of all charitable giving.

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where does the $ go

So the obvious question that most people want to ask is, where does all this money go?  Well my forty plus years of church life coupled with my nearly two decades of service as a pastor and social ministry leader means that I probably know a thing or two about church budgets.  Beyond my own experiences and anecdotal recollections, there is a strong consensus in the 'industry' what big buckets most expenses fit into.  An article in the blog for the Pacific Northwest Conference of the United Methodist Church, citing a Christianity today study, broke down the most notable expenditures as such...

  • 50% - Personnel costs, including salary, benefits, and it should be noted about 4% for taxes
  • 22% - Property expenses including mortgage, insurance and utilities
  • 10% - Ministry expenses such as youth and children's programs
  • 5% - Missions to include supporting oversees missionaries

whats the r.o.i.?

After asking where the money goes, the next question people should ask is, "What are we getting for this investment?"  Well first of all, people shouldn't be automatically skeptical because the largest percentage of income goes to personnel.  That's pretty much always the case in every industry and as I said earlier the compensation is typically very meager.  But what is the outcome?  And does it justify a combined public and private annual investment of 205 billion dollars?  In terms of tax policy and public subsidies in the form of tax breaks and grants, the argument for continuing these is that houses of worship provide communities immense social benefits.  As an article by Focus on the Family states, "Churches and religious organizations, like other charities, provide a social benefit to society. They minister to the needy and poor in their communities, and they provide an influence on society that helps to reduce crime and encourage good citizenship."  Now obviously I would agree that "churches and religious organizations" benefit society.  There might also be some negative costs as well.  There were allot of so-called 'good church-going folk' in the era of Jim Crow and I have a feeling that black Americans in those parts might take issue with the 'social benefits' of the racist ideologies that were often reinforced from the pulpit. But that is a bit of a rabbit trail right now.  The question is, do the benefits at least add up to a 205 billion dollar investment?  Especially as it relates to public subsidization, I would also think that we should be asking how accessible to the general public are these benefits?  As we already discovered earlier, religious colleges and universities are very happy to take public funds but often do so while only allowing those who adhere to their religious beliefs and practices to benefit from this public investment.  Add to this the historic advantage that Christianity holds as the faith held by the majority of Americans, and how is this not a violation of the Establishment Clause of the First Amendment?

While this legal question is immensely important, I want to return to the outcomes.  The previously referenced Focus on the Family piece bases its thesis on, I would argue, very thin and dubious 'facts'.  For example, they talk about the money saved from preserving marriages through church counseling, but conveniently leave out that the divorce rate among conservative Christians is arguably the same if not higher than their atheistic or agnostic counterparts.  So let's just say that is a wash.  Is there 83 billion dollars worth of church staff and volunteer time, gift-in-kind, and programmatic expenses into ministering to "the needy and poor" in their neighborhoods and cities?  Let's just do a simple exercise to speed up the process, and this exercise comes in the form of a very legitimate dare.  I dare clergy and churchgoers to ask this question: When it comes to your church life, on what do you spend your time, talent and treasure?  I believe that an honest answer to that question for the vast majority of religious congregations will be that they spend nearly all of it on expressly religious services that almost exclusively benefit their members.  This is certainly my experience.  I often tell people that my disenchantment with vocational ministry came with the realization that most of my activity ended up being dedicated to providing religious goods and services to consumer Christians.

a closing though and intro to part 2

In closing, I have heard many times a question posed to churchgoers that is meant to challenge them to have a meaningful impact on their communities.  It goes like this: "If our church were to disappear tomorrow, would anyone who does not worship here notice?"  Again, for the majority of religious congregations out there I think that an honest answer to that would be, "Many if not most would not."

Now I'm not trying to demoralize those who attend a church, mosque, temple, or synagogue.  I suppose I do hope that a secondary byproduct for those who do read or listen to this piece is that they seriously reexamine their budgets.  But the main question I am trying to raise is this: It is both legally appropriate and pragmatically effective for congregations to be the recipient of such generous public subsidization?

In Part 2, we will return to look at examples of how the government gets their back scratched by the church.  I will then conclude with recommended policies that I actually think will benefit both faith and our broader society in the end. 

click here to go to part 2