Recognizing Religious Diversity While Advising End-of-Year Gifting

Transcript

ACTEC Fellow Terrence M. Franklin: One-third of all annual giving occurs in December. As trust and estate professionals, we are well aware of the tax reasons for December’s donation popularity, but the end of the year also coincides with faith-based giving. How does a person’s religion impact their giving? Today ACTEC Fellows offer professionals an overview of giving traditions in Christianity, Judaism and Islamic faiths. Moderator Amy B. Beller discusses tithing, Zakat, religious traditions and more with Ray Odom and Jonathan Rikoon.

ACTEC Fellow Amy B. Beller: As we approach the holiday season, we anticipate not only gathering with family and friends, but also sharing with others by means of gifting. Religious traditions of gifting to others endure because they remind us in a tangible way to look beyond of ourselves. Giving helps us to recognize the power that each of us has to make the world a better place. Different religious traditions may use varying terms for gifting – philanthropy, charity, Tzedakah or Zakat. Some faith traditions view gifting as an expression of love, and others as fulfillment of an obligation.

We’ve decided on this presentation for the month of December because of the convergence holidays at this time of year, including, of course, Christmas, Kwanzaa and Hanukkah, and also, the Buddhist holiday of Brohatsu, the Islamic holiday of Maulid Al-Nabi and Solstice, which is a Wiccan holiday, Boxing Day in the UK, and Ōmisoka in Japan.

A 2011 paper entitled “Diversity and Donations: The Effect of Religious and Ethnic Diversity on Charitable Giving,” was published by the National Bureau of Economic Research. The authors took a deep dive into this topic using carefully collected data to support conclusions about giving rates among different ethnic and religious populations. In our estate and trust practices, we may not always consider how religion impacts giving and lifetime gifting decisions and how counseling our clients should take cultural and religious norms and practices into consideration. The purpose of this presentation is to touch upon these issues so that we are mindful of how these issues impact our practices and our clients.

Ray, would you please tell us about the traditions of giving in Christianity?

ACTEC Fellow Raymond C. Odom: Thank you, Amy. Yes, I will. But, before I go there, I’d like to try and encourage our listeners to really embrace and really celebrate the diversity represented by religious practices. My normal practice is to try to encourage year-end giving by talking about tax provisions and tax policy and tax benefits. I think that’s a weak motivation, especially as we see Congress, as well as lots of different things with tax policy, not being nearly as predictable as they used to be. For me, I believe the key is to understand that: of all the charitable giving that’s done, 28 percent is given for religious purposes. That is two times the secondary amount given to education, which is at 14 or 15 percent.

And so, the key for me is understanding that any client who might represent themselves as being Christian has an intention of giving that can be, so to speak, teased out, profiled, encouraged that will take them into areas that will give me a better opportunity to plan and them a better opportunity to give. That’s especially true in an environment where rates of childbirth and grandchildren have declined and we see lots of changes in the 1950’s traditional family.

Well, onto what Christianity would say about this. First and foremost, understanding that Christianity deals with Christ, and as followers of Jesus the Christ, the first thing we have to understand is he was very Jewish. And so, his practice of giving would have been embedded in the Jewish practices that Johnathan will be discussing later. But most importantly, is the fact that Christians all celebrate, even at this time, the fact that Jesus was born into poverty and lived a life that really eschewed the kinds of wealth and other things that many of us take for granted. That point is made only for the purpose of trying to set up the concepts of what charity and giving mean in the Christian context. First and foremost, is the idea of the love of God. Levitical law talks about loving God as the preeminent command. And from that, Christ connected the desire, or the command, to love your neighbor as yourself.

Well, there you have it. This concept of love is fully embraced and embedded in the concept of charity. So, where do we go with that? Well, the key is to understand the concept of philanthropy. Many of you use that term all the time, and when I think of philanthropy, I, a lot of the time, think about museums and hospital wings and other things. But I missed the key understanding of the word, which is really a Greek word, that’s philos- and -anthros. Anthropos, which means first, sibling love, brotherly love, the City of Philadelphia, City of Brotherly Love. Philos- and Anthropos, humankind, the love of humankind. So, embedded in our very secular term, philanthropy is the concept of love. It’s right there.

