Ship of Fools: Taxing Churches

Thread: Taxing Churches Board: Oblivion / Ship of Fools.

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Posted by Kaplan Corday (# 16119) on :

I spent yesterday evening participating in a long and wine-fuelled discussion/debate on whether or not churches should be taxed, the case for which is currently being pushed fairly enthusiastically by secularist groups.

Admittedly I have little expertise in administration, business and finance, but despite my Steve Langtonian nose for sniffing out Constantinian privilege for churches, I just cannot see what the case consists of.

Here in Australia, at any rate, churches are just one of a list of not-for-profit categories that includes charities, cultural organisations and sporting clubs, which do not have to pay tax.

Most churches these days seem to be incorporated, and therefore are obliged to provide financial statements which governments can check, so presumably their not-for-profit status is monitored.

Is the tax situation of churches radically different elsewhere?

What does the case for taxing them consist of?

Posted by mr cheesy (# 3330) on :

I think the problem is that some religious bodies are - to some extent - money-making exercises.

So thinking back in time, the Church owned a lot of land in England, rented it out to farmers and took a cut of the produce.

Of course, we don't tend to see most religious bodies today in that way because most in our experience are barely breaking even or losing money.

On the other hand, many churches have a lot of assets invested into immovable objects which they've amassed over many years. And we might want to say something about various sects and cults who seem to only want to collect money.

The issue then is that (a) these bodies are collecting untaxed monies in a way that other corporations cannot (or possibly should not!) and so it looks a bit unreasonable to have religious bodies which may be much larger than a local business paying nothing towards the coffers (b) these bodies are using government funds to some degree and not giving anything back (for example roads to get to the building) (c) that unscrupulous people might use the tax status to collect monies to get rich and perhaps (d) that having all those assets tied up in a religious organisation means that they're not being used in the economy and one might argue that taxing them might encourage them to circulate instead.

Of course, one can make various arguments against these points - not least that being a part of a religious body is something of a paraactivity for most members/observant followers, so the vast majority are economic actors in various other ways in society in addition to being part of the church. So, according to that argument, the church members have already paid their way with regard to the tax.

Posted by Sioni Sais (# 5713) on :

I have this rather vague libertarian notion that every pound, dollar or euro should be worth as much as every other one, and that if the government gives takes breaks to favour x, y and z, then that is immediately open to abuse.

One example is pension funds: I can't help thinking that a lot of the tax exemptions go to the comfort of fund directors, managers and shareholders and rather less to the current and future pensioners.

As far as churches are concerned, there will be some where the shepherds do very nicely at the expense of the flock.

Posted by Penny S (# 14768) on :

I do occasionally consider exactly what the business of a shepherd is. It's not for nothing the verb 'to fleece' has the secondary meaning it has. And the ultimate end of the sheep is not particularly beneficial to the sheep. Not to mention what happens to the male lambs.

It isn't a metaphor which takes kindly to deep thinking.

Posted by Gee D (# 13815) on :

quote:
Originally posted by Kaplan Corday:
Here in Australia, at any rate, churches are just one of a list of not-for-profit categories that includes charities, cultural organisations and sporting clubs, which do not have to pay tax.

Most churches these days seem to be incorporated, and therefore are obliged to provide financial statements which governments can check, so presumably their not-for-profit status is monitored.

Is the tax situation of churches radically different elsewhere?

What does the case for taxing them consist of?

It's not due to any incorporation, but rather that all bodies which are charities or not-for-profit are required to submit full accounts annually to the Aust. Charities and Not-for Profit Commission - ACNC. Quite what the ACNC achieves in improving the governance of those covered has never been made clear, but I can tell you that completing the annual return is not something to fill in an hour or so on a wet Saturday afternoon.

Incorporation is usual as it allows for people coming and going from church membership, continuity of land title etc. The larger mainstream churches - even including the Baptists, which I had always thought of as having a congregational basis rather than a larger body - are incorporated by State legislation.

Should your second child's soccer club be required to pay tax on any profits it makes from the Saturday morning street stall it always holds on the long weekend in June? If not, why not.

Posted by mr cheesy (# 3330) on :

Is a membership organisation like a golf club morally different to a religious membership organisation?

If not, shouldn't they both be taxed the same?

Posted by Kaplan Corday (# 16119) on :

quote:
Originally posted by Gee D:
The larger mainstream churches - even including the Baptists, which I had always thought of as having a congregational basis rather than a larger body - are incorporated by State legislation.

Even Brethren assemblies are incorporated these days.

I understood it as a safeguard in cases of litigation.

