How Tax Exemptions Can Hurt Churches During the Recession

Churches take in tons of money each week, and they don’t have to pay taxes on them.

But because of the recession, they’re not taking in as much as they used to. Therefore, they have to lay off some of their staff members. And the tax exemption is coming back to bite them in the ass:

Take Granger Community Church, a nondenominational megachurch with 60 staff members. With its annual revenue down a half-million dollars since 2006, the church found itself with little choice but to eliminate eight positions and cut the weekly hours of fifteen additional employees, said executive pastor Tim Stevens.

…

Making the predicament more difficult is that the Granger congregation, like most churches and many nonprofit ministries nationwide, does not pay unemployment taxes. The exemption for these religious organizations means that laid-off staff generally do not qualify for unemployment benefits.

So someone who has given their life to a church may be facing a rougher time during unemployment as a result.

How do churches explain this to their staff members? I wonder.

Would the people have been better off working elsewhere? I doubt they would say yes, but it’s gotta be difficult in their situation.

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Gabriel

Why do they have to lay off anyone? Shouldn’t that be the last thing they do? They could save money by turning off the electricity. Or if that is too severe they could just eliminate air conditioning and heating. They could explain it to the congregation as christian charity so that no one would have to lose their job. They don’t have to water their lawns. Everyone could work for the same salary. The senior pastor could take a pay cut and only earn as much as the lowest paid staff member. What would jesus do? Well as I remember what I read in the book he would sell everything he owned and give it to the poor.

Seems that Mr. Stevens doesn’t really understand christianity or jesus.
Jeff

They should start selling indulgences like the Catholic Church used to do in the days of old. That’s where the big money is. For a healthy sum, you can get a few years off purgatory.
River

Coming from a close-knit Christian community, I hear about this happening a lot, and also heard about how laid-off employees can’t get unemployment payments.

I think people should be reminded that most churches are small outfits that are living thin from collection to collection. If the senior pastor gets a pay cut to the lowest-paid employee, he’s still not getting enough money, just less now. I’ve heard of pastors taking extra jobs during their ministry and in “retirement” to just be able to support themselves and their families.

Of course, the example given is a mega church, organizations I have never felt much in the way of admiration, and I hope the economy kills them. (Not the members, just the institution.) I also think religious organizations should be taxed like everyone else, especially in the light of ensuring worker security. Providing for the saints, my ass.
Eamon Knight

60 staff? I’ve been in churches that barely had that many members. And the revenue was down half-a-meg? I don’t think I ever went to a church that total revenue more than maybe $200k or so.
Laura

How do churches explain this to their staff members? I wonder.

“God will provide.”

Several years ago, I met one minister who was quite proud that during his period of unemployment, he did not need to go on food stamps or participate in any other government-funded program. I can’t remember exactly, but I can vaguely remember thinking that I wouldn’t be too proud of basically becoming a beggar based on how he described his survival. I remember wondering what kind of lesson he was teaching his four kids, too, but I can’t remember exactly what it was he told me he did.

When I was a minister’s wife, they quite purposely kept us under the poverty level with the same reasoning, despite the fact that the church was prospering. Everyone told us to trust god more while we were trying to decide between eating or filling up our gas tank for the week while they were trying to decide what to do with the thousands of dollars they had in budget surplus. The self-defense mechanisms are ridiculous on all sides–the ministers and the congregation. I agree with the first two comments—most churches are small, but many churches of all sizes have their budget priorities completely mixed up. In fact, many of the larger churches save a portion of collection money for rainy days or for when one of their larger contributors dies. The norm, however, is the smaller church that was struggling even before the recession, though perhaps not as much as they think they are/were.
Richard Wade

I’m in such a shitty mood from that Answers in Genesis gun video that right now I somehow don’t feel very sorry for those laid off employees. Unemployment insurance came out of my salary for years and when I needed it, it was there because I paid for it. If they haven’t paid into the system that protects workers, then they don’t deserve any protection. Let God protect them. Let the churches, especially the big ones crumble into dust and blow away. Maybe those people can do something real for society, by working in a hospital, a school or a library. Even being a clerk in the office of the local trash department is more genuinely helpful than the fatuous nonsense that they practice at the Temple of the Thin God and the Fat Shaman.

I’ll calm down later, but right now, grrrrrrr!
Sabio

Happy Tax Day !
I am envious of church tax-exemption – we should all have it. No unemployment benefits — oh dear, we need the government to care for us.
matt

“It will be a sad day when the mission of the church is reduced to keeping people employed,” added the executive pastor, whose congregation gave laid-off staff members three months of severance and benefits and hired a career transition coach to help them find jobs.
Luther Weeks

I say treat it like a plane crash.

Those who keep their jobs can credit God.
Jeff

I wonder if they got a new batch of tithing reminder coupons at the same time as their pink slips?
Larry Huffman

This just highlights the ever-present christian scenario…we want special treatment…always. We want tax exempt status when it suits us…and then, when that special status hurts us, we will whine and see if we can get some more special treatment. I agree with Richard above…those of us who pay into the insurance can expect it…those who do not, should not. Period.

As for needing to let people go…those who suggest they do not have to are not making sense. The idea that somehow not watering the lawn or turning the heat off will offset salaries?? Ridiculous. The salaries are sure to be much higher than those other items…and if the building is still going to be used for services, then they cannot really shut those things off now, can they? But…come on…let the silly pastor earn his keep. He can mow the lawn and clean the bathrooms. He makes the lion’s share of the revenue anyway…and it is his serman…his pulpit that is responsible for the revenue. let him get his hands dirty. let him do some real work…rather than condemning people to hell and coming up with witty ways to say the same thing over and over and over, as is his normal job. I have known so many ministers and they really do live lazy, cush lives (compared to so many other careers I can think of). There is no way you can sell me on the idea that ‘visitiing all those sick and needy is really a tough job’…or that any of them do all that much of that sort of thing anyway.

Think I am being harsh…take a look at what small business owners do…they work 12 hour days and put their entire lives into their businesses to keep them afloat. I do not feel sorry for a minister having to do that. The way they make their livings…it is probably the least they can do.

But…if we are to feel sorry for businesses shutting down because no one is buying their products…I think there are hundreds or thousands that are sadder than a church going under. The fact that fewer people are buying their product is a good thing anyway. And let’s face it…it is a lousy product to be in the business of selling anyway. Time to make an honset living.
magdalune

It’s part of working for a non-profit – some benefits are cut out. I’m working for a church right now (don’t want to talk about it!), and I’m paid horribly with minimal benefits. That’s the side effect of working non-profit.

The same article above says that for many people working in non-profit organizations, the pay-off is the knowledge of doing good in the world. That’s probably true for most people working in this sector. And not just religious non-profit.