Where are my alms going?
Exploring the Interplay of Taxation and Charitable Donations (June 1, 2023)
Let’s start this review with a little story.
Once upon a time in old England there were some local churches which beseeched their members to make an annual pilgrimage to a holy site and bestow a gift for use in its efforts in the easing of suffering. However, it was a long and somewhat dangerous journey, made especially hard due to the fact few of the relatively poor church goers had horses or mules to ride. This realm of England had the good fortune of having a devoted Christian king, and this king participated in the annual pilgrimage, made somewhat less arduous due to his royal horses, padded carriage, and armed guardsmen. The king would often see fellow Christians on the difficult passage and felt sorry for them. Then he had the idea of easing their burdens by offering to collect and transport their gifts to the holy site so they would not imperil themselves. So, the king put out the word and it was gladly received. He received dozens of little bags of coins to accompany his own much larger one, and off he rode. Weeks later came a missive from the holy site which was read aloud in all the churches of the king’s realm. The letter provided gracious thanks to the king for his larger than usual gift, but chastised the members of each church for not bestowing any gifts at all this year.
Was it a mistake? Bad communication? Or just a bad king. Nonetheless, it is just one way to view the evolution of alms giving from days of old to modern times. Only, replace king with government and replace ‘offer to transport’ with ‘demand that you pay' (i,e,. taxes).
In early Biblical days there were strict rules on tithing to the temple and separately giving alms to the poor. In another article I addressed modern views on the perceived acceptability of redirecting tithes to other charities if members believed their church is not doing enough care-based outreach. (That is, transferring tithes to alms.) In all of this analysis it is easy to miss the simple fact that charitable donations, which includes giving to churches, is on average quite meagre. Information released by Statistics Canada1 in 2021 notes that the median level of family donations claimed for tax purposes was only $139 per year. Especially alarming is that for families earning $140,000 or more, the median is a paltry $199 per year.
The question I regularly ask myself is: ‘Does this mean people today are self-centered and do not contribute much to worthy causes?’ One possible view on this is that we do contribute a lot by way of funding the government to do nationwide work in important areas of need such as education, health care, support of the poor, as well as many additional areas that ease suffering and try to raise individuals out of the conditions that contribute to their poverty and afflictions. In September 2020, the Fraser Institute reported that the average Canadian paid nearly $39,000 in taxes (all types), representing 42.6% of their income.3 Statistics Canada reported that in 20202 combined per capita government spending include the following areas: Housing ($300), Health ($5,787), Education ($2,989), and Social Protection ($8,527). Just using these metrics alone it could be said that individual Canadians, on average, contributed $17,603 to worthy causes, many of which were institutions of the Church in olden days. The primary difference is that now we, as individuals, have no control in the amount we contribute.
This arrangement does mess with the positive experience of happy, wilful and sacrificial giving described in the Bible. But it doesn’t necessarily reduce what we ultimately contribute. An argument sometimes made in support of maintaining full tithes is that we still need to fund the work of the Church. Who will, if we don’t? However, as I previously described, governments do fund churches in many significant ways, most prominently through the figurative “matching” of member donation by way of tax credits. And where do they get this money? From us, of course.
Couldn’t you imagine someone reading the above and making the snide and cruel argument that since poorer folks pay less taxes on a percentage of income basis, they should contribute more to charity than the wealthy. As it turns out, on a percentage of income basis they do, with lower income people committing 4% of their income and the uber-rich contributing less than a half of one percent. I feel confident in saying this has nothing to do with the stupid argument and more about who they are as a people.
Another somewhat holistic view of this complex matter is to consider what government represents in a democratic society. It is reasonable to argue that, on a macro scale, government is just an instrument of the people and that any action of government is really that of its people acting en masse. Perhaps the question of what you have done in this or that area of concern (charitable giving being just one example) must really include the government, your agent in so much of what you do.
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1. Statistics Canada, Donor rate and average annual donations, by family income, https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=4510003601
2. Statistics Canada, Consolidated per capita spending by selected Canadian Classification of Functions of Government 2020, https://www150.statcan.gc.ca/n1/daily-quotidien/211126/t001a-eng.htm
3. The Fraser Institute, Average Canadian family spends nearly $39,000 per year on taxes,
https://www.fraserinstitute.org/article/average-canadian-family-spends-nearly-39000-per-year-on-taxes