In Part 1 of this article, I summarized the plight of a relative of mine whose husband of 34 years, until recently a pastor in a well-known Reformed denomination, committed adultery and expressed his desire for a divorce. His new job presents an uncertain income, they have few assets, and her capacity to earn income is limited. On top of the pain of the divorce, this woman is now dealing with a financial disaster. As my family has attempted to help in this situation, we have tried to think Biblically about the role of the family and the church in charity.
Recognizing that the family is the first recourse in the event of financial hardship (from 1 Timothy 5:16), what should the church do when it assists a needy person? In Part 1, I proposed the first two of three principles that could inform church charity. (I would not begin to suggest that these are the only principles; there are many others that could be much more important.) The first principle I suggested is that the church should actually provide the charity, rather than serving merely as a gateway to state welfare programs. Second, charity should be conditional — the recipient should be expected to make discernible “progress” in the spiritual disciplines, and the charity should be administered in such a way that leaves few opportunities for the charitable resources to be misdirected.
Act Locally The third principle I would propose is that charity should be local, as much as possible. Roman Catholics might see in this the principle of subsidiarity — the need should be dealt with by the governing body closest to the person concerned. Whether we want to adopt the term subsidiarity or not, the important thing is that the needy individual be cared for personally, by people of the local church or immediate family. This avoids the inevitable difficulties in monitoring the changes in the situation from afar. Assessing the spiritual or material condition of the recipient of the charity and responding in ways that meet specific spiritual or material needs requires on-the-spot care.
The Reformed denomination involved in this case has a fund set up primarily for the relief of needy retired ministers and their families. I suspect most denominations have similar funds. This denomination’s fund will provide up to twice the federal poverty level in money to qualified applicants. For a household of one person, the poverty threshold for 2004 is $9,310 per year, so this works out to a maximum of $18,620. For two people, the threshold is $12,490, so the maximum would be $24,980.
There are several problems with this arrangement. One problem is that the funds are administered by a central office at the denominational level. This works against adequate oversight. If the local church is enlisted to help oversee the charitable provision, it adds another layer between the source of the funds and the recipient. Another problem, much more severe, is that the amount of money provided to the recipient decreases as other sources of funds become available to the needy person, dollar-for-dollar. This means that if the needy person gets a job and earns $10,000 in a year, the denominational assistance will be cut by $10,000. For a single individual, with total potential assistance of $18,620, this is effectively a 100 percent tax on the first $18,620 of earnings. This is a serious disincentive to work, particularly for those individuals whose income-earning capacity is not much more than $18,620 a year.
Of course, each person who is capable of providing some part of his own support through work is expected to do so and to reveal this to the denominational fund administrators. But in marginal cases, where capacity to work is questionable because of health or other limitations, the charity recipient is given a strong incentive to err on the side of less work rather than more. A person with good character might resist the temptation generated by this system, but why should Christians set a person up to be so tempted? Furthermore, this system penalizes increases in productivity. Suppose there is a chance for an individual charity recipient earning $12,000 a year to go to school and gain a skill that might allow earnings to increase to $18,000 a year. The current system penalizes such initiative by promising a reduction in benefits equal to the entire gain in income. Do Christian churches really want to penalize hard work and self-sufficiency?
Charity by its nature must eventually reduce aid as other resources become available to the recipient, and so there will always be some disincentive to work. However, almost any method would be an improvement on a 100 percent “tax” on earnings. One possible alternative would be an earnings-matching system, which would match the individual’s earnings at a specified ratio, the ratio to be determined by the total of other sources of income available. Every dollar earned, therefore, would be matched by, say, fifty cents from the relief fund. The “work subsidy” would be gradually phased out as total income increases. This does not eliminate the problem of determining ability to work, and this method would not be suitable for those unable to work at all, but at the least it provides a reward for labor rather than a penalty. It is also entirely possible that someone able to work who is eligible for aid under this system would receive no aid if he refuses to work at all. This is consistent with the Biblical mandate for conditional charity.
But these improvements I suggest really do not reach the heart of the problem. Formulas and bureaucratic procedures become more necessary the further the source of the assistance is from the recipient. The more localized the administration of the charitable assistance, the less need there is for these cumbersome complications. On-the-spot care, such as that provided through the family and the local church, has the benefit of being able to discern the nuances of particular situations and make much more informed judgment calls. Some of the most important information needed in administering charity cannot be compressed onto a form sent to a central office.
These are only suggestions. In the case in which my family is now involved, it is something at least that the denomination seems willing to offer some assistance. No church will be perfect in its dealings with charity, but the church has a responsibility to learn from its mistakes and consider the economic incentives provided to those under its care.