The Brewing Storm of Tax-Exempt Status
By Bill High
On the surface , life seems normal for Christian schools and organizations . But challenges lie ahead with a brewing storm .
There ’ s a growing movement to label Christian schools and organizations as hate groups , affecting their tax-exempt status and funding .
Few people know that in September 2019 , in Washington , D . C ., the House Ways and Means Committee in the House of Representatives held a hearing , “ How the Tax Code Subsidizes Hate .” Representative John Lewis , who later passed away in July 2020 , presided as chairman over the subcommittee . Lewis defined hate groups as organizations that “ promote hate based on race , gender , religion , sexual orientation , or ethnic background .” 1 The committee heard witness testimony from various shootings such as the Pulse Nightclub shooting in Orlando and the Walmart shooting in El Paso . They then discussed whether the IRS should grant tax-exempt status to groups with discriminatory viewpoints , and ultimately whether tax-exempt status should be removed .
However , none of the discriminatory groups the shooters were involved in had tax-exempt status . So why is the Ways and Means Committee focusing on tax-exempt groups ?
Reporter Nihal Krishan , writing for the Washington Examiner , explains the move is a cover to target “ socially conservative organizations , anti-immigration entities , and religious groups .” In his article , “ House Democrats call for stripping tax-exempt status from 60 ‘ hate groups ,’” he describes their list of hate groups as follows : “ Some of the bigger organizations on the list include the fundamentalist Protestant group American Family Association , which opposes gay rights , the anti-immigration organization Federation for American Immigration Reform , the conservative think tank the Center for Security Policy , and the socially conservative group the Family Research Council .” 2
Stated succinctly , a “ hate group ” would include any group that holds a biblical view of marriage and sanctity of life .
If you think this view is far-fetched , consider that in January 2020 , Christianity Today published a cover-story by Paul Matzko titled “ The Hidden Cost of Tax Exemption .” There ,
Matzko cited a Democratic town hall where then-Congressman Beto O ’ Rourke was asked whether religious institutions should lose their tax-exempt status if they oppose same-sex marriage . O ’ Rourke responded : “ There can be no reward , no benefit , no tax break for anyone , or any institution , any organization in America , that denies the full human rights and the full civil rights of every single one of us .”
WILL CHRISTIAN SCHOOLS AND ORGANIZATIONS LOSE FUNDING ?
This is not a trivial conversation . Loss of tax-exempt status will mean the loss of funding . As part of these overall tax-exempt strategies , the Amalgamated Foundation started a campaign called “ Hate Is Not Charitable .” The campaign encourages donor-advised fund ( DAF ) entities like Schwab , Fidelity , and Vanguard to stop giving to these so-called “ hate groups .”
To give a little background , DAFs are the most prevalent form of giving in the country , next to writing a check . There are over 700,000 DAFs in the country , representing over $ 100 billion in assets . 3 The danger is that once a fund-holding organization accepts this “ Hate Is Not Charitable ” stance , they will refuse to grant to organizations with biblical worldviews . If successful , the campaign will cut off a significant source of funding . Money from DAFs will be stuck with fund-holding organizations that refuse to give to conservative Christian groups .
Christian schools and organizations need to recognize the pressure placed on the major commercial foundations to stop giving to Christian groups . If your school or your donors have a commercial DAF , it may not be able to fund your school for long . But there are DAF entities more aligned with Christian purposes , such as The Signatry ( thesignatry . com ).
Imagine what would happen if Christian schools and organizations ( and all that they represent ) disappeared ? So much of the good fabric of our country could disappear . These issues are not going away , and the Christian public needs to build this awareness . Now is the time for action to weather the storm ahead . ■
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