Special Privileges and Church Vitality

No sooner had the Puritans set foot on the shores of New England than they began to grapple with some of the same church-state questions we still deal with in our churches.

Most of the early Puritans, for instance, believed that ministry should be supported by voluntary gifts, and shun dependence on the state. This was understandable because the Church of England, from their point of view, had grown lax and corrupt from state support. Beholden to the crown, the church had to adjust its ways to placate each new monarch or archbishop. Having accepted everybody’s taxes, the church felt pressure to treat everyone as Christians, even those who—by the standards of the Puritans—were obviously not.

The Puritans knew from experience that accepting government support could undermine their vision of a disciplined and energetic church whose every member took joint responsibility for their great mission in the wilderness.

And so, in the first churches of New England deacons passed the plate and used the proceeds to give alms to the poor and pay the minister.

This worked best in the bigger towns, many of whose ministers had independent wealth (the equivalent, in those days, of a spouse with a good job). It worked less well in smaller towns, whose ministers disliked sharing the plate with the rest of the poor and started to demand that the colonial authorities assure them of a “stinted stipend” or fixed salary. In most places, the only way to manage this was to force townspeople to divvy up. The result was the system of church taxes that endured in most of New England for some time after the adoption of the First Amendment in 1791.

The Puritans spent much of the 1600s arguing among themselves about how to balance the convenience of public support against their vision of a disciplined and covenanted community of saints. I wonder whether it is time for us again to talk about this question.

Public support for congregations endures today in several forms, including exemption from direct taxation and a variety of indirect benefits like the charitable tax deduction and the clergy housing allowance.

As you may have heard, the Freedom from Religion Foundation (what a wonderfully irritating name!) has sued to stop tax-favored treatment of the clergy housing allowance. The case will take some time to work its way up through the courts, which have ducked the issue since 1954 and may duck it again. But what if they don’t? Each of us may soon have to decide how to respond in public to a court decision—either to affirm the constitutionality of the clergy housing allowance or to strike it down.

Leaving aside for now the constitutional question, I would like to hear us talk among ourselves about whether public support—including the clergy housing allowance—actually helps or hurts us in accomplishing our purposes.

One fact needs to be laid on the table frankly: as with most tax benefits, the big beneficiaries of church tax exemption are the big players—large congregations and highly-compensated ministers. A few clergy—those who earn over $100,000 a year—make out very well. Such a minister, married to a surgeon, living in a million-dollar house can save more than $20,000 a year in taxes compared to a non-minister in similar circumstances.

Small, marginal congregations benefit from tax-favored treatment, in the sense that their buildings can sit idle as their numbers dwindle, and sometimes for years afterward. But is this really a benefit to congregations, or to faith? What if failing congregations had to close more quickly, as other non-profits do when they have ceased to serve the public? Might the religious enterprise actually be strengthened?

A sudden loss of the clergy housing allowance as a result of an adverse decision would undoubtedly be harsh and unfair. We should lobby hard for legislation to soften the blow. But if we take the position that tax-free housing is our right, or necessary for the freedom of religion, we risk making ourselves look a bit ridiculous.

Religious institutions have a public image problem. High-profile scandals have confirmed some of the gravest worries members of the public have expressed for years—that “organized religion” cares more about its own material success and power than it does about its message or the people that it serves. This is unfair to most of us, but the public perception is a fact we need to consider as we decide how to respond to court decisions about the special tax treatment we have become accustomed to.

Beyond public perception, we need to pick up the question that the Puritans laid down when they accepted tax support in the mid-1600s: does public support actually help religious institutions to achieve their purpose, or does it weaken more than strengthen them? I would like to hear a conversation among religious leaders about whether it is time to let go of some privilege in the process of reclaiming our vitality.

“Faithful Finances: Special Privileges and Church Vitality” originally appeared in the May/June 2011 issue of Clergy Journal, and was republished as Alban Weekly, May 30, 2011.