2 Questions About Giving from Gross or Net Pay

Dear Jack,

One of the most frequent questions I’ve experienced in the world of biblical giving (the word ”giving” used intentionally instead of “tithing”) is whether we should be doing our giving off of our gross or our net pay.  This is a legit question, and one I appreciate because it shows the commitment of the ones asking to be intentional about their stewardship plan.

My response to the question isn’t very cut and dry, to be honest.  It depends on a lot of things.  Most Americans receive their income through a W-2, meaning that they’re paid pretty regularly for their time/services, and the difference between their gross and net pay is going to be pretty close to what their individual tax bracket is, depending on the amount of deductions they can claim for any given year.  Small business owners have a more difficult time with this, as do individuals who receive large amounts of interest from investments.  And I’m not going to spend time talking about all the relative factors that would play out in these scenarios.  Instead, I’ll get to the main issue at hand.

The idea of gross/net income is actually relatively new, as payroll withholding taxes were only introduced in the last 100 years or so, a long time after the idea of giving (and, dare I mention, “tithing”) began.

What I’ve found more valuable than a standard response is answering the question with some more clarifying questions, such as these:

1. Are you saving from your gross or net pay?  What I mean by saving is any money going towards a short or long term goal (retirement, college, car replacement, etc.)  Many people save money into their company-sponsored 401k or 403b plans – and this money is saved “pre-tax” from their paychecks.  This means your final paycheck amount made payable to you is already a net figure.  The ratio of how much we’re saving versus how much we’re giving is a key indicator of if we’re investing in earthly or heavenly treasures.  And to get a good idea of what this ratio looks like, we need an apples-to-apples comparison of our saving and giving.
2. Are you trying to find the minimum amount “required” to give?  This is the big question.  As much as I appreciate people being intentional about giving plans, a potential flag is raised in my mind about their true intentions when asking if they should be giving from gross or net pay.  If we’re looking to find ways that lower our “required” giving, our heart isn’t in the right place, and this is serious cause for concern.  Evaluate your heart before you go any further – and if you find that you’re truly just looking to find ways to minimize your giving amounts, then I’d strongly encourage you to read and think about 2 Corinthians 9:7 (“…each one should give as he has decided in his own heart, not reluctantly or under compulsion, for God loves a cheerful giver.”).  I wouldn’t be concerned right now as much about the giving amount as I would be about finding out what is right in your own heart, and then being joy-filled in giving that portion, not feeling compelled to.

I think the reason these questions are so valuable in answering the gross/net pay issue is that they’re personalized to you.  It’s not a cookie-cutter answer.  Personally, we give off of gross – because our monthly budget is set up on gross pay.  I build the pre-tax withholdings (local tax, federal tax, FICA, health insurance, all the good stuff) into our spending plan for the month, and have a separate column showing the percentage of my gross pay that each category (including taxes) consumes.  This way I can have an apple to apple comparison of my savings percentage, tax percentage, giving percentage, entertainment percentage, housing percentage, and so forth.

 

The key, as you can see, Jack, is evaluating your heart.  I’m under the firm conviction that God is less concerned about how much we’re giving than He is about the condition of our heart (this is true of things way beyond finances).  Evaluate your own heart, and then the question of giving from gross or net pay should become evident.  Till next time, Jack,

Sincerely,
J.

Thoughts on “Giving” versus “Tithing”

Dear Jack,

I’m not sure I’ve ever been so overwhelmed with thoughts before sitting down to write you a letter.  I feel like I need to give so much context to my thoughts – my full understanding of stewardship, my idea of what it truly means that God owns it all, even my personal hermeneutics in reading the Bible.  But we don’t really have time for all of that, so I’ll fill in the gaps as needed.

What I want to address is the difference, a potentially HUGE difference, between an understanding of “giving” versus “tithing.”  My good friend Daniel brought this up concerning a previous letter I wrote to you.  Specifically, he said:

In one of your replies above, you wrote, “…giving to God is inclusive of anything he’s using to redeem the world around us (including us), of which the Church is a big part of. A distinction between give/tithe is intentionally used in this instance.”

I would be very interested in more of your thoughts on this (perhaps another post sometime?). I find “giving” much easier and more fulfilling than “tithing.” I definitely give more to non-church charities than I do to my church itself.

Also, where does “Christianly” consuming fit in to this? I try to use ALL my money in economically just ways. That’s why (for instance) I don’t shop at Wal-Mart, and support local businesses as much as I can. It’s more expensive to buy things that weren’t made in sweatshops, or have less impact on the environment. But I know plenty of people who save money at Wal-Mart and then can afford larger gifts to the church. Is one more pleasing to God than the other?

Phew… the overwhelming factor hit me again.

