Magazine article The Christian Century

When Creditors Come Calling: Refunding Tithes and Offerings

Magazine article The Christian Century

When Creditors Come Calling: Refunding Tithes and Offerings

Article excerpt

In a startling assault on the First Amendment, creditors of a bankrupt parishioner have successfully sued his church for a full refund of his past tithes and offerings. In Cedar Bayou Baptist Church v. Gregory-Edwards, a Texas court has ordered repayment of some $50,000 in contributions, some of which were received and spent ten years ago. The case is the latest of a rash of decisions m which churches have been forced to return past tithes and offerings to third-party creditors. A store cannot be held liable by the creditors of a regular customer who goes bankrupt--the store owner sells his product and receives the customer's money in exchange. Yet churches are told that in exchange for their contributions their members receive nothing that would constitute "consideration" under the bankruptcy code. The contributions are therefore considered fraudulent and subject to being set aside.

Unlike most decisions adverse to the interests of organized religion, this one has implications for every church and synagogue. And, depending on the donor and the size of his gifts, the impact on a local congregation could be devastating.

The right of churches to carry out their mission and ministry without undue interference from the government is fundamental to the free exercise of religion. Nothing could be more essential to the exercise of this right than the knowledge that when gifts are given in good faith, churches can share them in good faith. Without this assurance, churches are paralyzed. The Cedar Bayou decision casts a pall over the legitimacy of every contribution made to a church.

Whether it be the widow's mite or the corporate executive's millions, churches should not be forced to return past tithes and offerings. Otherwise no church will feel secure in giving its resources back to the community in acts of Christian service. Instead, a chill will descend upon this most fundamental exercise of faith as churches begin to hoard funds in order to protect themselves against the likelihood that creditors of a member might sue. After all, virtually every church has one or more members who have filed for bankruptcy, and most of these members have contributed to the church.

Most congregations have a single paid staff member (the pastor) and a budget of less than $10O,000. For many church groups, such as the Baptists, each of their congregations is on its own and is unable to draw on a central fund to satisfy its legal obligations. A judgment of the size rendered against Cedar Bayou Baptist Church could easily bankrupt a church, resulting in severe infringement on the free-exercise rights of an entire community. Ironically, it is the larger community that ultimately will suffer. If this decision is allowed to stand, there will be less child care, less marriage counseling, fewer soup kitchens and shelters, fewer youth programs and, ultimately, less religion. …

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