* John E. Anderson Professor of Tax Law and Director, Tax LL.M. Program, Loyola Law School. Ann Hashisaka, Jeremy Shortell and Erica Jones provided valuable research assistance.
1 All references are to the Internal Revenue Code of 1986, as amended, unless otherwise indicated.
2 Section 501(c)(3) of the Internal Revenue Code requires of the organization as a condition for exemption that “no substantial part” of its activities consist of “carrying on propaganda, or otherwise attempting, to influence legislation” and that it “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” I.R.C. § 501(c)(3). I shall refer to the first condition as a limit on lobbying and the second as a prohibition on electioneering.
3 H.R. Rep. No. 100–391 (II), at 1625, 1627 (1987), reprinted in 1987 U.S.C.C.A.N. 2313–1.
4 Section 501(c)(4), (c)(5) and (c)(6) organizations are all exempt from income tax and can engage in electioneering, so long as it is not their primary activity. I.R.C. § 501(c)(4)–(6). Section 527 organizations are exempt organizations whose very purpose is to engage in electioneering. I.R.C. § 527. See generally Anne Berrill Carroll, Religion, Politics, and the IRS: Defining the Limits of Tax Law Controls on Political Expression by Churches, 76 Marq. L. Rev. 217 (1992).
5 Regan v. Taxation With Representation of Washington, 461 U.S. 540, 545 (1983). Unlike section 501(c)(3) organizations, sections 501(c)(4), (c)(5), (c)(6) and section 527 organizations cannot receive deductible contributions. See I.R.C. §§ 501(c)(3)–(c)(6), 527; cf. I.R.C. § 170. Courts and commentators have suggested mechanisms to permit charitable organizations to engage in electioneering with nondeductible money. See Taxation with Representation, 461 U.S. at 545; see also Branch Ministries v. Rossotti, 211 F.3d 137, 143–44 (D.C. Cir. 2000); Laura Brown Chisolm, Politics and Charity: A Proposal for Peaceful Coexistence, 58 Geo. Wash. L. Rev. 308, 324–26 (1990). Others have questioned whether such arrangements would be feasible for churches. See Wilfred R. Caron & Deirdre Dessingue, I.R.C. § 501(c)(3): Practical and Constitutional Implications of “Political” Activity Restrictions, 2 J.L. & Pol. 169, 192–93 (1985). See generally Deirdre Dessingue, Prohibition in Search of a Rationale: What the Tax Code Prohibits; Why; To What End?, 42 B.C. L. Rev. 903 (2001).
6 See Staff of Joint Comm. on Tax’n, 107th Cong., Description and Analysis of Present Law and Proposals to Expand Federal Incentives for Charitable Giving (JCX-13–01) 2 (Comm. Print 2001) [hereinafter Joint Comm. on Tax’n, Present Law and Proposals], available at http://www.house.gov/jct/x-13–01.pdf. Section 170 permits deductions of charitable contributions, subject to percentage limits. In defining “charitable contribution,” section 170(c)(2)(D) explicitly refers to the lobbying limitation and electioneering prohibition. I.R.C. § 170(c)(2)(D).
7 See Indep. Sector, America’s Religious Congregations: Measuring Their Contribution to Society 4 (2000) [hereinafter Indep. Sector, America’s Religious Congregations], available at http://www.independentsector.org/programs/research/ ReligiousCong.pdf.
8 Charles T. Clotfelter, Federal Tax Policy and Charitable Giving 10–11 (1985). See also Burton A. Weisbrod, The Nonprofit Economy 197 (1988) (reporting 93% of all receipts of religious organizations in 1980 from private giving).
9 See Clotfelter, supra note 8, at 22.
10 See Indep. Sector, Giving and Volunteering in the United States, at Introduction (1999) [hereinafter Indep. Sector, Giving and Volunteering], at http://www.in-dependentsector.org/GandV/s_intr.htm (last visited Aug. 14, 2001). Independent Sector describes itself as “[a] coalition of leading nonprofits, foundations and corporations strengthening not-for-profit-initiative, philanthropy, and citizen action.” See http://www. independentsector.org. Independent Sector has made passing the deduction for nonitemizers its top legislative priority, and has more than 500 organizations as signatories to a letter supporting this legislation. See http://www.independentsector.org/media/ TestimonyPR.html (last visited Aug. 14, 2001); http://www.independentsector.org/programs/gr/ NCH_supporters.html (last visited Aug. 14, 2001). It also conducts and sponsors many research projects regarding the non-profit sector, including surveys that have been conducted over many years, and I will be using much of its material in the pages that follow. See http://www.independentsector.org/programs/research/research.html (last visited Aug. 14, 2001).