Daniel packs a lot into this.  As always, I want to try to simplify and examine.  First, I think we have to actually take a step back and look at the bigger picture.  As a Christian, I believe that God owns everything.  Every.  Thing.  My checking account.  My Jeep.  My student loan.  My wrist watch.  It’s all His – I’m just being a steward of it.  And when I say steward, I mean I’m just taking care of it from a temporary standpoint … figuring out how to best use someone else’s “stuff” the way that I best think they’d prefer it to be used.  This is really where any concept of “stewardship” needs to grow its roots in.

So, instead of asking “How much money should I give to God?  10%?  15%?” we need to say “God, 100% is yours.  What do you want me to do with it?”  There’s no right answer to this question – it’s completely unique to each individual and family.

Now, let’s look at what a “tithe” is.  Without getting too in depth and bringing up all of the verses (I’ll just refer to the website of another good friend and fellow financial planner – Paul) my basic understanding is as follows.  In the Old Testament, where we were under the Law, we were required to tithe (give 10%) (and then tithe on the remaining amount, and then tithe every 3 years on top of that).  Had to.  No questions asked.  It was, literally, the Law.  Fast forward to the New Testament.  Jesus Christ, the savior whispered about in every Old Testament passage, comes and dies for us so that we no longer are enslaved to the Law.  We are free.  We’re no longer required to offer blood sacrifices to cleanse us from our sins – Jesus did that.  All of the laws, the codes, the interpretations, the sacrifices required … they’re all fulfilled because Jesus died for us.  This is the gospel, in its simplicity: grace.  Undeserved, unmerited grace.

Stick with me, Jack.  So now that we’re not required to follow the Law, does that mean that we’re free to sin and to live as we please?  Paul (the apostle Paul, not financial planner Paul) says in Romans 6 “No way!  Are you nuts?  In fact, if anything, if we understand the gospel fully, we should be all the more inspired to live holy lives.” (Loose, very loose, paraphrase).  Jesus even took the Law in several places up to a new level (Think Matthew 5.21-48).  So, what on earth does this have to do with giving?

We’re no longer required to tithe – but instead are urged to do even more, because we know first hand the generosity that Jesus had on the cross.  That is why giving is so much better of a word, and one that I wish the Church would be using exclusively instead of interchangeably with tithe.  A tithe, a literal 10%, is archaic.  It’s Old Testament.  It’s Law-bound.  Is it a sin to give 10%?  No, not at all.  I’d say it’s just as biblical as giving 3% or 50%.  The number isn’t important.  The motivation and generosity portion of it is.

Getting back to Daniel’s question, I loosely defined giving as “inclusive of anything [God]‘s using to redeem the world around us (including us).”  I think this is a fair definition of the word – but it’s as good as I can think of right now.  Now we need to link some of my thoughts together: God owns everything, we are stewards of all these “things”, we’re not required to give any fixed amount, and we should be as generous as Jesus.  What does that leave us with?  A lot of freedom, and a lot of responsibility.

I think that we should be generously giving to causes that we feel God is using the redeem the world around us.  If you sense God redeeming the world through your local church that you worship with, give freely to that.  If you sense God redeeming the world through fine charities like HOPE International, donate freely to that.  If you find God redeeming the world through local business owners, purchase freely through them.

Personally, I believe whole heartedly in the leadership at our own local church, and we give a majority of our giving percentage to that.  But I also believe strongly in HOPE, Compassion International, and having designated fellowship money to invite neighbors, friends, and family over for meals.  Is setting $50 a month aside so that we have enough to invite our neighbors over for dinner found in the Bible?  Maybe, maybe not.  I certainly won’t be able to write it off as a tax deduction.  But that’s missing the point.  The point is individualized generosity.  That’s the example that Jesus gave us in the Bible, and that’s the example that we should be setting in our giving.

I’ve written enough – and my head is spinning, so I’m sure yours is as well.  My take away is this, Jack: be generous.  You’re not bound by the Law anymore.  Be a good steward of what God’s entrusted to you – and give as you feel He is directing.  Till next time, Jack.

Sincerely,
J.

The Church Should Stop Tithing

Dear Jack,

Okay, this letter heading is admittedly a bit deceiving, but you’ll see what I’m saying soon enough.  My point is that in recent conversations with clients, friends, and family, I’ve realized that the goal of giving a tithe (literally a “tenth”) has done violence to a biblical understanding of money.

First off, a few points of clarification.  The commandment to give a tithe isn’t found in the New Testament.  A tithe was given in the Old Testament, but even that wasn’t necessarily 10% of your income… it was more like 23.5%.  (Really it is – but that’s a whole other conversation).  The New Testament rather talks about giving generously and freely as the Lord/Spirit directs us to.  It’s about radical generosity, something that I wish the Church (big C) was universally known for.

