Few people will really know how the new tax bill will affect their charitable deductions until they prepare this year’s taxes and figure out their deductions, if any.
But based on the framework of the tax bill, which limits or disincentivizes deductions for charitable contributions, the likelihood is that the deductions will drop.
Does that mean that charitable contributions will also drop?
If there is no more tax incentive, or a reduced tax incentive, for charitable contributions, will those contributions still be made?
Based on reports I hear on NPR and on discussions elsewhere, many nonprofits are worried. The tax incentive, it seems, has been a big factor in charitable giving.
Or so it is said.
Which got me to thinking, not about charity’s tax incentive, but about its tzedakah incentive.
The Torah requires that virtually everyone give 10% of one’s net income to charity. This is the basic requirement. There are many qualifying details.
Such as: Which charities qualify? Are there charities that do not qualify, such that even if I give large sums to them I have not met any part of my 10% requirement? Oversimplifying, the answer is yes. The basic qualifying charities are food and Torah study, that is, the alleviation of poverty and the acquisition of Jewish knowledge. There are, of course, almost countless other worthy charities, which means that if one meets the 10% requirement for food and Torah, one may well wish to allot additional sums for all of the other worthy causes.
Clearly, definition plays a key role. Food and Torah may embrace a variety of causes. This is not the forum to enter into this kind of detail, which a learned rabbinic adviser can clarify.
My point here is more general: motivation. In the absence of a tax incentive, one is left only with a Torah incentive. Tzedakah is tzedakah, no less obligatory than unsubsidized matzah for Passover, for instance. The fact that a government incentive to give charity may decline or go away should have no effect on a Jewish person’s giving.
Of course, in reality, it may have an effect.
I asked Marsha Hurwitz, interim CEO of JEWISHcolorado, for her perspective.
“We have to help people understand the impact their tzedakah has,” she says. “When you can show cause-and-effect in transforming people’s lives, people want to be part of that mitzvah.”
Is Hurwitz worried? Will the new tax bill pose a challenge to nonprofits?
“We’re hearing that it is quite possible that the tax bill will pose a challenge, but what I’ve been reading from other nonprofits, Jewish and other, is that people will still want to give for the right reasons.”
Still, “we as an industry will be challenged if that deduction piece goes away.”
Right now, she says, people are calling JEWISHcolorado to prepay, to make next year’s donation now, when the deduction is still fully in place.
They are not necessarily giving more, but giving early, “given the uncertainty of how the tax code will impact them,” says Hurwitz. “It is a very busy time.”
It would be naive to think that for most of us the new tax bill will not pose a personal challenge. I am not old enough to remember a time when charitable deductions were not deductible. What we have, therefore, is a spiritual opportunity: to purify our motivation and sustain our level of giving.
It is always a challenge to follow the Torah for its own sake, without expectation of reward. Be it prayer, community activism, decency in interpersonal relationships or rituals such as Passover, there is always a “shelo lishmah,” a non-altruistic element, lurking.
Do I pray because I want to pray, or because I want to appear pious the eyes of others? Do I pray too quickly because I’m distracted and just want to get out of shul?
Am I active in a Jewish institution because I think I’ll meet business contacts this way?
Am I kind to someone because I know or suspect I’ll need a favor from that person down the line?
Do I embrace Passover because it’s just a chance to get away from work or from school?
In whatever we do Jewishly, we are challenged to purify our motives and actions. No one escapes this occupational hazard of Judaism.
The tax bill will just add one more dimension to this spiritual challenge. We may be asked to meet the 10% threshold with or without the charitable deduction. It’s really just the age-old challenge in a new form.
Rabbi Hillel Goldberg can be reached at firstname.lastname@example.org
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