11 Indep. Sector, Giving and Volunteering, supra note 10, at Household Contributions by Type and Charity.
12 Id. The percentage making such contributions fell from 48% in 1995 to 45% in 1998. Id.
13 Section 63(c) defines the standard deduction and section 63(e) provides an election to itemize. I.R.C. § 63(c), (e).
14 See Charles T. Clotfelter & Richard L. Schmalbeck, The Impact of Fundamental Tax Reform on Nonprofit Organizations, in Economic Effects of Fundamental Tax Reform 228 (Henry J. Aaron & William G. Gale eds., 1996); Joseph Cordes et al., Extending the Charitable Deduction to Nonitemizers: Policy Issues and Options, in Charting Civil Society 6 (The Urban Inst./Ctr. on Nonprofits and Philanthropy, Wash., D.C.) May 2000, available at http://www.urban.org/periodcl/cnp/cnp7.pdf; Indep. Sector, Guiding Principles for Public Policy on Charitable Giving 5 (Mar. 2001) [hereinafter Indep. Sector, Guiding Principles], available at http://www.independentsector.org/programs/gr/ GuidingPrinciples.pdf.
15 See Clotfelter, supra note 8, at 23, 283.
16 See Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 16.
17 Clotfelter & Schmalbeck, supra note 14, at 215.
18 Boris I. Bittker, Charitable Contributions: Tax Deductions or Matching Grants, 28 Tax L. Rev. 37, 55 (1972).
19 See Neighbor to Neighbor Act, H.R. 824, 107th Cong. (2001); Charitable Giving Tax Relief Act, H.R. 777, 107th Cong. (2001); Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 7–11 (reviewing 2001 Senate proposals to expand the federal tax benefits to charitable giving).
20 Clotfelter, supra note 8, at 129–32. Clotfelter has estimated that extending the charitable contribution deduction to nonitemizers would increase long-run giving to religious organizations by 14%, in contrast to an increase of 8% for higher educational institutions. Id. at 131 tbl.3.10.
21 See generally Dessingue, supra note 5.
22 See J.S. Seidman, Seidman’s Legislative History of the Federal Income Tax Laws 1938–1861, at 945 (1938).
23 See War Revenue Act of 1917, ch. 63, § 1201(2), 40 Stat. 300, 330 (1917).
24 Id. The percentage limits were increased from time to time until they reached the current limits, which for churches and other specified organizations is 50% of the individual’s adjusted gross income for gifts of cash and ordinary income property. See I.R.C. § 170(b)(1)(A). Since those who currently take the standard deduction are unlikely to be concerned about the percentage limits, I will not discuss them further in any detail. Although Clotfelter observes that “households earning a relatively small portion of total income account for a disproportionate share of contributions” and that “households contributing more than 20 percent of their income accounted for about 11 percent of income but over 60 percent of all contribution,” he does not suggest that such households approach the 50% limit. See Clotfelter, supra note 8, at 20.
25 See Clotfelter, supra note 8, at 31 (1917 dollar amounts are adjusted for inflation).
26 55 Cong. Rec. 6728 (1917).
27 Id.
28 Id.
29 Id.
30 See id. at 6728–29.
31 See I.R.C. § 170(b)(1) (as amended by the Tax Reform Act of 1969, Pub. L. No. 91–172, § 201(a)(1)(B), 83 Stat. 487, 549–51). The legislative history explains that the reason for raising the limit from 30% to 50% was to “strengthen the incentive effect of the charitable contributions deduction.” Staff of Joint Comm. on Tax’n, 91st Cong., General Explanation of the Tax Reform of 1969 (JCX-16–70) 75 (Comm. Print 1970).
32 See Alan L. Feld, Fairness in Rate Cuts in the Individual Income Tax, 68 Cornell L. Rev. 429, 433–34 (1983).
33 See id. at 438–39.
34 See id. at 439–40.
35 H.R. Rep. No. 78–1365, reprinted in 1944 C.B. 821 (1944).
36 S. Rep. No. 78–885, reprinted in 1944 C.B. 858, 860 (1944).
37 See 90 Cong. Rec. 4029 (1944) (noting the objection of United Stewardship Council representing twenty-one Protestant church members, the Council on Taxes and Philanthropy, a number of Catholic churches and organizations, and the American Association of Colleges); Clotfelter, supra note 8, at 32 (citing articles from the New York Times from December of 1943 to December 1945); C. Harry Kahn, Personal Deductions in the Federal Income Tax 46 (1960).
