Biblical Financial Literacy: Sharing Money

So far, we looked at the two most important battle zones in our fight for financial freedom: personal productivity (November) and personal consumption (February). Now it's time to consider how we share our own money—voluntarily or involuntarily.

Involuntary Sharing?

Involuntary sharing? You guessed it! Taxes. March and April are taxing times in Canada. If you owe income taxes, you must pay before May 1st to avoid nasty fines. It’s the law. Sadly, taxes are here to stay. Canadians have grown accustomed to all sorts of government services from cradle to grave. It’s the nanny state. Unless we experience a national revival, our taxes will only increase.

I heard it first from John Beckett: “We must have internal government, or we will get external government.” Another way of saying it, “Those who refuse to be governed by God; by God, they’ll be ‘governed’!” It’s really an ancient message clearly stated in the Bible as Israel rejected the rule of an invisible Deity in favour of a visible human leader, just like the nations around them.

The dominant word of 1 Samuel 8 is “take.” Seven times Israel is warned that by seeking more human government, the government will be on the take. The state will take our best. Like it or not, we must share our wealth with the government. More than anytime in Canadian history, we live in a time of government overreach. Until we assume more responsibility for our own welfare, rather than just complaining about too little freedom we will be stuck with high taxation. Therefore, we must use all the income tax reduction strategies possible including investing in

• Registered Retirement Savings Plans
• Tax Free Savings Plans
• Registered Education Savings Plans
• Registered Disability Savings Plans
• First Time Home Ownership Savings Plans (This is new.)

One of the lesser-known ways to reduce income taxes comes with flow through shares. For more than 50 years, the Canadian government has had a program to support the mining industry by encouraging investment in exploration and development projects. This program allows resident Canadians to reduce their income tax by investing in the development of Canada’s natural resources. Investors buy shares of companies that effectively “flow through” their expenses to taxpayers. Flow through shares are best purchased as bundles through limited partnerships. They are a riskier investment and not for everyone. Albertans are allowed to purchase up to $10,000 per year.

There’s another good way to reduce taxes. When we give to Canadian registered charities, we get tax credits of 50%. In other words when you give $100 to a charity, you pay $50 less in taxes. Alberta has the highest provincial tax incentive for charitable giving. It’s part of the Alberta advantage.

As for all Canadians, if you choose your charities wisely (one of God’s five favourite charities* rather than just to any government registered charity), you get many more benefits than just lower taxes. God says, “He who gives to the poor will never want, but he who shuts his eyes will have many curses.”¹ What a great deal. By giving to the poor, we not only reduce our taxes, but we also ensure our economic stability and avoid many curses (e.g. health problems, accidents, other calamities)! It’s a way of making the best of involuntary sharing.

But we need to be careful as we try to reduce our income taxes. The tax tail should never wag the investment dog. We need to beware of making financial affairs too complex and needing to spend precious time and money to manage complex financial arrangements. On the wisdomwithwealth.org website, I show a cartoon character, Tax Driven Ted*, who points to the subtle dangers of tax reduction myopia.

Unlike the last forty years, we are now experiencing high inflation. Inflation is really another form of involuntary sharing since we give away the purchasing power of our money. Inflation is the most insidious and undemocratic form of taxation. Milton Friedman said, “Inflation is the one form of taxation which can be imposed without legislation.”

Thankfully, Canada still has some sensible tax laws that recognize the “supremacy of God and the rule of law” as stated in our Charter. Voluntary sharing is the best way to avoid involuntary sharing.

Voluntary Sharing

When it comes to voluntary sharing, consider it as an investment decision. Give wisely and prudently. Did you know that giving to the rich is dangerous? They don’t need our money. Proverbs 22:16* warns that those who give to the rich, in effect to curry their favour, will themselves become poor.

The sharing that God blesses the most is done anonymously and without any secondary motives such as tax reduction or name recognition. The most powerful acts of generosity will not get our names on a plaque or result in any tax benefits. I suspect that many philanthropists would give much less if they gained no notoriety and no tax benefits from their gifts. The word "philanthropy” is of Greek origin, yet it does not appear in the New Testament. It seems to me that generosity is more God-motivated, whereas philanthropy has mixed motives.

This video is the best example I have ever seen on true giving based on sharing assets or working just to help the community and with no motivation for public recognition or tax reduction. My favorite line was “the grace of giving has replaced a welfare mentality and an entire town was rebuilt.” The crippled lady who gave away her only chicken had no idea that her generosity by faith in God (two mites = one chicken?) would resound around the globe.

Generosity does not depend upon our wealth but upon our attitude. In this case, I disagree with Dave Ramsey’s seven baby steps to financial peace. The way I see it, before a baby takes a step, it first cries and crawls and only then, after much crawling, takes its first step.

Rather than waiting until step seven to “Build Wealth and Give,” I recommend we cry out like a baby to God for help then give $100 to some family poorer than us. Only after this act of charity, go on to Ramsay’s Baby Step One of saving $1,000 in a Starter Emergency Fund. When voluntary giving to the poor is ever present on our financial journey, we can be much more confident of our own financial future. “He who gives to the poor lends to the LORD and the LORD will repay him for his good deed.”²

The Bible gives us more warnings against the popular financial counsel, “Pay yourself first!” Instead we read, “Honor the LORD with your wealth and with the best part of everything you produce. Then he will fill your barns with grain and your vats will overflow with good wine.”³ Canadians must stop looking to small-g government and start looking (and obeying) big-G God. His mysterious power bursts onto the scene when people give out of pure motives. He is rich enough to turn around any jurisdiction, be it a small village in Africa or the vast nation of Canada.

For those who want to do some serious thinking about voluntary sharing and who are concerned about a great global financial reset go to this article Dodging the Great Reset or look up Generous Genevieve. Generous Genevieve gives for the sheer thrill of it and prefers to give in secret without anyone else knowing because that makes it even more thrilling.

In my opinion, wise charitable giving is vastly underrated in today’s financial planning literature.
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Footnotes and Reference

*Links marked require registration on Wisdom with Wealth to access.

¹Proverbs 28:27 NASB

²Proverbs 19:17 NASB

³Proverbs 3:9-10 NLT

Tom Lipp