And so, to do philanthropy is really to be trying to demonstrate a love of humankind. Well, that perfectly dovetails with the Christian concept, because the love of our neighbor is illustrated by Christ in his early teachings. As he’s talking with those who would listen to him (he says) they, of course, asked him the obvious question: “Well, who is my neighbor?”, And then, he gives the story that we refer to as the Good Samaritan Story, which literally talks about a person who was very marginalized in that culture.

Yes, Samaritans were not racially and ethnically, and socially someone that Jesus, as a Jewish person, would have necessarily been hanging out with. So, the reality is, is that what he does is he sets a standard that says you should be very concerned with those who have some misfortune, some of those who are marginalized in that culture or in that society, and those who have a need. And, of course, the person that the good Samaritan is helping, we all realize, was someone who was beaten up, robbed, and left to die. So, this really sets up the whole notion of giving. Now, of course, embedded in that notion is the idea of giving to the church, your regular tithes, offerings and then, ultimately it is about love.

In the most sacred Christian ritual, which is Eucharist or communion, the sacrament, where you’re celebrating the death, burial and resurrection of Jesus Christ, as atonement and forgiveness of all of our wrongdoing. After that ceremony is celebrated, in virtually all Christian denominations and sects, et cetera, there is a time for benevolence. And that is the key word that I wanted to leave with you. It is that concept of doing good. The concept is love, philanthropy, love of humankind. Then, from there we go to this concept of charity. And charity actually, in the King James translation of the Bible, is the word love. It’s interesting because in marriages, Christian marriages, you’ll often hear the officiant talk about 1 Corinthians 13.

Apostle Paul’s celebration of this concept of love and of course, it’s a romantic situation. And so, you’re waiting for the translation to say, ‘But the greatest of these is love.’ But, that’s not really what the King James says. It says, “the greatest of these is charity.” Because in the King James, they didn’t have a good word. And, in English we only have one word for love. So, they didn’t know what to do, so they used the word charity. The point being, that it’s so clearly associated with love. And then benevolence, of course, means doing good, willing good, being good, volition and will. And so, the reality is that, after this Christian ritual of communion, celebrating communion, community, common union and after that, the thing that’s done is to gather a benevolence offering. The idea is that it will be an offering that takes care of those who are poor, those who are in the situation that perhaps the Good Samaritan Story illustrates so well. And so, that is a brief overview of how I think we get to the giving that is particularly and uniquely Christian. And, with that, Amy, we’ll go on.

ACTEC Fellow Amy B. Beller: Thanks so much, Ray. Jonathan, what about giving traditions in the Jewish religion?

ACTEC Fellow Jonathan J. Rikoon:  Sure. First, Ray, thank you for your exposition, and I can reinforce your description of Jesus as having Jewish roots because you quoted him as having said “love your neighbor as yourself.” Which, of course, is him quoting Leviticus, which uses the perfectly good Hebrew word for love, which we still have today: “Ahava.” וְאָהַבְתָּ לְרֵעֲךָ כָּמוֹךָ “V’Ahavta l’rayecha kamocha” means “you shall love your neighbor as yourself.”  Who is  “rayecha”, your neighbor, in Judaism? That is the term generally used for your fellow resident, your fellow congregant, your fellow inhabitant. It excludes the foreigner, who is a threat, but it does not literally mean your next-door neighbor and sometimes it’s translated as friend, but it doesn’t really mean friend. It is much broader than that.