According to a Pew study, the average church goer gives something like 2.3% of their income.  And so then, whatever giving amount we’re doing, if we strive to give a tithe (one tenth) of our income, what happens when we reach this?  From my conversations recently, it seems that this is the ultimate goal: to work up to giving 10% and capping out there.  If we’re in a job situation that provides an increasing amount of income, I’d sure hope that the 10% giving budget line increases incrementally with the top line income.  Giving $3,000 while earning $30,000 is much more of a sacrifice than giving $10,000 while earning $100,000.  As our income increases, so should our giving percentages (not just dollar amount).  I think we pigeon-hole ourselves when we have a goal to give a “tithe,” and I’ve found that the Church encourages this by constantly referring to financial giving as a tithe.

The idea of a tithe subconsciously relays to us that if we “give God 10%” that means we have the remaining 90% to ourselves.   This is a powerful concept, and one that often goes undetected.  God owns 100% of all that we own – not just the bones we throw back at him.  God owns everything, and he cares about what we do with this everything.  I’m not at all a proponent of the poverty or the prosperity gospel – I firmly believe with all of my heart that we can honor God equally with our wealth whether it’s through two dollars, or a few billion dollars.  I think oftentimes Christians give their tithe (or whatever percentage) and then check off their duty of seeking God’s direction with what to do with the rest.

So what are we to do?  Here’s a couple of ideas to hedge against falling into the dangers of pigeon-holing ourselves into a faulty understanding of tithing:

1. Give radically.  Right now.  As in now.  Don’t wait till next year’s raise or until your retirement savings are started.  Decide to get radical with your giving.  Now.
2. Give outside of your home church.  Find some charities that you really get excited about supporting and give to them.
3. Keep some cash earmarked to give away.  As you see needs in front of you, give as prompted.  Don’t turn away a hungry mouth and say “You know what, I’m not sure if you’re going to buy alcohol with this – so I’m going to go home and pray about what I should do.”
4. Pray about what to do with raises and unexpected income/gifts before you spend them.  I’m hesitant to paint with too broad of a brush, but I’m inclined to say that for each raise you receive through work, your giving percentage should increase.  Okay, I ended up saying it.  Do it.
5. Don’t aim for 10%.  Don’t short change yourself (and Kingdom-building purposes) by aiming low and striving to give 10% of your income.  Start there – or higher – and see who can out give who: you or God.

Sincerely,
J.

A Biblical Understanding of Money

Dear Jack-

Continuing on with the Kingdom Advisors training that I referenced to before, I want to share with you what Ron Blue defines as a biblical understanding of money.  It is essentially three things: a tool, a test, and a testimony.

Money is a tool. All of money is God’s money.  Not just the 10% or whatever amount we decide to “give back” to Him. And knowing that He owns it all, we can realize that He wants us to use the money to accomplish certain goals and purpose.  This can be as common as providing food for your family, or as uncommon as paying for the adoption of a child for another family.  It’s a beautiful thing to think about: God could have just kept all His money in His own bank account, and given money out as He sees needed, but instead gives the money into our bank accounts, and directs the money from there.  He uses us to do His work.  Stewardship defined.

Money as a test. The parable of talents in Matthew 25.12-30 shows that how we handle money has truly eternal consequences.  Luke 16.11 talks about us being entrusted with greater riches if we we are faithful with the unrighteous riches we’re given in this life.  I believe that God uses increases and decreases in our net worth, liquidity, investments, etc. to see how closely we’re walking with Him.  If we receive a raise at work, do we give Him the honor, or congratulate ourselves?  Conversely, if we lose our job or our home, do we blame Him or ourselves?  What is the spiritual impact that our financial circumstances have on us?

Money as a testimony.  Matthew 5.13-16 records Jesus talking about His followers being salt and light of the world.  We are to stand apart from the world, and money, perhaps, is the largest stage that this difference can be played out.  How we make spending decisions, how much money we give, how generous we are with others, how money defines (or doesn’t) define our level of success … all of these are examples of how we can be different from what the world around us expects us to be.  There is a saying that our bank statements are a fantastic way of gauging our spiritual well being, and I’d agree.  One of our attorneys who we work with begins the wills that he drafts for believing clients with a declaration to the Lord, saying that everything the client owns (and is now giving away) belongs first to the Lord, and that the Lord is responsible for all of the wealth or lack of wealth.  What a fantastic way to use money as a testimony.

Conversely, money is not a number of things.  Money is not a measure of self-worth.  It’s also not a reward for godly living (Hebrews 11 mentions nothing of money, and a lot of those saints died quite broke).  Money is also not a guarantee for contentment.  And perhaps most importantly, money is not a measure of success.

As a believer in general, these principles are powerful.  But even more so as a financial planner, these principles help me direct clients to a better, more eternal, more biblical understanding of what money is.  A tool.  A test.  A testimony.  We’d do well to remember this with each financial decision we make.  Till next time, Jack.

Sincerely,
J.