Tax reform, USCCB, Catholic Charities USA

Our friend The Motley Monk has some observations about tax reform, the USCCB and government funding of charities.  Here is the first part:

If you’re really interested in tax reform, the USCCB and Catholic Charities USA may not be…

Wall Street Journal op-ed calling into question whether tax “reform” should disallow the deduction for charitable donations offers a nugget of data that Catholics interested in tax reform should carefully consider.

The “nugget” is the total amount of money the federal government is pouring into charitable programs sponsored by the United States Catholic Conference of Bishops (USCCB) and Catholic Charities USA (CC-USA).  The op-ed notes:

Religious organizations also receive large infusions of federal funds. Catholic Charities USA receives more than half of its funding each year ($554 million in 2010) from federal grants. In 2012, the U.S. Conference of Catholic Bishops received $63 million…in federal grants.

It’s difficult to unpack the exact numbers because the recipients oftentimes use multiple names.  That said, the USCCB directly received $34,767,249 in the form of three awards in 2012.  That’s 17.3% of its 2012 annual budget.  CC-USA directly received $34,767,249 in 2012 for 21 contracts with the U.S. Department of Health and Human Services.

The President of the William Simon Foundation, James Piereson, who wrote the op-ed, stated:

These are reputable institutions, and many of the programs they sponsor are important. Nevertheless, in view of their dependence upon government funds, no one can seriously maintain that these groups are “independent.” Instead, they form one of the more powerful lobbying forces in Washington for increasing government spending, especially spending on tax-exempt groups.

Forget all of that “lobbying” to garner more federal largess which, in turn, only increases the federal tax burden on the less than 50% of U.S. citizens who pay income tax.

Bad as that is, all of that lobbying represents these organizations’ ever-increasing dependency upon the federal government to subsidize their “charitable” work.  And that’s the problem: The government knows just how to pull those strings when it’s to the government’s advantage to do so.

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18 Responses to Tax reform, USCCB, Catholic Charities USA

  1. Elizabeth D says:

    I think the #1 place to start on implementing Pope Francis’ idea of being a poor Church and a Church for the poor is to stop taking government money. Taking government money and doing programs with it is not charity.

  2. persyn says:

    An axiom that applies very directly here: “Judas was the first Bishop to take a government grant”.

  3. The Masked Chicken says:

    This is truly disturbing. Here, I thought the USCCB and Catholic Charities got their monies from private contributions. Not to put too fine a point on it, but what gives them the right to lecture us on a Fortnight of Freedom when they can’t even get themselves free from the government? Their position on the HHS mandate would be much stronger if they didn’t take any money from the government. It is too easy for the government to say, “they have cooperated with us, before, without saying a word and they knew where the money was coming from. They can’t be that concerned.”

    The Chicken

  4. acardnal says:

    Catholic Relief Services, an agency of the USCCB, receives the majority of its revenue from the USG. Over 70 percent of their operating revenue comes from the the U.S. taxpayer.
    Perhaps that explains their reported entanglements over the last several years with anti-life, contraceptive organizations. Here is the most recent : http://www.lifesitenews.com/news/u.s.-bishops-relief-agency-caught-giving-2.7-million-to-top-abortion-market

    CRS 2012 Annual Report, see page 35 for budget data:
    http://crs.org/2012-annual-report/images/PDF/CRS-2012-Annual-Report.pdf

  5. Rellis says:

    My day job (when I am not distracted in Catholic com-boxes) is to be Director of Tax Policy at Americans for Tax Reform.

    So I’m not without expertise here.

    The USCCB and other charities should not be concerned about this for several reasons:

    1. We had a ten-year real-world experiment in whether taxes affected charitable giving levels. They did not. In 1981, the top rate was 70%. In 1989, it was 28%. You would have thought this would hurt charitable contributions (since the tax break was more than cut in half). In fact, charitable contributions doubled during that period. There was actually the opposite correlation to what you might expect.

    Lesson–people view the tax break as a bonus, not a motivation.

    2. Only 30% of taxpayers itemize their deductions, and therefore claim a charitable deduction. Most people who give to Catholic causes get no tax benefit today. Granted, that 30% is where all the money is.

    3. Any charitable contribution pullback is likely to be a very slow phaseout. Only very, very high income people (who like to be philanthropic in any event) are likely to have absolutely no charitable tax benefit under tax reform. If there was no income tax at all, these very high income people would still want to give a ton of money. Tax benefits are just not a motivator for them.

    4. The more of these tax breaks you keep in place, the higher marginal income tax rates have to be on everyone in order to collect the same amount of tax revenue. If this deduction were curtailed, 100% of taxpayers would benefit with lower marginal tax rates. This includes those taxpayers who find their charitable deduction curtailed. Lower the rates and broaden the base.

  6. Cantor says:

    It’s also difficult to unpack the numbers when the article’s authors confuse the facts. What, for example, are the odds that 3 grants to USCCB in 2012 would be exactly, down to the last dollat equal to 21 grants given to Catholic Charities in 2010? The numbers are wrong.

    A visit to the linked website demonstrates the author’s errors. Sure, the USCCB and CC have received millions over the years.The vast majority of those grants are for assistance to migrants and combating HIV/AIDS in Africa and the Caribbean. Should we just stop doing that?