38 See 90 Cong. Rec. 3972–73, 4028–30 (1944).
39 See id. at 3972–73.
40 Id. at 3972.
41 Id.
42 Id. at 4029.
43 90 Cong. Rec. 4029 (1944).
44 Id. at 3973.
45 Id. at 3975–76.
46 Id. at 3975; see also Kahn, supra note 37, at 46–47.
47 90 Cong. Rec. 4704 (1944); see also Kahn, supra note 37, at 47.
48 90 Cong. Rec. 3973 (1944) (statement of Rep. Robertson).
49 See Economic Recovery Act of 1981, Pub. L. No. 97–34, § 121, 95 Stat. 172 (1981). The provision as passed phased in the deduction with 100% of charitable contribution deductions to be permitted for nonitemizers only in 1986, and termination of the provision after 1986, “so that the Congress will have the opportunity to review its effectiveness in stimulating contributions and any administrative problems it may have caused.” Staff of Joint Comm. on Tax’n, 97th Cong., General Explanation of the Economic Recovery Tax Act of 1981 (JCS–71–81) 49 (Comm. Print 1981) [hereinafter Joint Comm. on Tax’n, 1981 Act].
50 See Charitable Contribution Deductions: Hearing on S. 219 Before the Senate Subcomm. on Tax’n and Debt Mgmt. Generally of the Comm. on Finance, 96th Cong. 51 (1980).
51 See id. at 52–53.
52 See id. at 217–35.
53 Joint Comm. on Tax’n, 1981 Act, supra note 49, at 49.
54 Fred Stokeld, Should Nonitemizers Get the Charitable Deduction?, 76 Tax Notes 157, 160 (1997) (alteration in original) (quoting Robert A. Boisture, exempt organization tax law specialist with Caplin & Drysdale, Washington, D.C.).
55 See Staff of Joint Comm. on Tax’n, 100th Cong., General Explanation of the Tax Reform Act of 1986 6 (Comm. Print 1987).
56 See generally Ronald A. Pearlman, Repeal of Charitable Contributions for Nonitemizers Explained, 28 Tax Notes 1140 (1985) (emphasizing administrative burdens for both IRS and taxpayers).
57 Charles Clotfelter has written:
As debate over tax reform intensified during the 1980s, influential spokespersons for nonprofit organizations came to view such reform as a serious threat to that source of revenue, a view that was bolstered by economic models of charitable giving. Finding it uncomfortable to oppose tax reform itself, the nonprofits nevertheless fought to maintain tax incentives for giving, with the result that the treatment of charitable contributions provided some of the gloomiest predictions and most heated debate among the provisions involved in tax reform during the 1980s.
Charles Clotfelter, The Impact of Tax Reform on Charitable Giving: A 1989 Perspective, in Do Taxes Matter? The Impact of the Tax Reform Act of 1986, at 203 (Joel Slemrod ed., 1990).
58 See Michael J. Graetz & Deborah H. Schenk, Federal Income Taxation 428–29 (3d ed. 1995) (observing that the 1986 Act was praised for decreasing the number of itemizers); IRS Individual Income Tax Returns 1988, at 2 (1991) (showing that the number of taxpayers who itemized deductions decreased by 20% from 1985 to 1988).
59 See Treasury Explains Clinton Budget Revenue Proposals, 2000 TNT 27–26 (Feb. 9, 2000), available at FEDTAX; TNT, LEXIS; see also Staff of Joint Comm. on Tax’n, 106th Cong., Summary of Tax Provisions Contained in the President’s Fiscal Year 2001 Budget Proposal (JCX-13–00) 17 (Comm. Print 2000), available at http://www.house.gov/jct/x-13–00.pdf; Analytical Perspectives, Budget of the United States Government Fiscal Year 2001, at 66, available at http://www.access.gpo.gov/usbudget/fy2001; Dep’t of the Treasury, General Explanations of the Administration’s Fiscal Year 2001 Revenue Proposals 110 (Feb. 2000), available at http://www.treas.gov/taxpolicy/library/grnbk00. pdf.
60 See President’s Agenda for Tax Relief, at 4, available at http://www.whitehouse.gov/ news/reports/taxplan.html (last visited Aug. 15, 2001).
