How Tax Reform May Impact Giving to Your Church

As 2017 came to a close, one topic seemed to dominate the headlines: tax reform. As news of sweeping changes made its way from Capitol Hill to Facebook, assumptions were touted as truth, and opinions spawned heated arguments.

Tax Reform

Personally, I began receiving emails from concerned clergy: How will tax reform affect people’s giving to my church? While we don’t really know for sure, let’s explore some details that may inform how you approach the conversation with your congregation.

Charitable Contribution Deduction Continues

Although some tax reform proposals eliminated deductions for charitable contributions, the final bill did not eliminate—or even limit—the deduction. That’s good news.

However—there’s always a “however” with tax legislation—a significant change to the standard deduction (see below) will likely decrease the percentage of taxpayers who itemize their deductions.

Standard Deduction Nearly Doubles

Although the charitable contribution deduction was spared in the overhaul, it’s likely fewer people will bother with it. Why? Because for 2018, the standard deduction is nearly double what it was last year: $24,000 for married taxpayers filing jointly and $12,000 for singles.

It’s safe to assume most taxpayers will gladly accept the standard deduction. In fact, experts predict only 5% of households will itemize going forward, compared to 25% in 2017. So, persons for whom tax benefits are their primary motivation to give will likely be less generous in the future. The Lily Foundation predicts this change alone will reduce charitable giving by $13 billion per year.

Percentage Limitation Improves and Pease Limit Suspended

In the past, the deduction for charitable contributions was capped at 50% of Adjusted Gross Income (AGI). Now through at least 2025, that cap is set at 60%. For taxpayers with a higher net worth, this simply means they’ll be able to deduct more of the current year’s contributions, as opposed to doing a carry forward as they may have in the past.

 In another boon to higher income taxpayers, the Pease rule has been suspected through 2025. (The Pease rule reduced some itemized deductions by up to 3% depending on the household’s AGI.)

Gift and Estate Tax Exemption Doubles

For 2018, the gift and estate tax exemption is $11.2 million. For 2019 through 2025, it’ll be $10 million, subject to inflation. We expect this exemption to be throttled all the way back to $1 million beginning in 2026, which may have a significant impact in 2025.

Considerations for Churches

  1. Motivation matters. Although some pundits are taking a doom-and-gloom perspective on charitable giving, there’s an important distinction to be made between secular and Christian givers. Most people who give to churches and ministries aren’t primarily motivated by tax benefits; they’re motivated by biblical teaching, by gratitude, and by the good that’s being done in their local communities. In other words, a family who contributes $18,000 per year to your church isn’t likely to stop doing that because of tax changes. Rather, it’s reasonable to assume they’ll take that new standard deduction and continue to be generous. Moreover, many families may be paying less in taxes, which means they’ll have more resources to give away.
  2. Strengthen your generosity culture. If motivation truly matters, then you should be doing all you can to create a culture of generosity that keeps the focus on the real motivations for giving. Regular preaching on giving, teaching in small groups, proper stewardship of your givers, regular communication of the impacts made through your amazing ministries…all these things (and more) will help to grow giving. If you’re not sure you’re doing all you can in this area, let’s talk about a generosity coaching engagement to evaluate what you’re doing and make the needed changes to improve.
  3. “Bunching” is the new strategy. Tax advisors are encouraging their clients to “bunch” their contributions to exceed the new standard deduction. That means people who’ve typically spread large contributions across multiple years may make sizable contributions in one year. That sounds great, but you’ll need to consider how that will affect your ministries’ cash flow. Given the alarm bells being rung in late 2017, it’s possible some of your high capacity givers made their 2018 contributions last year!
  4. Educate your congregation about non-cash gifts. Under the new law, some taxpayers may benefit from giving appreciated stocks, rather than cash. Also, IRA Charitable Rollovers are now permanent. For an introduction to IRA Charitable Rollovers, download my new e-book: Establishing a Culture of Legacy Giving in Your Church.

Beyond Taxes

Although it’s important to be in-the-know about tax reform and how it may impact giving to your church, it’s just as important to focus on the eternal implications of generosity. Christian leaders must continually inspire and challenge our congregations to give. Need help? Drop me an email. I’d be honored to have a conversation with you.

A Pep Talk for Church Communicators

I’ve partnered with churches for more than 15 years, and I’ve learned a lot about what it takes for a church to disciple people well and make a difference in their community. Without a doubt, church communicators play a significant role in their church’s effectiveness.

Pep Talk BookAs I’ve met with communications directors around the country, I’m consistently struck by how challenging their responsibilities are. Kelley Hartnett, a church communicator with whom I first became acquainted through my work with Morning Star Church near St. Louis, Mo., understands—first hand—how demanding the work can be. Her recently released book, You’ve Got This: A Pep Talk for Church Communicators, offers her tribe some much-needed encouragement and practical insight.

Establishing a Culture of Legacy Giving in Your Church

A study from Boston College Center on Wealth and Philanthropy projects that charities are forecast to receive more than $6 trillion from final estates between 2007 and 2061. This is great news for your ministry. If, that is, your church is among those charities. But because legacy giving—a present decision to make a future gift—is rarely discussed in American churches, it’s likely not.

