<p>Question: We have always tithed to our church, and we give money to many charities, so we are thought to have more money available than we actually have. This is NEVER taken into consideration in any financial aid info I have seen. Is there any way to have our substantial donations considered when seeking aid? Unfortunately, […]</p>
<p>I’d add that this argument might carry more weight at a school with a religious affiliation similar to the beneficiary of the charitable contributions. Other colleges may consider the largesse merely another way of disposing of income that could be better spent on educating one’s kids…</p>
<p>Yes, this was a concern for us too. It’s a tricky situation. As Christians, we know that tithing is the right thing to do since it is in accordance with what the Bible teaches. Therefore, while it may seem to be an optional expenditure to those outside the faith, it really isn’t for us. For us, it’s a moral imperative.</p>
<p>At the same time, we certainly can’t expect college finaid people to give us credit for tithing either. It doesn’t matter though. This is a sacrifice of worship to God. If we got credit for it, then it wouldn’t cost us much and would be less meaningful, right? In addition to supporting the work of the church, I believe one purpose of the practice is to prevent us from getting too attached to money and possessions and to keep us mindful that everything we have is ultimately God’s. The truth is that we are dependent on Him for everything–including the money for our children’s education! God will provide what you need.</p>
<p>So, my advice to you is put that money out of your mind as though it was never yours…because it wasn’t.</p>
<p>Wouldn’t god understand if you wanted to send your child to the best possible education opportunity? Forgive my inability to relate, but isn’t this a choice between your own child and your religion? It really appears to be, and I must admit I’d always put my child first – just my opinion.</p>
<p>That being said, giving a credit for donations is counter-intuitive: typically, individuals who are capable of making charitable donations are the wealthier group of citizens.</p>
<p>Northsider - not necessarily true. Studies have shown that percent donated out of total income is extremely high at low income levels, pinches as it rises into the middle class, and then increases again as it enters the upper strata of the middle class. Sort of as an hourglass. If you think about it, it makes sense. The rich have plenty of money to give, whereas the middle class are striving to get higher and feel as if they don’t have any disposable income to donate (everything for a house, for example), whereas the poor sympathize very deeply, and while each contribution may not be much it’s a large part of their income.</p>
<p>In the most respectful possible way, nobody ever said it was supposed to be easy or financially convenient to be an observant follower of a faith. Think back to the early Christians - many of them were martyred in the arena. Makes having to pay more for college seem inconsequential?</p>
<p>Sorry, but I can’t see why there should be credit for tithing, or any contribution to an organization. </p>
<p>Let’s say I am a passionate enviromentalist, and I give 10% of my income to a worthy enviromentalist organization, which I hope will benenfit my own well being, the future of my family, and the future of the world. This is a fine thing to do, with the best of motives, but it still a discretionary act - I choose to do this. </p>
<p>Should a college give me credit and reduce my required family contribution based on this action?</p>
<p>Now let’s say I take that same 10% and instead contribute to some hate group, something like a neo-Nazi organization or the KKK. It’s still discretionary, and let’s say that I believe in the goals of the organization (I don’t of course, I’m just trying to explain how complicated this is.) </p>
<p>Should the school give me credit for this charitable contribution? </p>
<p>The problem is that as soon as we ask the schools to start considering what is “good” discretionary spending vs “bad” discretionary spending, it gets very difficult. My list of favorite charities may be the Sierra Club and Greenpeace, the next person’s a religious group, and the next person’s the a local club for kids. How should the colleges know and track all of these? And do we really want them passing judgement on how worthy our contributions are?</p>
<p>For the most part, financial aid based on your obligations makes sense. I.e. you have an estimated cost of living, you have to pay your taxes, etc. etc. Any money left over that might be available for paying your child’s tuition. It’s up to you and your family how to allocate that. If your religious beliefs indicate that paying your tithe is your first obligation, then that is your choice, which you and your family can factor into decisions about college.</p>
<p>The FAFSA and Profile calculations of EFC are designed to squeeze as much money as possible out of the families. Basically, beyond certain living expenses and taxes, every additional cent we earn, have in savings, have in home equity, are likely to earn in the future, the kid is likely to ever earn in the future, etc., are considered to be available to pay for the cost of higher education. This is the reality that all of us parents have to just accept once and for all. Each family has to figure out individually how to live with that. </p>
<p>In our case, for example, the FAFSA calculators that I have run indicate that FAFSA will estimate that we have $22,000 available for the EFC. Happychild has two parents now aged 50+ who put $6,000 into their IRAs this year, and a grandmother whose partial support this year is expected to be about $10,000. This adds up to precisely $22,000. There is no home equity, because we are renting. There is only about $140,000 total in retirement funds (401-k and IRAs). Since we began to contribute to grandma’s support, all charitable giving was halted. And yes, we are tightening down the belts this year (10th grade) to see just how hard things are going to be when happychild hits college.</p>
<p>Each family makes its own financial commitments. Some tithe. Some support grandma. Some put money away for retirement. Some buy houses. Some save for college. Some manage to do all of those things. In the end, each family has to live with its own decisions. In our case, what grandma’s support (and all indications are that the amount we contribute will have to increase with time) has done to the budget has taught us that our retirement funding should come first. This may mean that happychild can only go to a commuter school rather than the LAC of someone’s dreams, but that is a reality that we have to accept. </p>