61 Charitable Giving Relief Act, H.R. 777, 107th Cong. (2001).
62 Press Release, White House, President Clinton’s Tax Agenda for Community, Opportunity, and Responsibility, 2000 TNT 19–16,(Jan. 27, 2000) available at FEDTAX; TNT, LEXIS.
63 President’s Agenda, supra note 60, at 4.
64 147 Cong. Rec. E243–44 (2001).
65 Indep. Sector, Guiding Principles, supra note 14, at 5.
66 Both the Treasury Department and the Joint Committee on Taxation treat the charitable contribution deduction as a tax expenditure, a provision “analogous to direct outlay programs,” and thus as a subsidy. See Staff of Joint Comm. on Tax’n, 107th Cong., Estimates of Federal Tax Expenditures for Fiscal Years 2001–2005 (JCS-1–01) 2–4 (Comm. Print 2001), available at http://www.house.gov/jct/s-1–01.pdf. The Joint Committee on Taxation estimates the tax expenditure in 2001 for charitable contributions by individuals at $29.7 billion. Id. at 20–23 tbl.1 (adding figures for charitable contributions to educational institutions, charitable contributions to health organizations, and deductions for charitable contributions, other than to educational and health organizations); see id. at 25 tbl.3
67 Don Fullerton & Shira D. Goodman, The Economic Recovery Tax Act of 1981: Implications for Charitable Giving, 16 Tax Notes 1027, 1028 (1982). Similarly, Independent Sector in its Guiding Principles for Public Policy on Charitable Giving defines efficiency “in this context” as “stimulating increased charitable giving with as little tax revenue loss to the Treasury as possible.” Indep. Sector, Guiding Principles, supra note 14, at 6.
68 Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 14. Martin Feldstein’s work has been particularly influential. See generally Martin Feldstein, The Income Tax and Charitable Contributions: Part I—Aggregate and Distributional Effects, 28 Nat’l Tax J. 81 (1975); Martin Feldstein, The Income Tax and Charitable Contributions: Part II—The Impact on Religious, Educational and Other Organizations, 28 Nat’l Tax. J. 209 (1975); Martin Feldstein & Charles Clotfelter, Tax Incentives and Charitable Contributions in the United States, 5 J. of Pub. Econ. 5 (1976).
69 Evelyn Brody & Joseph J. Cordes, Tax Treatment of Nonprofit Organizations: A Two-Edged Sword, in Nonprofits and Government: Collaboration and Conflict 141, 146 (Elizabeth T. Boris & C. Eugene Steuerle eds., 1999).
70 Id. at 146.
71 See William C. Randolph, Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions, 103 J. of Pol. Econ. 709, 710-11 (1995).
72 Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 14.
73 See Charles T. Clotfelter & Eugene Steuerle, Charitable Contributions, in How Taxes Affect Economic Behavior 403, 436–37 (Henry J. Aaron & Joseph A. Pechman eds., 1981); Christopher M. Duquette, Is Charitable Giving by Nonitemizers Responsive to Tax Incentives? New Evidence, 52 Nat’l Tax J. 195, 203–04 (1999).
74 Clotfelter & Schmalbeck, supra note 14, at 220.
75 See Yong S. Choe & Jinook Jeong, Charitable Contributions by Low- and Middle-Income Taxpayers: Further Evidence with a New Method, 46 Nat’l Tax. J. 33 (1993); Charles T. Clotfelter, Tax-Induced Distortions in the Voluntary Sector, 39 Case W. Res. L. Rev. 663, 685–86 (1989).
76 PricewaterhouseCoopers, Incentives for Nonitemizers to Give More: An Analysis 4 (Jan. 2001), available at http://www.independentsector.org/programs/gr/ pwc_study.pdf.
77 See id.
78 Id.
79 See Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 17 n.35 (commenting on high level of donations in 1986); Clotfelter, supra note 57, at 203; Randolph, supra note 71, at 710–11.
80 See Clotfelter & Schmalbeck, supra note 14, at 238–39.
81 See infra text accompanying notes 84–92.
82 See PricewaterhouseCoopers, supra note 76, at 4.
83 See Clotfelter, supra note 8, at 64–65 (comparing studies).
84 Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 17.
85 Statement of Peter Goldberg and Sara E. Melendez, submitted on behalf of Independent Sector to the Committee on Ways and Means, U.S. House of Representatives, February 27, 2001, available at http://www.independentsector.org/media/TestimonyPR. html (last visited Aug. 15, 2001).
