Two weeks ago, at the annual National Prayer Breakfast, President Trump stated he would “destroy” the Johnson Amendment.
As a Senator in the 1950s, LBJ wrote legislation that when passed, was attached to the IRS regulations that impact not-for-profit organizations as well as houses of worship. One of the IRS rules created by this legislation was to prevent religious leaders from endorsing candidates “from the pulpit”.
This is always an issue around election time. Movements like “Pulpit Freedom Sunday” have encouraged ministers to give a sermon on a particular Sunday in support of a presidential candidate.
Clergy acting as individual citizens as opposed to leaders of a house of worship are allowed to endorse candidates. Think back to “Rabbis for Obama”, “Rabbis for Hillary”, and even “Rabbis for Trump”. It is certainly something that can be a bit of a blurry issue.
In the scheme of things, introducing legislation to get rid of the Johnson Amendment seems to now be a low priority. Events in Washington in recent days will not only dominate the news cycles in the coming days, but also no doubt push “destroying” the Johnson Amendment to the back burner.
But it will emerge again as an issue as the 2018 Congressional and state elections are in full swing. No doubt, according to current reports, there will much resistance in Congress by both Democrats and some Republicans.
Should the discussion ever move forward from the press and blogosphere to the floors of the U.S. House of Representatives and Senate and become law, regulatory requirements may become more stringent for synagogues and all houses of worship. Right now, religious organizations are not required to complete a 990 for the IRS, a tax return form for not-for-profit organizations. Whether an audit is conducted is completely by choice. When synagogues become more involved in politics where clergy are allowed to endorse candidates, official financial filing rules may become more of the norm.
This may be a minority view, but I actually think more financial regulatory requirements will be of benefit to synagogues. Houses of worship get a pass in terms of 990 IRS filings, unlike not-for-profit organizations, due to the separation of church and state. Unless a synagogue is applying for a grant from a foundation, no one is making a synagogue undergo an annual audit.
Board members actually have the same fiduciary responsibility regarding the management of the synagogue’s fiscal affairs as board members do for other not-for-profits. So an annual audit is a good thing. And in the spirit of transparency, it is something that can be shared with the congregation via email and even posted on a synagogue website website.
There are synagogues and other houses of worship that are multi-million dollar endeavors. The neighboring YMCA with a $2 million budget has to file a 990 to the IRS and engage a CPA to complete an annual audit. The church or synagogue down the street with a similar-sized budget is exempt from such requirements.
Completing an annual audit and sharing it lets congregants know that you are good stewards of the community’s funds. Put aside the possibility of submitting a grant proposal to a foundation for a moment. Good stewardship will lead to good dues/annual commitment collections as well as successful future capital and endowment campaigns.