Posted by Kaplan Corday (# 16119) on :

quote:
Originally posted by mr cheesy:
(a) these bodies are collecting untaxed monies in a way that other corporations cannot (or possibly should not!) and so it looks a bit unreasonable to have religious bodies which may be much larger than a local business paying nothing towards the coffers (b) these bodies are using government funds to some degree and not giving anything back (for example roads to get to the building)

Aren't these points equally true of other not-for-profit organisations such as cultural and sporting clubs?

quote:
(c) that unscrupulous people might use the tax status to collect monies to get rich and perhaps

But some overpaid dodgy faith-healer or tele-evangelist still has to pay tax on their personal income, don't they, even if it comes voluntarily from gullible (as we might categorise them) supporters?

quote:
(d) that having all those assets tied up in a religious organisation means that they're not being used in the economy and one might argue that taxing them might encourage them to circulate instead.

Isn't this, too, equally true of non-religious not-for-profit organisations?

Posted by Beeswax Altar (# 11644) on :

quote:
originally posted by Sioni Sais:
As far as churches are concerned, there will be some where the shepherds do very nicely at the expense of the flock.

And that's an argument for taxation how? Government officials both elected and unelected are doing quite nicely at the expense of the governed. A person giving money to a church who is unhappy with how the money is used can stop giving money to that church whenever they choose. One doesn't have that option with money taken by the government.

Posted by Brenda Clough (# 18061) on :

At least in the US, the IRS is fairly jaundiced about churches. If you declare yourself a Prophet and set up a religion in your house tomorrow, they will not let you declare your property exempt from taxes. If you set up a non-profit there are things you have to do, like actual charity, before they'll believe you. You might get away with chicanery for a while but the IRS will get you in the end.

Posted by Sioni Sais (# 5713) on :

quote:
Originally posted by Beeswax Altar:

quote:
originally posted by Sioni Sais:
As far as churches are concerned, there will be some where the shepherds do very nicely at the expense of the flock.
And that's an argument for taxation how? Government officials both elected and unelected are doing quite nicely at the expense of the governed. A person giving money to a church who is unhappy with how the money is used can stop giving money to that church whenever they choose. One doesn't have that option with money taken by the government.

You have any number of options, starting with voting to elect a different government to standing for the presidency.

Posted by Beeswax Altar (# 11644) on :

Meet the new boss same as the old boss.

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by Beeswax Altar:
A person giving money to a church who is unhappy with how the money is used can stop giving money to that church whenever they choose.

Many do just that. However nearly all churches have the guilt factor built in and many push it further. When you are talking religion, you are not talking freedom of choice in a complete and unbiased manner.

quote:

One doesn't have that option with money taken by the government.

Actually, you do. Both in the simplistic stop paying and take the consequences and the more sophisticated strategy of politics. With the latter, you will still pay something, but you have some control.

quote:
Originally posted by Beeswax Altar:
Meet the new boss same as the old boss.

This is a cop out and very much what politicians love and expect.

quote:
Originally posted by Brenda Clough:
At least in the US, the IRS is fairly jaundiced about churches.

Yeah, but no.
But even without this egregious example, very few, if any, large churches meet Jesus' exhortations against wealth.

[ 21. September 2016, 15:44: Message edited by: lilBuddha ]

Posted by no prophet's flag is set so... (# 15560) on :

Churches here are taxed on the portion of income not church related, e.g., if they rent the church hall to a wedding reception or for a community group. The community group may claim a tax exemption if charitable for any tax paid, and the church gets a wee bit back from the tax they charge in lieu of doing to administration to charge and submit the tax.

Posted by Beeswax Altar (# 11644) on :

quote:
originally posted by lilBuddha:
Many do just that. However nearly all churches have the guilt factor built in and many push it further. When you are talking religion, you are not talking freedom of choice in a complete and unbiased manner.

Guilt is not prison. As you say, many stop giving to church. Let's assume that a large number of people give to the church out of guilt. How will taxing churches change that? Won't parishioners just feel obligated to give more money to offset the loss to taxation?

quote:
originally posted by lilBuddha:
Actually, you do. Both in the simplistic stop paying and take the consequences and the more sophisticated strategy of politics. With the latter, you will still pay something, but you have some control.

Now, we are talking prison.

quote:
originally posted by lilBuddha:
This is a cop out and very much what politicians love and expect.

It's also the truth. Even politicians who aren't so corrupt they run afoul of the law still personally benefit from their time in government even after leaving it and they do so at the expense of the governed. Luke 6:1-13 comes to mind. In addition to elected officials and their political appointees, the government also includes seemingly countless agencies staffed with career bureaucrats who keep their job regardless of whose political appointees are running the department. They too live nicely at the expense of the governed.

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by Beeswax Altar:

quote:
originally posted by lilBuddha:
Many do just that. However nearly all churches have the guilt factor built in and many push it further. When you are talking religion, you are not talking freedom of choice in a complete and unbiased manner.
Guilt is not prison. As you say, many stop giving to church. Let's assume that a large number of people give to the church out of guilt. How will taxing churches change that? Won't parishioners just feel obligated to give more money to offset the loss to taxation?

