Acton Institute Powerblog

Does American Charity Cheat the Tax Man?

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A Stanford expert on philanthropy argues that tax-deductible American charity is actually a government subsidy and that philanthropy is not ‘redistributive’ enough. Acton’s Karen Woods points out (obvious to most) that helping the needy is not the exclusive domain of the state. “The real problem with government ‘charity’ is that government takes a ‘one size fits all’ approach to the problem of poverty,” Woods writes.

Read the complete commentary here.

Jonathan Spalink


  • My friend Karen Woods notes the Commentary: Does American Charity Cheat the Tax Man?” href=”″ target=”_blank”>painfully obvious:From the declaration of the War on Poverty to the decade of the 1990s, some $5.4 trillion government (i.e., taxpayer) dollars were targeted to…

  • jesse meerman

    In fact, tax breaks make ineffectual, self serving foundations and hollow gestures appear on paper as charity, while making the motives of true philanthropists appear questionable. Giving $50 to the ACLU is recorded while a Saturday spent buying and installing weatherstripping for a poor family is not.

  • An interesting article from the Acton Institute examines a liberal contention that tax breaks for charitable giving are less efficient than letting the government take care of people. The Action article does a delicious takedown. The author, Karen Woods, looks at an article by a Stanford political science professor: "After a long exposition of the uncertain ‘redistributive’ effects of charity, Reich concludes that, 'Given the evidence already presented, philanthropy does such a poor…

  • nicky

    it’s time our government got its grubby little paws out of everything and get back to the basics, protection from foriegn invaders and national governance. Leave charity to those who can afford it or choose to afford it, and stop forcing everyone to pay for it. Then we can spend our charity money on the organizations that do it the best, or that we think are the best and the government can take it’s one size fits all approach back to the drawing board.

  • dannyk

    I tend to trust the government more than I trust many of the charities today. My first hand experience with the biggest charities in the USA have proven that most have a corrupt underlining. No doubt charities do a lot of good but are now being infiltrated by organized crime groups that see them as cash cows easily milked by anyone with half a brain and a weakness for easy money. Typical of us the American public discussing micro management of tax breaks etc..when the Salvation Army, Goodwill etc are no longer doing self audits and have already set up internal systems that skim hundreds of millions every year. If you think this is just some crazy blog …think again…its happening now. We need to first address these internal issues before we get bogged down in the biggest scam of all …Profit from Confusion. Please, if your really concerned about charities in America…take a look into what I am saying here. You will not find much information on things like this because most are afraid to confront charities. This is an issue that really needs to be investigated by an unbiased group. Please someone help me take action because greed is getting stronger everyday in America and needs to be stopped.

  • pat r.

    If companies are robbing America of jobs, and giving charity overseas, the outcome will be to make America poorer funded by the charitable deduction (which would, in theory, be assets taxable that could be used for public welfare in this country).

    The impulse to use charitable funding as power surges for political purposes is strong, and must be tempered by a recognition that American charity is as important, if not more important and consistent with the principle of allowing a charitable deduction.

    Charitable funds and jobs shipped overseas can increase poverty in the U.S.

    The solution may be different rates of deduction, one for overseas-oriented charity, and one for American or local giving consistent with the motivation of the charitable function as anticipated.