Anyway, back to our main story. What about giving in Judaism? It’s not calendar related in the same way that you might think about end-of-year, we have to make gifts. There are tax motivations for that, of course. There are holidays associated with giving, Hanukkah a little bit in recent centuries. Much earlier than that, Purim, which falls in March, where the book of Esther describes the practice of giving to neighbors and friends. There is a little bit of a differentiation there between neighbors and friends. And, of course, since law plays a heavy role in traditional Judaism, there’s a description of what you include, and how much you include, and when you give it, and what counts and what doesn’t count. So that we have that.

But, uncorrelated to the calendar, there is the concept of tithing. The tithing is, first of all, to whom does one tithe? Well, that’s pretty broad and we’ll see that includes poor individuals, charitable institutions and organizations that provide benefits to society at large. The first example that we have of tithing is Abraham, obviously the progenitor of the three Abrahamic religions, which we’re discussing today. Abraham, in chapter 14 of Genesis, just won a remarkable victory over the superpower of his time, the four kings who had aligned themselves and conquered, essentially, the entire Middle East. He went and rescued his nephew, Lot, who had been kidnapped from Sodom, where he was residing. A very bad choice of neighbors.

Abraham was greeted by the local priest- and we’ll come back at the end and say who this priest was- and Abraham said I’m giving 10 percent of the war booty. And this was a novel innovation, apparently at the time, to the priest to be used for religious purposes. So, that’s the first tithing. His grandson, Jacob, the forerunner of the Jewish people, adopted the practice of tithing a few chapters later in the book of Genesis. And by the time we get to the Mosaic books of Leviticus, and Numbers, we have the concept of 10 percent tithe institutionalized as an agricultural obligation with lots of details about how much and when, and to whom and how that’s calculated.

We no longer live in an agrarian society, but Jewish practice continues to emphasize tithing as, at the very least, a benchmark. It covers 10% of essentially net revenue. There are various ways of calculating it, it’s usually calculated before the end of the year, which of course, surprise, surprise, is Rosh Hashanah in September, not December/New Year. But it takes place throughout the course of the year. And, it does include individuals and qualified charitable organizations. It doesn’t make any difference for these purposes, whether you need to worry about gift tax exemption or the charitable deduction. All of the above qualify for tithing.

How do we know the details of what’s best to tithe? Well, we have as a guidance, the 12th-century writings of Maimonides, a towering figure in medieval Jewish philosophy and law, who also had a great influence in the Muslim world. And he gives us a tiered hierarchy of giving. The best is to assist a poor person to earn a living, whether through an interest-free loan, an investment partnership, a gift to finance a business venture, or helping to find employment. And, by the way, those familiar with the 19th-century New York poverty law will be thinking of the HFLS the Hebrew Free Loan Society, which helped many immigrants with interest-free loans.

The other charitable tiers are to individuals in the Maimonidean construct, that was really before large charitable institutions, other than synagogues and schools. The more favored gifts are more anonymous and more generous and more enthusiastic and the less favored have the opposite characteristics. There is a due diligence obligation, whether the donee is an individual or an organization, to make sure there is no fleecing of the donor and that the uses are suitable.

What’s the philosophy behind all of this? This comes through in many sources, and the philosophy, which is really critical when we’re dealing with our clients and their charitable goals. We, human beings, our clients as wealthy human beings, are temporary custodians of wealth. It comes to us in this view, not only or maybe not even, due to our own efforts and our own brilliance, but at least in large part through divine assistance. That’s part of a heavenly plan, which provides the wealthy with wealth so that they can help the needy, whether it’s on an individual basis, to family members, friends, neighbors, larger society, or contributing to universities, hospitals, museums, schools, synagogues, other houses of worship. All of that is what we are supposed to do as custodians of wealth.

Now, I mentioned Abraham’s original tithing and it sounds like that might’ve been just a gift to a priest in gratitude for something or other. It is traditionally know that the name of this priest was Melchizedek, which means “my King is righteous.” So, the priest, who is also a king (there were lots of kings in those days), he was a king, but his king, the King of kings (i.e., God), was the Righteous One, “Tzedek.” Tzedek is the root of the word Tzedakah, which is translated as charity, but really means we’re doing the right thing when we support those who are less fortunate than us in one of these ways. We go all the way back, charity linked up to Tzedakah, it shows up in the Muslim word, as we’re going to hear in a few minutes, in some of those practices. But it all does root from Abraham and the successive development of these concepts in Judaism.