Nice goalpost shift, but my comment was about church donations not being as easy to avoid as you seem to claim.

Regarding not getting involved, if you don't make an effort, you will not change things. Never said trying would be an easy thing.
AS to public sector employees. That is a more complex issue and not a suitable tangent for this thread.

Posted by Beeswax Altar (# 11644) on :

It's quite easy to stop giving money to churches. You just stop. Guilt doesn't work on as many people as you think and just about every nonprofit organization uses some degree of guilt to raise money. You said many stop giving money to churches. So what's the problem? How does taxing churches fix that problem?

Posted by Crœsos (# 238) on :

quote:
Originally posted by no prophet's flag is set so...:
Churches here are taxed on the portion of income not church related, e.g., if they rent the church hall to a wedding reception or for a community group. The community group may claim a tax exemption if charitable for any tax paid, and the church gets a wee bit back from the tax they charge in lieu of doing to administration to charge and submit the tax.

There's also the question of property tax. Properties owned by churches are generally exempt from property tax (in the U.S.), which is not true of all non-profits. There was a recent case of a Greek Orthodox "Church" losing its tax exempt status because it only meets one week a year to sell souvlaki at Canal Fest.

quote:
“I don’t think the public wants them necessarily to not be at Canal Fest,” [City Assessor Judy M. Tafelski] said. “The public loves their souvlaki. Not a problem. They just don’t think they should be tax-exempt in order to make their $70,000 to $100,000 for the week. I think that’s where most of the people are coming from.”

Posted by SvitlanaV2 (# 16967) on :

From a British point of view the idea that a significant number of people feel unable to stop attending or funding churches that they hate is a bit peculiar, really.

Also, I think many British churches would simply be driven to close if they had to pay tax on top of everything else. This could be a blessing in disguise for some of them.

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by Beeswax Altar:
It's quite easy to stop giving money to churches. You just stop. Guilt doesn't work on as many people as you think

Most of modern psychology disagrees with you. Believe what you want.

quote:

and just about every nonprofit organization uses some degree of guilt to raise money. You said many stop giving money to churches. So what's the problem?

I was acknowledging that some people do, it does not negate the point about guilt.

quote:

How does taxing churches fix that problem?

Didn't say it did. Just arguing the contention that stopping tithing is not as simple as you state.

Posted by Enoch (# 14322) on :

As a matter of curiosity, what problem would taxing churches, or for that matter the rest of the charitable sector, actually solve, apart, I suppose, from making Professor Dawkins happy?

Posted by OddJob (# 17591) on :

So far the discussion has only covered direct tax and not mentioned indirect tax, or Value Added Tax as it’s known on this side of the pond, payable on most purchases (except for most food, books, newspapers, etc). Churches are required to pay VAT on purchases, which is not even partially recoverable from VAT levied on sales (even on fee-charging activities such as organist’s fees and funeral/wedding fees). So no special treatment exists there.

We are exempt from property taxes (Business Rates on non-domestic buildings and (I think) Council Tax on clergy houses), which I find harder to justify. There again, Business Rates on a church would be a large burden, even after allowing the normal 80% discount for charities.

Income/corporation tax exemption is less of a privilege than the detractors like to suggest. After all, how many churches make an operating surplus, if diocesan subsidies are ignored? Even the profitable ones are barely so, and could disguise an operating surplus by increasing donations at the end of tax year.

Posted by SvitlanaV2 (# 16967) on :

Enoch

Well, perhaps the implication in a few posts above is that taxing churches would help to liberate vulnerable people from their psychological grip. It would only do so if the churches were taxed so heavily they had to close (although the most manipulative church leaders might be able to convince their members to increase their offerings instead).

In the British context, as I said, it would finish off swathes of smallish churches. The Methodists are already closing more than anyone else, and some church leaders think the process needs to speed up; a church tax would play nicely into their hands. I suppose it would also suit keen ecumenicalists who'd welcome the encouragement for lots of small congregations to merge (and hence save money).

It might also spark off more risk-taking in terms of church formation and structure. A more organic, less official structure might suit some groups, and now there'd be a financial imperative to go down that route.

However, I don't know how our politicians could get away with taxing the established church. That would make no sense. The CofE would surely have to be disestablished first - and of course there are people on all sides who'd appreciate that.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by lilBuddha:

quote:
Originally posted by Brenda Clough:
At least in the US, the IRS is fairly jaundiced about churches.
Yeah, but no.
But even without this egregious example, very few, if any, large churches meet Jesus' exhortations against wealth.

