The Elephant in the Room We’re Close to Talking About?

The Elephant in the Room We’re Close to Talking About? June 29, 2018

On the popular topic of churches and how American society can give them even more benefits, the political conversation of late had focused on removing the Johnson Amendment, the rule that churches can’t endorse political candidates.

Incredibly, from the same Congress now comes a new tax rule that they pay tax on some benefits they give their employees. To be clear, this isn’t a new tax, it’s a removal of a tax exemption.

Could the tide be turning on churches’ untouchable status?

Closed financial records

Churches’ tax-free status is a big issue, but a bigger one that should take priority is an easy one. It’s one where church members themselves should be leading the charge. It’s embarrassing to the reputation of the church, and correcting it would cost churches nothing.

It’s churches’ closed financial records. Every U.S. nonprofit can receive tax-free donations, but in return it must annually fill out an IRS 990 form that divulges to the public its income, expenses, assets, the salaries of its executives, and more. Every nonprofit, that is, except churches.

Why is this embarrassing exception not on more people’s radar?

An expensive gift to churches

I’m a nonbeliever, but let me emphasize that the issue here isn’t nonbelievers annoyed that they must help pick up the slack (the subsidy that American society gives religion because of its tax-exempt status is estimated at $83 billion per year). The issue also isn’t to challenge churches’ nonprofit status. Those are worthwhile conversations, but the real issue is the embarrassment the closed books should cause Christians. What do churches have to hide? Nothing, you say? It sure doesn’t looks like it. American Christians, this exception makes your religion look bad.

Christians should be leading the charge on this issue. They should be telling their representatives that churches don’t need the secrecy of closed financial records. The only benefit would be to hide fraud or financial excesses such as lavish mansions or excessive salaries. Does a high-profile televangelist deserve an enormous salary? I’m not sure that that’s how Jesus did it, but whatever—simply make that information public to the society that is helping to foot the bill.

You remember Jesus, right? He’s the guy who told the rich man, “Sell everything you have and give to the poor, and you will have treasure in heaven.” What would Jesus say about churches’ secrecy?

If executives at public corporations and other nonprofits can make their salaries known, surely God’s representatives can do the same.

Isn’t it ironic that an atheist must point this out? If Christianity has something to teach society about morality, shouldn’t it be setting the example by taking the narrow path? And if God can critique the books—and consequently judge the church’s leadership in eternity—what possible concern could there be about letting the rest of us see?

Sensitive to the problem, some organizations within the Christian community have emerged to restore confidence. The Evangelical Council for Financial Accountability imposes on its members standards of financial accountability and transparency. Membership becomes a seal of approval. Another organization is MinistryWatch, which evaluates ministries for the benefit of potential donors. While these affect some big ministries, we’re still in the dark about income and salaries, and they do nothing to illuminate the workings of the vast majority of the 350,000 congregations in the United States.

In 2007, Senator Charles Grassley (R-Iowa) investigated six high-profile ministries that each had revenue in the $100-million-per-year range. He wasn’t an insignificant busybody; this was a U.S. senator on the Senate Finance Committee, and understanding where the money went and trying to restore confidence and accountability was his job. However, the playing field has been so tipped in Christianity’s favor that five of the ministries didn’t bother cooperating, and they got away with it.

An easy solution

The solution is available and it already works for the 1.5 million nonprofits large and small that fill out IRS 990 forms every year. The 990 does the job, it’s been in use for 75 years, and it should be our window into the operation of all nonprofits, including churches. These forms are easily and anonymously accessible from sites like GuideStar or Charity Navigator. If a church has enough revenue to keep records, it can fill out the form. There is a four-page 990-EZ for organizations with less than $200,000 in revenue, and an even simpler 990-N for those with less than $50,000. Filling out a 990-N takes minutes.

The change is trivial to make: simply amend the document “Instructions for Form 990” by removing the first four items from section B, “Organizations Not Required To File Form 990.” That’s it. The only difficult part might be the church leadership taking a deep breath and revealing to the world how they spend your money.