<p>If a family feels compelled to tithe, and that decision affects how much cash is readily available for college funding, that is that family’s business. No whining is allowed about it any more than we are allowed to whine about how our choice help to support grandma affects our cash-flow.</p>
<p>Financial aid people don’t want to get into making value judgments about families spend money. Some might consider church donations to be “better” than, say, donations to a political candidate or animal shelter. Or than payments on a Lexus. Others might lump all of those items into the same category - income spent on non-essential things. So, colleges can’t really look too hard at the categories of expense.</p>
<p>The inability of financial aid types to make any value judgments at all creates problems, too. In one sense, families that live under their means and salt away money for college are penalized at aid time compared to families that spend a lot and save little. (At the same time, most of the gnashing of teeth I’ve been hearing lately hasn’t been from penalized savers, but rather from middle class families who found their income-based EFC was unaffordable without substantial college-fund savings.)</p>
<p>'Yes, this was a concern for us too. It’s a tricky situation. As Christians, we know that tithing is the right thing to do since it is in accordance with what the Bible teaches. Therefore, while it may seem to be an optional expenditure to those outside the faith, it really isn’t for us. For us, it’s a moral imperative."</p>
<p>I’m guessing schools see it as optional because you could instead contribute via volunteering etc, rather than solely through financial means. So yeah…I know what you mean ( I’m a catholic, and I contribute regularly during church collections etc), but I guess God would understand if you reduce your donations in order to put your kids through school.</p>
<p>People have many personal imperatives that colleges don’t want to hear about. One person’s “faith” is another person’s “myth-based irrational belief system.” Even among believers, the concept of tithing is practiced by a relatively small number.</p>
<p>A more secular imperative might be a mom or dad who works in selling financial services and feels the need to drive a costly Lexus or Mercedes to use for entertaining clients and present the desired image. It might even be “necessary” to live in an appropriate luxury home that would allow frequent in-home entertaining of clients and potential clients. Maybe true, maybe not, but colleges won’t give extra points either way.</p>
<p>With few exceptions (e.g., medical expenses) colleges don’t want to know what you do with your income. Spend it, save it, or give it away… they just want their share of it.</p>
<p>Completely agree with you, Roger D. There’s no way this type of thing should factor into financial aid decision-making and I would never expect a college to treat this spending any differently from other discretionary spending. Besides, I’d much rather be given “credit” for generally living frugally and trying to save money for college rather than blowing lots of cash on luxury gas-guzzling vehicles, expensive vacations, gourmet coffee (apparently that’s a common source of budget-ruining spending!), and the gamut of self-indulgent pleasures. Frankly, as pointed out above, the system can sometimes reward irresponsible spenders over diligent savers and that’s unfair.</p>
<p>^^^ yes but the rules have changed, they(IRS) may request copies of cancelled checks or statement from church to “prove” that you have made those donations weekly.</p>
<p>And the problem with proof for a tax deduction is? </p>
<p>If I need to itemize my medical expenses on my taxes, I don’t see it as unreasonable to be able to show that I actually paid for the medical care I’m claiming.</p>
<p>Same thing if I donate to a local charity. Why shouldn’t I have to show a receipt for my donation? And that it’s a donation, not a payment for service? </p>
<p>For example, some charities run day care, and add a donation to the weekly fee. Only the donation is tax deductible, not the entire amount of day care. (Although this is a tricky example, because day care also has some tax implications.)</p>
<p>Another POV on this topic that I’ve been thinking about is that families that place a high priority on charitable giving may well be very good investments for colleges. In my experience, families that give - be it to the church, the school booster clubs, the local humane society, hospital guild, etc. are probably very likely to add the college’s 501(c)3 and related entities. </p>
<p>I know I give a large percentage of my income, though it’s a small amount in the grand scheme to various charities that have touched my son and I in different ways. I’ve already decided that this coming fall, instead of the usual donation to the PTA, I’ll be writing that check to one of the funds at his college. I’m also good at fundraising, (and know folks with deeper pockets than I have) so I’m thinking of ways to have them contribute to the college. </p>
<p>Maybe I’m missing something here, but if the tithing and other charitable donations are tax deductible, that reduces the AGI, and that in turn should reduce the EFC. Thus, you would get “credit” for tithing.</p>
<p>I’ve been thinking more and more about this since I saw the first post. And I find that I have a problem with the original poster’s assumption that just because their family has been making sizable charitable donations all along to various organizations, they believe that other people who they probably don’t even know should be the ones whose sizable charitable donations will fund their child’s education.</p>
<p>Does it not make more sense that this family should do what they can to educate their child for four years and drop those organizations for a while? Can they not consider that the “charity” they need to contribute the most to is their own child’s well-being?</p>
<p>I know this requires reorganizing one’s thoughts a bit. We went through it when we became responsible for happygrandmother’s financial support and had to eliminate all previously habitual charitable contributions in order to balance our budget. I look on it as giving directly to the most needy cause.</p>
<p>“Maybe I’m missing something here, but if the tithing and other charitable donations are tax deductible, that reduces the AGI, and that in turn should reduce the EFC. Thus, you would get “credit” for tithing.”</p>
<p>You’re right. Also, to the extent they gave it to the charity, they don’t have it to be counted as savings, either.</p>