That's a gross exaggeration. The aptly named Creflo Dollar may or may not represent most televangelists, he definitely does not represent large churches, most of which are not on television and have very similar struggles to small churches. There are some differences, of course, mostly related to the economies of scale, but not as many as one would think. The real difference is between growing churches (of any size), which enjoy the advantages of adding staff & programs, and declining churches (of any size), which suffer the very real pain of needing to cut staff & programs. But in general large churches are no more or less likely to have programs to aid the poor or marginalized and no more or less apt to pay lavish salaries or build extravagant edifices than small churches.

Posted by Alan Cresswell (# 31) on :

quote:
Originally posted by OddJob:

We are exempt from property taxes (Business Rates on non-domestic buildings and (I think) Council Tax on clergy houses), which I find harder to justify.

Our church pays council tax for the ministers house. Well, a share of it since she is married (her husbands church pays half the council tax, the two churches she ministers to pays the other half between us). But, nothing on the church building itself.

Posted by fletcher christian (# 13919) on :

I guess it is radically different in different places around the world, but where I am the church does't pay tax on money donated. It does however pay tax on any investments, on property, on savings etc and it does pay tax in terms of water and bin charges and stuff like that. Basically it amounts to a tax credit on its current account. I imagined that this is what most places did, perhaps with a tax break on savings and investments in some places, but maybe I'm wrong and it's much more than that.

I guess it comes down to whether you see a religious organisation as charitable. There are both cultural and social advantages to having a religious community in your area and even if you are secular you are still going to benefit from that without necessarily having to buy into it. Only a secular fundamentalist - of which there seem to be a growing vocal number these days - will object. Even these two advantages aside, the amount of charitable work and support that goes on through a church can be pretty mind blowing. Churches are often extremely poor at blowing their own trumpet in this regard, and many just don't want to do that. Considering that most of this work is done on an entirely voluntary basis, the church essentially provides an enormous amount of charitable work and support on a budget that is considerably less than a charity today that spends enormous sums on fancy central offices and administration. I think there is a very easy case to be made for allowing churches (and other religious communities) to get some manner of tax break.

Posted by american piskie (# 593) on :

quote:
Originally posted by OddJob:

We are exempt from property taxes (Business Rates on non-domestic buildings and (I think) Council Tax on clergy houses), which I find harder to justify. There again, Business Rates on a church would be a large burden, even after allowing the normal 80% discount for charities.

I think the position is that a Minister of Religion is not charged Council Tax on the property occupied in that capacity, but that the charge falls instead on the landlord---in the C of E that will usually be the Diocese (for the parsonage house) or Diocesan Trustees (for houses "owned" by PCCs). In the latter case the PCC has to reimburse the Trustees if it doesn't pay directly, in the former I think it's rolled up in the clergy costs.

Posted by Baptist Trainfan (# 15128) on :

The advantage for both clergy and Church in doing it this way is that the Council Tax is not paid out of the minister's taxed income. So, for instance, the church pays £2000 Council Tax ... for most people that would equate to about £2500 of earned income. (The same applies to water bills as historically these too were "rates", however electricity and gas come under a different way of working).

Posted by Albertus (# 13356) on :

Yes. And actually, although I know it's not the practice in the ordinary rented sector, there's a good argument that it's right in principle that a property tax should be paid by the owner of the property, who has the longer-term benefit of the asset, rather than the person who happens to be occupying it at the time, especially where it is effectively tied accommodation.

Posted by Baptist Trainfan (# 15128) on :

But one could also argue that it is the people who live in the property who benefit from at least some of the services provided such as rubbish collection. On the other street lighting and education benefit the entire community.

Posted by Steve Langton (# 17601) on :

Thanks - I think - for the nod in my direction in your intro/OP Kaplan.

AIUI, originally in a society which didn't have the modern array of other charities and clubs, the Church was tax exempt precisely because it was the national church, whether in a narrow sense like the Anglicans or as part of a broader supra-national body like the RCC. Once nonconformity was allowed, that status was rather unthinkingly extended.

Overall I tend to the view that ideally churches should not be tax-exempt, except maybe in a 'Gift Aid' kind of way where they are doing things clearly for others rather than themselves. I have similar views about private schools, many of which these days are rather stretching the idea of 'not-for-profit'.

Posted by mr cheesy (# 3330) on :

quote:
Originally posted by Steve Langton:
Thanks - I think - for the nod in my direction in your intro/OP Kaplan.

AIUI, originally in a society which didn't have the modern array of other charities and clubs, the Church was tax exempt precisely because it was the national church, whether in a narrow sense like the Anglicans or as part of a broader supra-national body like the RCC. Once nonconformity was allowed, that status was rather unthinkingly extended.

Oh.my.goodness

*facepalm*

Posted by Baptist Trainfan (# 15128) on :

quote:
Originally posted by Steve Langton:
Overall I tend to the view that ideally churches should not be tax-exempt, except maybe in a 'Gift Aid' kind of way where they are doing things clearly for others rather than themselves. I have similar views about private schools, many of which these days are rather stretching the idea of 'not-for-profit'.