86 Cordes et al., supra note 14, at 2.
87 See id.
88 See id. at 3. They suggest either a floor of $500 for joint filers and a floor of $250 for single filers or floors of $650 and $325, respectively. See id. For the former, the increased giving is greater than the revenue loss; the latter is revenue neutral. See id. at 4. Although the Urban Institute Study describes itself as using a model of charitable giving quite similar to the model used by PricewaterhouseCoopers for Independent Sector, their conclusions contrast sharply. See PricewaterhouseCoopers, supra note 76, at 4–5. The Urban Institute study found that revenue loss exceeded the change in giving if deductions are permitted for all contributions by nonitemizers, in part because of those taxpayers who switch, and that with a low enough floor, the incentive to bunch deductions rather than to give annually will not be a significant problem. See Cordes et al., supra note 14, at 4. Independent Sector and the PricewaterhouseCoopers study come to different conclusions on both these points. See PricewaterhouseCoopers, supra note 76, at 4–5. Importantly, where PricewaterhouseCoopers finds that the nonitemizer deduction without a floor would increase giving by $14.6 billion in the first year, the Urban Institute shows increases in giving ranging from about $2.3 billion to $8 billion, using 1995 income levels, depending on the level of price sensitivity assumed. Compare PricewaterhouseCoopers, supra note 76, at 4, with Cordes et al., supra note 14, at 4.
89 Cordes et al., supra note 14, at 6.
90 Stokeld, supra note 54, at 158.
91 See supra note 59 and accompanying text.
92 See Cordes et al., supra note 14, at 6.
93 Indep. Sector, Giving and Volunteering, supra note 10, at Volunteering.
94 Id. at The Relationship Between Religious Involvement and Charitable Behavior.
95 Id. at Importance of the Ask. See generally Elizabeth J. Reid, Nonprofit Advocacy and Political Participation, in Nonprofits and Government: Collaboration and Conflict 291 (Elizabeth T. Boris & C. Eugene Steuerle eds., 1999) (considering political activity of nonprofit organizations).
96 See Clotfelter, supra note 8, at 144.
97 Weisbrod, supra note 8, at 203 (using wages and salaries paid and data on volunteering from 1980–1981).
98 See I.R.C. § 170.
99 See Clotfelter, supra note 8, at 163–70.
100 See id.
101 See id. at 170.
102 See Indep. Sector, Giving and Volunteering, supra note 10.
103 Indep. Sector, Giving and Volunteering, supra note 10, at The Relationship Between Giving and Volunteering.
104 See id.
105 Indep. Sector, Giving and Volunteering, supra note 10, at The Relationship Between Religious Involvement and Charitable Behavior.
106 Fullerton & Goodman, supra note 67, at 1028.
107 Independent Sector, The Charitable Deduction for Nonitemizers Q & A, at http:// www.independentsector.org/programs/gr/NCDFAQs.html (last visited Aug. 14, 2001).
108 See Seidman, supra note 22, at 17.
109 See Mark P. Gergen, The Case for a Charitable Contributions Deduction, 74 Va. L. Rev. 1393, 1393 n.3 (1988).
110 Id. at 1439–40.
111 Clotfelter, supra note 8, at 23–25.
112 See Indep. Sector, America’s Religious Congregations, supra note 7, at 7.
113 Mark Chaves, Congregations’ Social Service Activities, in Charting Civil Society 2 (The Urban Inst./Ctr. on Nonprofits and Philanthropy, Wash., D.C. Dec. 1999), available at http://www.urban.org/periodcl/cnp/cnp_6.pdf. The study further reported that only a very small minority of congregations administer their own projects in these areas and only 12% have a staff person devoting at least 25% of his or her time to social service projects. See id.
114 See id.
115 Mark A. Hall & John D. Columbo, The Donative Theory of the Charitable Tax Exemption, 52 Ohio St. L.J. 1379, 1401 (1991).
116 Gergen, supra note 109, at 1433–34.
117 See generally Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (2000).
118 For example, section 170(c)(4) permits a charitable contribution for gifts to fraternal associations operating under the lodge system “only if such contribution or gift is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.” I.R.C. § 170(c)(4).
119 Gergen, supra note 109, at 1437.
120 Indeed, under current law, tuition paid for giving one’s own children a religious education is not deductible as a charitable contribution. See Sklar v. CIR, 79 T.C.M. (CCH) 1815, 1815 (2000).
121 See supra notes 7–12 and accompanying text.
122 Independent Sector, Public Policy, Nonitemizer Charitable Deduction, at http:// www.independentsector.org/programs/gr/Nonitemizer_Deduction.html (last visited Aug. 14, 2001).
