A new study finds a diminished standing for religious organizations and their tax status.
A new major analysis of views on charitable giving and the meaning and purpose of philanthropy finds that less than half of Americans believe organizations whose purposes are “religious services” deserve federal tax-exempt status.
The recently released, detailed study, “What Americans Think About Philanthropy and Nonprofits,” was conducted last summer by the Indiana University Lilly Family School of Philanthropy, which posed a battery of questions to 1,334 U.S. residents aged 18 or older. The undertaking was prompted by increasing public concern about “the influential role of philanthropy in American society to address issues and solve problems,” and the persistent decrease in charitable giving by Americans since the 2008 “Great Recession.”
In what might be the report’s most troubling finding, only 48.5 percent of those surveyed agreed – when asked “Do you believe that 501(c)(3)s should be allowed to support the following activities or goals?”—that “religious services” should qualify the federal tax-exempt status. In comparison, 57.5 percent qualified “voter mobilization,” 67 percent agreed with “criminal justice reform,” and 83 percent for “K-12 education” as qualifying for the important status.
At 14.2 per cent, only political campaign contributions ranked lower than “religious services.”
Per the report’s authors:
Surprisingly, just under 50 percent believed that 501(c)(3)s should be allowed to provide religious services, despite this clearly being a prerogative of religious nonprofits that qualify for 501(c)(3) status as long as: (1) “the particular religious beliefs of the organization are truly and sincerely held;” and (2) “the practices and rituals associated with the organization’s religious belief or creed aren’t illegal or contrary to clearly defined public policy.”
One of the report’s key, related findings is “Americans do not know much about the philanthropic sector nor are they aware of many nonprofit entities or the rules that govern their activities.”
While not neatly tracking, on a percentage basis, in responses to the report’s varying questions, religious organizations’ comparative diminishing status—a perception which drawing larger numbers amongst younger Americans—was evident elsewhere in the survey.
When asked “When you think of charitable giving, what do you include?” nearly 92 percent checked off “giving to non-profit organizations,” a much higher rating that the 66 per cent who agreed with “giving to religious congregations / organizations.” Broken down by two broad age categories, 69 percent of “Older Americans” agree that giving to churches is charity, while only 61 percent of “Next Gen” Americans—those born after 1981—took that position.
But religious organizations did score one relative high point in the survey. Asked “How much do you trust the following charitable entities to generally do what is right?”, nearly 36 percent chose “religious charitable organizations.” The next highest scorer was “community foundations” at 31 percent. At the bottom of the offered categories,
Impact investing and giving by corporations were the charitable practices least trusted to do the right thing with only about one in 10 respondents indicating that they trusted these entities completely/very much.
Related to that, the survey investigated views on giving based on status—pitting small donors versus the mega-wealthy— and found 6 in 10 believe that “smaller donations from many donors in the general population” is “more important to America” than large gifts from its wealthiest citizens.
The results exposed an unsurprising and widespread lack of trust among major social and government institutions. Asked the broad question “How much do you trust the following entities to do what is right?”, nonprofits topped the list, with (only) 39 percent of those surveyed agreeing, followed by 31.3 percent selecting religious institutions. “Big Business” ranked dead last at 5.8 percent.
There was also a mixed finding on the general perception of whether charitable giving benefits “society as a whole.” While a third responded “a large amount,” 44 percent chose “a moderate amount,” while a near quarter of the population opted for “only a little” or “not at all.”
The survey’s purpose, according to its authors, was to “examine public attitudes and perceptions of philanthropy and the nonprofit sector, including contemporary criticisms of big philanthropy, defined here as giving by wealthy individuals and foundations,” and to “explore philanthropy in the context of a larger environment, the relationship primarily between philanthropy and government.”
Declaring “it appears that many Americans do not recognize their own engagement with nonprofits or understand the nonprofit services they are unknowingly receiving,” the 52-page report wrapped up with a call to “reinvigorate the general public’s trust in the philanthropic sector and reverse the declining donors trend,” and to address “concerns about the sector’s transparency and accountability” by promoting “the importance of gifts from everyday donors” and pursuing “diversity and inclusion efforts.”
Doing all that, its authors contend, has “the potential to greatly enhance the overall vitality of the sector.”
Alas, the conclusion made no mention of taking action to reverse the public’s seemingly diminished views about religious organizations meriting tax-exempt status.