I think you'll find that the Charity Commission largely agrees with you - which is why, in our Annual Report, we have to emphasise the ways in which we fulfil our Charitable Objectives; and why private schools which only educate their own children without providing any broader service to the community are on somewhat sticky ground. As a recent House of Commons Briefing Paper states, "The advancement of education is a charitable purpose and so independent schools are capable of being charities. There is no longer a presumption that any type of charity is for the public benefit. Educational charities, like all other charities, must demonstrate that they are for the public benefit."

Posted by Albertus (# 13356) on :

quote:
Originally posted by Baptist Trainfan:
But one could also argue that it is the people who live in the property who benefit from at least some of the services provided such as rubbish collection. On the other street lighting and education benefit the entire community.

Yes, sure. That I think is the problem of having a tax on property rather than on residence. But that's a tangent.

Posted by Sipech (# 16870) on :

I think some clarity is needed here over precisely which taxes we're talking about, as the discussion seems to be quite ambiguous.

I wouldn't be averse to seeing a lift on the exemption from corporation tax. i.e. treat a church as though it were a business, because if is genuinely not-for-profit then there'll be no profits generated to tax in the first place. I'm very suspicious of churches that have a track record of making a profit in the annual accounts.

If it's business rates (the commercial equivalent of council tax), if the church receives the same benefits as everyone else, why not pay the same as everyone else?

If we want to get theological about it, 1 Timothy 3 says that leaders must be above reproach. If the church is seen (or even perceived) to be getting favourable treatment then it seems obvious that it damages the credibility of the church.

Posted by mr cheesy (# 3330) on :

quote:
Originally posted by Sipech:
I think some clarity is needed here over precisely which taxes we're talking about, as the discussion seems to be quite ambiguous.

I wouldn't be averse to seeing a lift on the exemption from corporation tax. i.e. treat a church as though it were a business, because if is genuinely not-for-profit then there'll be no profits generated to tax in the first place. I'm very suspicious of churches that have a track record of making a profit in the annual accounts.

I'm not an accountant, but surely one would have to declare bought assets in the profit/loss account. If one kept on making a surplus and using that surplus to buy things, then one would be adding to the profit column, no?

The alternative seems to be that the church holds no significant material assets, that buildings and moveable objects are always held as a debt or mortgage and that the church never has enough surplus to buy the tat they want outright. When does that ever happen?

quote:
If it's business rates (the commercial equivalent of council tax), if the church receives the same benefits as everyone else, why not pay the same as everyone else?

I guess most of the time it is hard to see a church as a trading entity. Any money it has is (almost always) as a result of donations.

quote:
If we want to get theological about it, 1 Timothy 3 says that leaders must be above reproach. If the church is seen (or even perceived) to be getting favourable treatment then it seems obvious that it damages the credibility of the church.

Practically speaking, that's an impossible standard. Why are we comparing religious bodies to corporations anyway, surely a better measure is against a charitable body or NGO.

Posted by Sipech (# 16870) on :

quote:
Originally posted by mr cheesy:
I'm not an accountant, but surely one would have to declare bought assets in the profit/loss account.

I am a chartered accountant and the idea of adding your assets on the P&L is absurd!

Capital expenditure is debited to the balance sheet and depreciated over the useful economic life of the asset.

quote:
If one kept on making a surplus and using that surplus to buy things, then one would be adding to the profit column, no?

No, because you depreciate the assets as you use them. Depreciation is a non-cash expense. You can generate a positive operating cash flow without generating profits.

quote:
The alternative seems to be that the church holds no significant material assets

That might strike a cord with some New Testament teaching. I was a part of a church that did sell all its assets and gave the proceeds to the poor. They now meet in a function room of a hotel.

quote:
I guess most of the time it is hard to see a church as a trading entity. Any money it has is (almost always) as a result of donations.

Often, but not always. Quite a few churches have a commercial arm to them (e.g. bookshop, cafe) and some of the larger ones have investments. One of the big shareholders in my company is the Church of England; the dividends from my company goes someway towards paying the pensions of a retired vicars.

Posted by mr cheesy (# 3330) on :

OK so what's the economic life of a stained glass window?

I'm obviously a lot less knowledgeable than you on this so am interested to hear. If I've bought a car for business use, then it depreciates, I understand that. But does a stained glass window? In what sense is that depreciating?

Posted by Beeswax Altar (# 11644) on :

quote:
originally posted by Sipech:
I wouldn't be averse to seeing a lift on the exemption from corporation tax. i.e. treat a church as though it were a business, because if is genuinely not-for-profit then there'll be no profits generated to tax in the first place. I'm very suspicious of churches that have a track record of making a profit in the annual accounts.

Churches like all nonprofits can have endowments. No church makes a profit. We ask for pledges and then make a budget based on what we receive and other sources of income we might have. On the off chance that we end up with a surplus at the end of the year, it is either saved, spent, or carried over to next year. No profit is distributed.