    There was an enormous upsurge in USCCB funding a few years back – jumping from $5.6M in 2008 to $42.8M in FY2009. (Did anything else happen in that timeframe to impact US social spending, I wonder?). That higher level has been maintained ever since.

    Would it be better to truly separate Church from State in our charity programs. Probably so. But let’s not muddy the waters with dubious factoids.

  7. Priam1184 says:

    It doesn’t surprise me that Catholic Charities is taking federal grants, even though they shouldn’t be because that money comes with strings attached, but why in the world does the USCCB need government money?

  8. PA mom says:

    Is an organization able to receive a significant percentage of its funding from the government and remain politically neutral?
    Realistically, I think the answer is highly doubtful. Who wouldnt be grateful to receive large sums of money to fulfill their dreams of helping others? But, should bishops allow even the possibility of being “bought” by one political Party or the other?
    My father, separated Catholic, finds the bishops to be WAY too cosy with the Democratic Party. I believe that once he began to see them, and the Church by extension, as socialists, it undermined his faith considerably. Want to stop losing Catholics? Be genuinely politically neutral.

  9. maryh says:

    @Rellis
    The USCCB and other charities should not be concerned about this for several reasons

    Thanks for your expert response. I’m honestly confused. What “this” should they not be concerned about? Taking money from the government? Or NOT taking money from the government?

    Also, you seem to be talking mainly about tax deductions for charitable giving. Are you counting those tax deductions as charities “taking money from the government”?

    @Cantor
    Was the sudden upsurge in USCCB funding from government grants or increased donations? FY 2009 started on October 1, 2008. Obama was elected president on November 4, 2008. So it looks like the huge leap in funding (and from $5.6M in 2008 to $42.8M in FY2009 is over 750%) has to do with Obama. If the funding is coming from the government, it looks like Obama is trying to buy the USCCB. If the increased funding is coming from increased donations, it looks like a lot of Catholics who give to charities are opposed to Obama.

  10. Rellis says:

    @maryh, the original article said (inaccurately, IMHO) that the USCCB would be opposed to tax reform because, in a separate matter, they get government grants.

    In no way do I think tax preferences are the same as government subsidies (though you’d be surprised how many smart people get confused by this).

  11. Cathy says:

    It is a sad reality. Why worry about people in the pews when you can get much larger contributions from other sources? While I can say I will not contribute to CRS, because they can and do get grants from the government, I’m still forced to contribute and, in the meantime, I look like a big meanie for not donating to feed the poor campaigns, where our little ones work at making meal packages to be distributed by the likes of CARE who will offer this food along with birth control. I’m sick about all of this.

  12. Cantor says:

    maryh –

    The data is strictly Government grants, loans, etc. My hunch is that the ‘new administration’ wanted quick implementation of some ‘new programs’.

    In fairness, the Catholic Church has long had infrastructure in place in Africa and the Caribbean, and a fairly active immigration program here as well. It was a natural fit, but certainly screams of Church/State issues.

    On the other hand, the sad fact is that if every ostensible Catholic in the US put FIFTY CENTS in a collection, it would more than cover the 2012 government grants, keep the programs alive, and cut the ties that bind.

    If you want to see the mind-blowing graphic, use the following link and click the “Timeline” tab:
    http://www.usaspending.gov/search?form_fields=%7B%22search_term%22%3A%22united+states+conference+of+catholic+bishops%22%7D

  13. maryh says:

    That’s it. No more contributions CRS. And no more contributions to USCCB.

    I’m part of the 30%.

    I will NOT knowingly contribute to any charity that takes federal money.

    Period.

  14. UncleBlobb says:

    Elizabeth D: Amen.

  15. Southern Catholic says:

    That’s it. No more contributions CRS. And no more contributions to USCCB

    How is that going to work exactly? Are you going to stop giving to the collection every Sunday?

  16. acardnal says:

    As I recall, Blessed Mother Teresa refused to take government money . . . from ANY government. Too many strings attached.

  17. johnmann says:

    I’m surprised that Catholics are surprised. Did nobody here attend Catholic school? I didn’t but even I’m aware of the public funding for educational material.

    I’m also surprised at the opposition. The alternative to Catholic services is government. The alternative to Catholic schools is public schools. We need more of this, not less. We need school vouchers for all. Not only that, but strings get pulled in both directions. Catholic hospitals have traditionally been so vital to the US health care system that they may be the only thing preventing a mandate that all hospitals perform abortions.

    As for the charitable deduction, there should be restrictions. Donating to fund a scholarship is one thing. Donating to fund a Scientologist cruise is another. If we can’t distinguish between the two, abolish the deduction completely.

  18. Lin says:

    WOW! I had no idea that the Church was receiving that much from the government! No wonder the bishops don’t speak out! No wonder my reports to the bishop’s office of improperly said Masses are falling on deaf ears. They have much bigger fish to fry! Keeping the Mass Catholic is the least of their worries! I must say I have become very disillusioned this past year with the hierarchy. I lost any hope of a sane government after Reagan. Now that I know the two are feeding off of each other, it would be easy to lose all hope. Satan is quite clever! GOD help us! Pray! Pray! Pray!