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View Diary: A Business View of Charity (25 comments)

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  •  That's just silly. (1+ / 0-)
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    The charitable deduction is NOT based on the motivation of the giver -- not for when you give money, not for when I give money, not for when ANYBODY gives money.  The tax laws are not written that way.  Instead, the tax laws are written based on the identify of the RECIPIENT of the money -- if the organization qualifies as a 501(C)(3) under the tax laws, for example, you get a charitable deduction regardless of why you decided to give that money.  

    There's no other way to enforce the tax laws.  You can't POSSIBLY have a tax system where the IRS scrutinizes the reason for giving to a 501(c)(3).  First, of course, that would violate the First Amendment.  The charitable deduction has to be based solely on measurable, identifiable, content-neutral bases or it violates the First Amendment.  Second, from a practical perspective, how do you do that?  Let me tell you how silly it is, both for individuals and for companies.  Even individuals give away money to charity for the "wrong" reasons.  Some rich people leave a bunch of money to charity in their wills not because they are charitable but precisely to hurt what they perceive as ungrateful kids.  Should the estate pay taxes on that?  How do you know what the motive is?  How do you know that a person hasn't given a bunch of money to Planned Parenthood just to upset his cousin who is an ardent pro-lifer?  The tax laws don't care WHY you give money to a charity.  If  it's a charity -- if it qualifies under section 501(c)3, for example -- and you give money to that organization, the money is deductible.  

    From a business perspective, you can't separate intent, either.  For example, my firm participates in United Way drives.  In part, we do that because it gets our names before clients and the community. Should we be denied a charitable deduction because it also helps us business-wise?  Should we only be allowed charitable deductions if the gift was anonymous?  Can you have a motivation that's partly business, partly charity (as most are)?  If so, who measures how much of a business motivation as opposed to how much of a charitable motivation the business has?  

    That kind of analysis -- that you don't get a charitable deduction if your motive is wrong - is just silly and unworkable.  Under our laws, charitable deductions are based solely on the qualification of the recipient as a charitable organization under IRS laws.  

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