Posted by Stercus Tauri (# 16668) on :

quote:
Originally posted by Beeswax Altar:
Churches like all nonprofits can have endowments. No church makes a profit. We ask for pledges and then make a budget based on what we receive and other sources of income we might have. On the off chance that we end up with a surplus at the end of the year, it is either saved, spent, or carried over to next year. No profit is distributed.

That's an important distinction that sometimes needs to be better understood. There's a world of difference between a profit and a surplus, as was beaten into me by a church treasurer many years ago. He told us never to use the word 'profit' in any church documentation.

As to the basic issue here, the churches are often a base for otherwise unfunded and unpaid community service such as operating the food bank, hospital visiting, aid to remote communities and so on. When I give to one of these activities through the church I don't want to see any of it siphoned off for buying F35 fighters, bribes to foreign governments or politicians' beer money. I do that with all the other taxes I pay.

Posted by Net Spinster (# 16058) on :

From the US point of view one big advantage religious groups have over other non-profits is that they are not required to file a 990 (a tax form which has to be public which lists income, expenditures, salaries of the 5 best compensated employees, etc.). This has allowed some religious organizations to hide a lot of income and how they spend it.

Another is that in all US states (except one) religious organizations are exempt from unemployment insurance taxes and many choose not to opt in [in some cases they can't] or provide unemployment insurance by some other means. Their employees frequently don't realize this until they are laid off and find they aren't eligible for unemployment compensation. Some churches are quite upset that Oregon does not exempt churches.

The ministerial housing deduction is also a benefit that does not apply to employees of other types of non-profits.

Posted by Baptist Trainfan (# 15128) on :

quote:
Originally posted by Sipech:
Quite a few churches have a commercial arm to them (e.g. bookshop, cafe) and some of the larger ones have investments.

I can't speak about investments, though many charities have them. But I'm sure that if a church runs a proper café or a bookshop (i.e. more than "coffee in the church hall each week" or "a table at the back of the church") then that has to become a stand-alone business and behave accordingly. Of course it can be one whose profits all go to the church.

Posted by Enoch (# 14322) on :

quote:
Originally posted by Baptist Trainfan:
I can't speak about investments, though many charities have them. But I'm sure that if a church runs a proper café or a bookshop (i.e. more than "coffee in the church hall each week" or "a table at the back of the church") then that has to become a stand-alone business and behave accordingly. Of course it can be one whose profits all go to the church.

Exactly. Any charity, not just a church, can only do things that are within its objects. Doing anything outside its object is unlawful, outside its ability to do. The technical term is ultra vires.

If it wants to do something else, and especially if that involves running a business, or incurring a commercial risk, it has to set up a wholly owned company, which is not a charity, to do it. Not being a charity, the company is governed by ordinary company law and ordinary tax law. The company then obliges itself to donate any profit/surplus it makes as a charitable donation to the charity that owns it.

This is not some sort of ruse or fiddle. The Charity Commission gives advice on how to do this.

Posted by mr cheesy (# 3330) on :

Someone who knows help me to understand: a corporation that buys a famous artwork to hang on the wall. That's an asset, but it isn't directly being used by the business - so how is it dealt with for tax?

Posted by Brenda Clough (# 18061) on :

How is it not being used for the business? It is adding to the luxe and profitable ambiance of Trump Tower, just like the gilt handrails and faux marbling and swag draperies. Unless it's hanging in the CEO's private restroom, and even then it could be argued that he needs all the egoboo he can get so that he is encouraged to improve the stock returns. The only way you could make this fly is if it is hung in someplace not related to the business at all.

Posted by ExclamationMark (# 14715) on :

quote:
Originally posted by SvitlanaV2:
From a British point of view the idea that a significant number of people feel unable to stop attending or funding churches that they hate is a bit peculiar, really.

Also, I think many British churches would simply be driven to close if they had to pay tax on top of everything else. This could be a blessing in disguise for some of them.

Churches have to prov e "public benefit" if they claim to be a charity. One of those public benefits is work in the community - if a church can prove this through its work an activity and mission, then it could counter any demand for tax on profits with a claim for "hours provided in kind." In the UK the current notional figure for hours in kind - allowable as a claim by grant making bodies - is bout £13.50.

Stands to reason that if a church is raking it in without giving it back then it should be classed as a financial concern. If it's focus is on missional activity and giving then tax burdens should be mitigated. We don't really need churches with large incomes and big endowments doing nothing: if you can't or won't do it, give the money to someone else who can.

Posted by Baptist Trainfan (# 15128) on :

This report from the "Cinnamon Network" attempts to quantify the value of community benefit being provided by faith groups. See p.5 especially for details.

As the Executive Summery suggests, this is quite possibly only a small part of a much larger picture.