123 Cordes et al., supra note 14, at 1.
124 In 1997 David Arons of Independent Sector supported a floor for nonitemizer deductions so that people did not have “a double dip or a double reward.” See Stokeld, supra note 54, at 158.
125 Richard A. Musgrave & Peggy B. Musgrave, Public Finance in Theory and Practice 362 (3rd ed. 1980).
126 William Vickrey, Agenda for Progressive Taxation 131 (1947); see also Clotfelter, supra note 8, at 287.
127 Clotfelter, supra note 8, at 286.
128 To illustrate, a deduction for a $100 charitable contribution saves a taxpayer $15 at the 15% tax rate, but saves $35 for a taxpayer in a 35% bracket. If instead each got a credit for 25% of their contribution, both would save $25 in taxes. See Todd Izzo, Comment, A Full Spectrum of Light: Rethinking the Charitable Contribution Deduction, 141 U. Pa. L. Rev. 2371, 2372 (1993).
129 See Harold M. Hochman & James D. Rodgers, The Optimal Tax Treatment of Charitable Contributions, in The Economics of Nonprofit Institutions: Studies in Structure and Policy 238, 243 n.29 (Susan Rose-Ackerman ed., 1986).
130 Those with the lowest incomes account for a high percentage of giving and households at either end of the scale, under $10,000 and over $100,000, gave most as a percentage of total household income. See Indep. Sector, Giving and Volunteering, supra note 10, at Key Findings.
131 Joint Comm. on Tax’n, Present Law and Proposals, supra note 6, at 12. Many associate this view of charitable contributions with William D. Andrews, Personal Deductions in an Ideal Income Tax, 86 Harv. L. Rev. 309, 309 (1972).
132 See Brody & Cordes, supra note 69, at 153–54.
133 Indep. Sector, Giving and Volunteering, supra note 10, at Economic Conditions and Chartiable Behavior.
134 See supra notes 109–114 and accompanying text.
135 See Gergen, supra note 109, at 1441. For educational institutions, the top one-tenth of one percent of donors accounts for over 25% of the amounts given. See id.
136 Nonetheless, even Professor Gergen argues that the equity argument for deducting religious contributions is stronger than the efficiency argument because such gifts are “self-abnegating,” given in good measure out of obligation and commitment rather than payment for services received. Gergen, supra note 109, at 1442.
137 Clotfelter, supra note 8, at 101 (describing George Break, Charitable Contributions Under The Federal Individual Income Tax: Alternative Policy Options, in Research Papers, Volume III, Special Behavioral Studies, Foundations, and Corporations 1523 (Comm’n on Private Philanthropy and Public Needs, Dep’t of the Treasury 1977)).
138 See Clotfelter, supra note 8, at 287.
139 Consider the famous 1601 Statute of Charitable Uses. Its preamble lists all of the following as charitable purposes for which property has been given:
[S]ome for relief of aged, impotent and poor people, some for maintenance of sick and maimed soldiers and mariners, schools of learning, free schools, and scholars in universities, some for repair of bridges, ports, havens, causeways, churches, sea-banks and highways, some for education and preferment of orphans, some for or toward relief, stock, or maintenance for houses of correction, some for marriages of poor maids, some for supportation, aid and help of young tradesman, handicraftsmen and persons decayed, and others for relief or redemption of prisoners or captives, and for aid or ease of any poor inhabitants concerning payments of fifteens, setting out of soldiers, and other taxes.
The Statute of Charitable Uses, 1601, 43 Eliz., c. 4, quoted in Austin Wakeman Scott & William Franklin Fratcher, Law of Trusts § 368.1 (4th ed. 1987). The authors comment, “[i]t is interesting to note that the only mention of religion is the repair of churches, and yet it soon was held by the courts that the promotion of religion, or at least what was regarded as the proper religion, is charitable.” Scott & Fratcher, supra, § 368.1. They also observe that the tendency of courts through the ages has been to enlarge the scope of charitable purposes. See id.
140 See Evelyn Brody, Of Sovereignty and Subsidy: Conceptualizing the Charity Tax Exemption, 23 J. of Corp. L. 585, 587–96 (1998) (arguing for a theory of sovereignty for exemption); Hall & Columbo, supra note 115, at 1383–84 (arguing for a donative theory for exemption). Arguments regarding the justification for exempting an organization under section 501(c)(3) are closely related to arguments regarding the justification for permitting charitable contribution deductions.
141 Hochman & Rodgers, supra note 129, at 227.