Keep in mind who benefits from the status quo. Wouldn’t you like to see Scientology and other cults forced to disclose their assets?

Christians, I know that many in Congress are eager to subsidize Christianity, but tell them that you don’t want it. Tell them that your religion doesn’t need a crutch and that its activities can withstand the light of scrutiny like every other nonprofit. Secret financial records benefit no one except those with something to hide.

We have an election in November. Churches’ financial transparency would not only be the right thing, it would be easy to spin this as a positive for churches. The status quo is an embarrassment for the honest faithful, and this is one perk that it would benefit the church to have removed.

The overseer must be above reproach as God’s steward.
— Titus 1:7


(This is an update of a post that originally appeared 2/9/16.)

Other relevant posts:

Image credit: Nick Ares, flickr, CC


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  • eric

    Could the tide be turning on churches’ untouchable status?

    Doubtful. I think it’s much more likely to have been an oversight on the parts of the GOP legislatures. Remember, the tax cut was rushed through with pretty much no debate. Many of the changes were so last minute that they were written in the margins of the printed bill by hand. I’m very certain that the GOP legislators that pushed it through were trying to make all other non-profits pay this tax, but forgot to write in a specific exemption for churches, and (b) will likely “fix” this problem by again giving churches this exceptional tax break next time they get the chance.

    • I share your pessimism, but I’m grasping at straws here. This is a huge error, and it’s easy to argue that the status quo is an embarrassment to the average Christian. What will it take to make this topic an issue that gets a public hearing??

  • Doubting Thomas

    I think the churches would fight the Form 990 requirement with the idea that this is just a step on the way to the real goal of taxing the churches. And to be honest at least to my intentions, they would be right.

    • That tends to be where I’m going, too, but it’s not out of malice. I see them as two quite different issues.

      My thinking is that you treat churches like a nonprofit and look at the overhead vs. program expenses. For CARE or United Way, it’s 10%/90%. For the Christian church in the US, it’s 90%/10% at best. I wouldn’t be surprised if it’s substantially less than 10% that goes out to good works. (But then we won’t know how much that is until we get the frikkin’ secret books opened.)

      Churches could say that the “overhead” is church services and so on, but then a country club could make a similar argument–these are vague intangibles (rather than solid, checkable statistics like “10,000 sandwiches per week”).

      Tell me if this is what’s in your mind.

      • Doubting Thomas

        Yup. If churches want to play ball, they should be treated like every other nonprofit organization. Every year there’s a group that puts out a charity ranking around Christmas time. There’s not a church in the US wouldn’t end up on their “Grinch” list if they were held to the same standard as other organizations. I think this would hopefully shame Christians into upping their church’s charitable contributions as well as disabuse them from the “without churches who would feed the homeless?” type arguments.

        If it were possible, every country club would pay 10% of their income to be granted the same status as churches. They would be dumb not to if they could write off all maintenance and members could write off their dues. I’m surprised no one has started the St Andrew’s Church of Greens to try to get their CC on the same level as churches.


    Not while the evangelicals’ sock-puppet is in office…..never happen!

    • You’re probably right, but even this little tax on the church is a big surprise. Churches have started a conversation. Wouldn’t it be nice if that were a mistake, and it opened a broader conversation they didn’t want?


        Lovely idea….but, about as likely as Jesus dancing down to earth on a sunbeam.

  • Ficino

    I agree that it won’t happen with the Republicans in power. The whole Moral Majority thing got started over the threat of taxing segregation academies, didn’t it, and “universities” like Bob Jones?

  • Brian Curtis

    They’ll just go back and carve out a special exception for churches, and the rightward slide will continue.

  • Bald Humanist

    “The solution is available and it already works for the 1.5 million nonprofits large and small that fill out IRS 990 forms every year. ”

    This. The simple and correct solution. That way…groups like Charity Navigator could also provide ratings.

    The problem I see with most Evangelical churches is they spend a huge amount on pastors.