[ 23. September 2016, 15:51: Message edited by: Baptist Trainfan ]

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by cliffdweller:

quote:
Originally posted by lilBuddha:

quote:
Originally posted by Brenda Clough:
At least in the US, the IRS is fairly jaundiced about churches.
Yeah, but no.
But even without this egregious example, very few, if any, large churches meet Jesus' exhortations against wealth.
That's a gross exaggeration.

More of an over-simplification than a gross exaggeration. And it was a simple criticism to a complex issue.
There are many legitimate expenses to running a large organisation that result in a lower percentage of resource devoted to those who need. The trade-off is that economies of scale mean that larger net amounts are available.
The problem comes from how that infrastructure is managed. Limousines and large residences are not limited to televangelists. Comfort is not a requirement.
It is in the balance that many churches get it wrong. Or perhaps not quite as right as they could.

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by mr cheesy:
OK so what's the economic life of a stained glass window?

I'm obviously a lot less knowledgeable than you on this so am interested to hear. If I've bought a car for business use, then it depreciates, I understand that. But does a stained glass window? In what sense is that depreciating?

Evey building and every part of that building have a limited lifespan without maintenance. So the simplest bit of this is how long will that stained glass window maintain its integrity without repair/preventative maintenance.
And after that, what will that repair cost? How often will it be needed.
Buildings, generally, have a longer lifespan than a vehicle, but both need upkeep as they age. The advantage a building has is that real estate typically appreciated over time, even with use.

Posted by SvitlanaV2 (# 16967) on :

quote:
Originally posted by ExclamationMark:

quote:
Originally posted by SvitlanaV2:
From a British point of view the idea that a significant number of people feel unable to stop attending or funding churches that they hate is a bit peculiar, really.

Also, I think many British churches would simply be driven to close if they had to pay tax on top of everything else. This could be a blessing in disguise for some of them.
Churches have to prov e "public benefit" if they claim to be a charity. One of those public benefits is work in the community - if a church can prove this through its work an activity and mission, then it could counter any demand for tax on profits with a claim for "hours provided in kind." In the UK the current notional figure for hours in kind - allowable as a claim by grant making bodies - is bout £13.50.

Stands to reason that if a church is raking it in without giving it back then it should be classed as a financial concern. If it's focus is on missional activity and giving then tax burdens should be mitigated. We don't really need churches with large incomes and big endowments doing nothing: if you can't or won't do it, give the money to someone else who can.

I wonder exactly how 'public benefit' is quantified. The minimum requirements can't be all that financially or physically demanding, or else how would a hard-up congregation of ten elderly people in a country village be able to meet them? That being the case, why would a wealthy church not fulfill the requirements?

Moreover, I find it hard to imagine that many church these days can grow 'wealthy' without doing anything for anybody. Legacies and generous offerings are given for a reason. Grateful former or current members expect their churches to use the money they're giving for maintenance and general goods works, and a church whose sense of mission is weak is unlikely to attract very generous gifts of money, ISTM.

Some churches also manage to raise a lot of money letting out their property. I do think it would be unfair to penalise them for doing this, since I'm sure that in the vast majority of cases the income helps them hugely with maintenance and mission.

Posted by Baptist Trainfan (# 15128) on :

quote:
Originally posted by SvitlanaV2:
A church whose sense of mission is weak is unlikely to attract very generous gifts of money, ISTM.

You'd be surprised. Sometimes people leave quite large sums because of past family ties or because they like the building.

quote:
Some churches also manage to raise a lot of money letting out their property. I do think it would be unfair to penalise them for doing this, since I'm sure that in the vast majority of cases the income helps them hugely.

And it may also be a "public benefit" if they're the only such facility in the area.

[ 23. September 2016, 21:45: Message edited by: Baptist Trainfan ]

Posted by SvitlanaV2 (# 16967) on :

Strong family ties to a particular church surely suggest a close-knit community with a stable sense of identity. It's a shame for a church to enjoy that kind of benign environment and yet have nothing to offer.

As for beautiful and/or historical church buildings, some say the state and other bodies should actually be funding their maintenance, not taxing them. The National Trust would be vociferous in arguing that these churches needed more financial support, not less.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by SvitlanaV2:
Strong family ties to a particular church surely suggest a close-knit community with a stable sense of identity. It's a shame for a church to enjoy that kind of benign environment and yet have nothing to offer.

As for beautiful and/or historical church buildings, some say the state and other bodies should actually be funding their maintenance, not taxing them. The National Trust would be vociferous in arguing that these churches needed more financial support, not less.

This is much, much less of an issue in the US, particularly the West Coast, then it is in the UK. The closest thing we have in California is our historic missions, almost all of which have been decommissioned and now are state parks or museums, with no religious activity (and little acknowledgment of such).

