Charity or Tax Planning?

Tax policy fascinates me. Had I taken Federal Income Tax earlier in law school than the final year, I’d be a tax attorney. I still spend a day or two every six months considering going back for an  LLM in tax. Still time, I guess.

The business of charity also fascinates me. I have STRONG opinions about nonprofit organizations. One: too many charities exist because people can’t just suck it up and work together. Two: not all charities deserve the favorable tax status afforded by the IRS, the 501(c)(3).

You will find no shortage of substantive discussions of those points of view, and I may attempt to contribute something thoughtful and painfully long at some point, but this evening, I’ll just kick the idea around a bit.

Would people still give to charity if they received no tax benefit for doing so? I believe they would.

If someone gives primarily because of the tax benefit, is that really charity? Can the rest of us afford for the wealthy to get tax breaks through giving to universities and museums with billion-dollar endowments, or should we only give them breaks if they give to charities that create a shared social benefit and relieve some of the burden on the government, like a food pantry that reduces a person’s dependence on food stamps?

I realize that practically speaking, we would bring the country to a screaming halt if we subjected every gift to that test – and that many people very justifiably feel that museums or universities are just as worthy as homeless shelters or food pantries. I’m just trying to outline the argument and get a general sense of where people are on this.

My threshold question:

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