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This is me thinking out loud.
I do a great deal of work with the Community Reinvestment Act. There are detailed procedures in how banks are examined under CRA.

CRA looks at 4 primary areas:
1. Affordable housing for LMI
2. Economic Development activities
3. Community services targeting LMI
4. Activities to revitalize and stablize LMI areas

During an exam, loans and donations are subject to scrutiny concerning whether the monies' purpose is to serve Low to Moderate income areas or individuals. The real question during an exam comes from donations or loans to religious institutions. A loan for working capital would not qualify, but a loan to build a soup kitchen would qualify because of the intent.

So the question becomes, can tax policy be used to mirror stipulations on donations that they have to be used for a specific intent in order to qualify as a charitable donation. Would that be something that is worth pursuing?

Consider that the change would not be to the religious instititions, but to the gifts they receive. In other words, if Mrs. Smith gives a total of $50,000 to a church should she get to write that down as a donation if the church uses it for operating expenses? Or if she earmarks the donation for a food pantry? Why should a mega church benefit from a donation to build a sports complex for their community at the same level that another church uses its donation to run a homeless shelter?

Not all donations are equal and I understand there could be all kinds of Seperation of Church and State issues, but tax policy allows donations to charities. And there could be a floor on what would be looked at for instance anything under $1000 donated over a year would not be subject to such standards.

Like I said this is me thinking out loud, but I think it is worth examining who benefits from charitable donations.

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Comment Preferences

  •  Tip Jar (0+ / 0-)

    The Spice must Flow!

    by Texdude50 on Fri Aug 17, 2012 at 09:58:17 AM PDT

  •  The government can't get into the business of (5+ / 0-)
    Recommended by:
    Texdude50, Catte Nappe, campionrules, FG, VClib

    deciding which so-called charities are "worthy" and which are not.  It can't get into the business of deciding that a homeless shelter is more "worthy" than a sports complex.  If both are provided free to a community, the government is not going to say it's "better" to give your money to sheltering the homeless than to providing a place for kids to play.  We don't want government making those kinds of value decisions.

    The IRS has a content neutral section of the Internal Revenue Code which outlines content-neutral standards -- essentially financial (non-profit) and organizational -- for determining which non-profits or other organizations are eligible for tax deductible donations and which are not.  The IRS can only look at the nature of entity.  Since money is fungible, it can't trace the dollar I give to a specific entity to see what it is used for or not.

    As long as the organization meets IRS standards, it's up to me to decide -- by where I send my dollars -- whether it's"better" to support the homeless shelter or "better" to support the sports complex.  

    So no, I can't see how the IRS could do this.

  •  It's Ann's fault (2+ / 0-)
    Recommended by:
    Texdude50, FG

    I suspect she has caused the confusion that leads to your pondering. Whether through ignorance or artifice she is trying to suggest that she and Mitt give a great deal of money to charities. The truth is, they do give some to charity. But they give a great deal more to other non-profit organizations that are tax exempt but are not charities. Like her church. Or Brigham Young University, or the Bush Library. If I recall they give to some organizations involved in medical research - worthy causes, but also not charities.

    from a bright young conservative: “I’m watching my first GOP debate…and WE SOUND LIKE CRAZY PEOPLE!!!!”

    by Catte Nappe on Fri Aug 17, 2012 at 11:07:48 AM PDT

    •  I live in Houston (1+ / 0-)
      Recommended by:
      Catte Nappe

      non profit hospitals and medical research are HUGE here. I thought about adding those someplace, but I was simply thinking about intent of donations.

      And yes I was thinking about Ann and the mega churchs that grace many suburban areas. However, I'm not the thought police, but tax policy can used to address some needs just not sure how that would work. One thing I did learn in many a poli sci class was the law of unintended consequences. Just a thought exercise.

      The Spice must Flow!

      by Texdude50 on Fri Aug 17, 2012 at 11:16:32 AM PDT

      [ Parent ]

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