Which seems better, IMHO. It would seem to me that maintaining a historic bldg would be an unnecessary burden & distraction for a viable, living Christian community. It's just so far afield from your core purpose. Not contrary to your purpose, of course-- it's a fine and worthwhile undertaking. But really unrelated to why you exist as a community. So it seems to me like it would inevitably become a distraction that bleeds your limited resources, both financial and volunteer, even if there were greater govt subsidies.

Altho I realize this may be a distinctly American perspective.

Posted by Enoch (# 14322) on :

There's something peculiarly depressing and lifeless about a church that is just being kept on as a historic building but isn't being used as a church any more.

It's a bit Ichabod, the glory og the Lord has departed.

[ 24. September 2016, 18:10: Message edited by: Enoch ]

Posted by lilBuddha (# 14333) on :

quote:
Originally posted by Enoch:
There's something peculiarly depressing and lifeless about a church that is just being kept on as a historic building but isn't being used as a church any more.

So you are depressed when you visit the Parthenon? Angkor Wat would leave you in a funk? Luxor lowers your mood?

Beautiful buildings lift a culture in a fashion that pure utilitarianism does not. This is, IMO, the only justification for Christian (and Buddhist) structures of any grandeur.

Posted by SvitlanaV2 (# 16967) on :

cliffdweller

Things sound more straightforward in the USA. Over here, the challenges are many. The CofE in particular is burdened with many beautiful old buildings with small or indeed non-existent congregations. Many are buildings which can't legally be sold for secular (or otherwise non-Christian) use, and/or are bound by listed status, which means they're expensive to convert to other uses. Some are simply in areas where little alternative use could be made of them.

Then there's the cultural issue. The Christian heritage that the public admires is bound up with ancient churches. Relatively few people require the ministrations of their local vicar, but his beautiful church may be a building they feel they own and take pride in. So although many CofE clergy and churchgoers might yearn to throw off the shackles of their ancient churches, they'd be risking a PR disaster if they abandoned their buildings all in one go.

OTOH, many people do imagine that 'the church' is full of money it doesn't deserve, and there are probably many communities where there is little shared affection for or awareness of churches as valuable buildings.

Posted by cliffdweller (# 13338) on :

quote:
Originally posted by Enoch:
There's something peculiarly depressing and lifeless about a church that is just being kept on as a historic building but isn't being used as a church any more.

It's a bit Ichabod, the glory og the Lord has departed.

But perhaps less so than a church-- i.e. Christian community-- that exists only to maintain a historical relic-- whether that's a really old or even beautiful building, or a really old and even beautiful type of music or instrumentation (whoops! was that a dead horse I tripped over?). This might be even more true in places like California where our historic church buildings (missions) are connected to some rather shameful aspects of our not-too-distant Christian past misdeeds. Easier to let them be decommissioned where they make useful field trips for 3rd graders, and allow churches the freedom to I]be the church.[/I]

There's value and wisdom in every society in maintaining relics that connect us to the past-- that goes for countries and local communities as well as for faith communities. But what makes it alive is what God is doing in and thru the community now, today. [

Posted by Arethosemyfeet (# 17047) on :

quote:
Originally posted by SvitlanaV2:
Strong family ties to a particular church surely suggest a close-knit community with a stable sense of identity. It's a shame for a church to enjoy that kind of benign environment and yet have nothing to offer.

That environment is not always benign. Close family ties to a church can lead to a sense of ownership that means that donations come with unmentioned strings. Usually along the lines of any change to the building to support the mission of the church will be met with anonymous letters made from cut out newspaper headlines threatening legal action and reversal of any alterations. Or maybe that's just round here...

Posted by Enoch (# 14322) on :

quote:
Originally posted by lilBuddha:
So you are depressed when you visit the Parthenon? Angkor Wat would leave you in a funk? Luxor lowers your mood?

No idea. I've never had the good fortune to visit any of them. But as they weren't used for the purposes of the religion I follow, I wouldn't expect them to have the resonances that a building that is used for Christian worship has.

I'm speaking as a Christian about buildings used for Christian worship. As such I'm saying what I feel about 'museumised' or ruined Christian buildings.

quote:
Beautiful buildings lift a culture in a fashion that pure utilitarianism does not. This is, IMO, the only justification for Christian (and Buddhist) structures of any grandeur.

That may be your opinion, but it isn't the only one, and I fundamentally disagree with it. The purpose for which a religious building is erected is for the use to which it is going to be put. Whether or not the builders put into it aesthetic qualities so as to edify worshippers, inspire worship, spect their deity, impress passers by etc., may well be significant, but it is a subsidiary, derivative, matter.

Apparently, there's some uncertainty as to how the Parthenon was used. The 'dead' religious structures most of us round here are most familiar with are probably Stonehenge and Avebury. They're moving to visit but no one really knows how they were used, or what gods were worshipped at them.

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