Legacy Giving

Few things are as frustrating as a ministry with a God-inspired vision that is prevented from fulfilling that vision due to lack of funding. Legacy giving is an important tool that better equips the local church to fully resource the mission and ministry that God has given you to impact your community. To help pastors begin or strengthen their legacy giving strategy, I’ve written a new eBook, Establishing a Culture of Legacy Giving in Your Church. 

How to Thank Givers

Not all thank yous are created equal. When it comes to thanking people for their charitable contributions, your approach matters.

How to Thank Givers

This isn’t the first time I’ve written about the value of saying thank you. I talk frequently about the importance of sharing stories to show how giving creates change. I’ve even written an eBook about the connection between communication and generosity.

Today, I thought it would be interesting to bring the point home again by comparing and contrasting a couple of thank-you emails I recently received from charitable organizations. We can learn from others how to thank givers.

Normalizing Conversations About Money Through Small Groups

Many pastors feel uneasy about bringing up the topic of money. You might get brave enough to talk about it during November as part of an annual “giving campaign,” and you’ll preach four or five money-themed messages (in a row!) during a building project every few years. But frequent and regular mentions of money typically don’t happen.

Small Group Generosity

You see, pastors tend to reserve conversations about money for special occasions and big asks, thinking they’re less likely to offend or anger their church family if they talk about touchy subjects less often. In reality, the opposite is true. The more we normalize conversations about money, the more joyfully and sacrificially people will give.

Three Steps to Ensure a Successful Year-End Giving Appeal

In 2016, people gave $390 billion to charitable organizations, a record level for the third year in a row. According to the most recent data available, online giving is growing at more than four times the pace of overall giving, and data shows 31% of online contributions occur in December—with 12% happening during the last three days of the year.

person holding christmas lights

There’s no doubt that the month of December is a valuable opportunity for you to encourage and equip your congregation to participate financially in your ministry. Follow these steps to ensure a successful year-end giving appeal.

Important Dates for Year-End Giving

Year-end giving is a big deal. According to recent data, 31% of annual charitable giving occurs in December, with 12% of donations given during the last three days of the year. Why is that? Surely it’s because of your inspired preaching during the Advent season, right? Of course it is. 

Year-End Giving Calendar

However, it may also have something to do with a date far into the future—April 15, Tax Day. That’s right: In addition to being motivated by compassion and the “holiday spirit,” many of us want to maximize our charitable contributions before the year runs out.

As you plan your year-end giving strategy, be sure to communicate these important dates:

Engaging Millennial Givers

As the proud father of two young adults, I might have a slightly biased opinion, but I think Millennials, people born between 1981 and 1998, have gotten a bad rap. Now the largest living generation, Millennials have been pegged as entitled, lazy, insubordinate, selfish coffee snobs whose face-to-face social skills have been completely wrecked by texting and social media.

Millennial drinking coffee

While there’s at least a drop of truth in that description—as is the case with most stereotypes—I’d like to suggest an alternate descriptor: Millennials are misunderstood. And that’s particularly the case when it comes to the idea that they’re selfish. The truth is, Millennials are exceptionally generous with both their time and financial resources. Dollar for dollar, they may not be giving “as much” as older generations; however, as a percentage of total income, their giving is on par with that of Baby Boomers.

“But Rusty,” you might be thinking, “My church is full of Millennials, and they’re not giving.” First of all, congratulations on having a church full of Millennials. Given that 32% of adults under age 30 have no religious affiliation, you must be doing many things well. And my guess is the Millennials at your church are giving—somewhere else. If they aren’t yet contributing financially to your church, that may say less about them, as Millennials, than it does about your church’s generosity culture.

Maintaining Momentum in the Fulfillment Phase

The months leading up to a generosity initiative can feel exhausting. Given the number of decisions to be made, conversations to have, and plans to implement, it’s natural to reach Commitment Weekend and think, “Whew! We’re finally at the finish line!”


I hate to break it to you, but Commitment Weekend is more like the end of the third lap. To finish well, you’ll need to turn your attention to the last—and critical—phase of your initiation: the Giving Season or Fulfillment Phase. Implemented well, you’ll receive 92% or more of your commitments. Done poorly or neglected? Your people will meet as little as 50% of their pledges.


Maintaining momentum during a generosity initiative isn’t difficult, but it does require some intentionality.

Accelerating Year-End Giving at Your Church

Did October sneak up on you, too? It seems like just yesterday you were powering through Vacation Bible School, and now—suddenly—it’s only 10 weeks until Christmas. (Did your blood pressure go up a bit just now?)

Year-End Giving Guide

Along with the stress of planning for the Christmas season, many church leaders feel some anxiety about what comes after Christmas: the end of the fiscal year. There isn’t much time left to meet projected budgets. How will you leverage the remaining weeks of 2017 to accelerate generosity in your church?

Year-End Giving Guide