ACTEC Fellow Amy B. Beller: Thank you, Jonathan. Ray, I know that you know a little bit of something about Islam and the gifting tradition. I hope you’ll share that with us.

ACTEC Fellow Raymond C. Odom: Thank you. Well, I came to understand and try to understand giving in Islam for the same reasons I feel this video was so important. That is because I had a client who was Muslim and he asked me to give him some planning advice regarding his obligation of Zakat. Not only do I have trouble pronouncing it, but I had more trouble trying to figure out exactly what was required. Obviously, being of Abrahamic faith, I thought maybe this was a tithe and that wasn’t quite right. What I was able to find out is that Zakat really is an imperative command that’s embedded throughout the Quran.

It is embedded as an indicator of the righteousness of God and the righteousness and compliance of the person who is serving God. The reality is, zakat actually comes out to be about 2.5 percent of wealth. It’s not necessarily limited to income. As a result, for someone as my client was, who had a sale for like $30 million or so, it was an important amount of money to try and discuss. The key in Zakat is, there’s a priority of giving, similar to what Johnathan had mentioned in his discussion. The priority in zakat is really to start with the poor and the poor is defined. They have clear definitions of who qualifies and who does not.

Then, there’s the needy. The needy are different than the poor. In addition to the needy, there are those who are in slavery or are being oppressed. There is also those who are in debt and those who are in immigration or that are in transition. These things are very important. And again, the concept in Islam is that Allah has given us all that we have. One of the key concepts that I found quite enlightening, is when speaking of Allah, one of the key words that’s used is the word beneficent. Beneficent, that ties to the earlier comment I had made about the word benevolence. It’s this idea of doing good, God is all good and he does good to us.

Really, I thought one of the best ways, maybe to give you an idea of this, is to actually read from a paraphrase of the Quran. I’m going to read to you actually, to be the Quran it has to be in Arabic. So, what I’m reading to you is a paraphrase of the Arabic. I think it gives a sense of what is required and the idea. And so, it says here:

“Indeed, prescribed charitable offerings
Are only to be given to the poor
And the indigent,
And to those who work on administering it,
And to those whose hears are to be reconciled,
And to free those in bondage,
And to the debt-ridden,
And for the cause of god,
And to the wayfarer.
This is an obligation from God.
And God is all-knowing and all-wise.”

This is from Surat 9:60. (The Gracious Quaran A Modern-phrased Interpretation in English Arabic-English Parallel Edition,18th Print © 2007,2008,2009,2014 Ahmad Zaki Hammad, Ph.D.)

I think that sums up really the ideas and the basis of Zakat and how it’s to be given and in a sense, why. I think this gives us a tremendous opportunity as practitioners to shape and suggest and help our clients to do more than just do their annual giving based on some tax law and actually begin to embrace that part of all of us that is really essential to our humanity.

ACTEC Fellow Amy B. Beller: Thank you, Ray. The few minutes we’ve had with you is barely enough to scratch the surface of this topic. Of course, there are very, very many religions that we haven’t even mentioned. Our hope is that this brief discussion is a catalyst for all of us to think about faith-based giving traditions and norms and how gift planning may be impacted. And, most importantly, to be aware that these topics should be discussed with our clients. Thank you for your attention.

ACTEC Fellow Terrence M. Franklin: That was informative to me and will help me understand the differences and similarities in religion-based giving. There is another video in this series, Giving from the Heart, that discusses philanthropy, estate planning and donating with diversity and equality in mind. Take time to educate yourself about end-of-year gifting in different cultural and religious traditions.

Please visit ACTEC, actec.org/diversity for resources on this and other related topics. And be sure you subscribe to ACTEC’s YouTube Channel to be informed of new videos as they become available.