Monday, January 28, 2008
A brief comment on the meaning of charity: Our sister Blog, Taxprof, reports this morning that the U.S. Census Bureau has released a report stock full of statistics regarding the extent to which tax policy can effect levels of poverty. You may recall that we previously reported that both the Supreme Court of Minnesota and the UK Charity Commission have, each in their own ways, taken a new look at the idea of "charity". The ironic thing is that two independent and separately convened groups have both come to the conclusion that "charity" necessarily involves relief of the poor and anything that excludes relief of the poor, though it may be worthy and good, perhaps is not charity. It is something else worthy and good but not charity deserving of our highest form of tax support (exemption!). The operation of expensive private schools, exclusive opera houses and the like are no doubt good for everyone but their direct benefits are dispersed rather regressively, are they not? Anyway, that two independent bodies from both sides of the Atlantic would make the same seemingly "radical" suggestion might suggest a trend towards a return to the more traditional idea of charity. I'm not so sure that relief of the poor ought to be the penultimate criterion (there are many exempt organizations that simply pursue a social good not implicitly related to relief of the poor -- such as environmental groups) but In an age of increasing income disparities and vastly proliferating exempt organizations sitting on piles of money, it is worth expressing some indignation that wealthy organizations exclusively (save for a few tokens here and there) serving the admittedly legitimate and underserved wants (not "needs"), i.e., art and leisure, of wealthy patrons are nevertheless subsidized by tax exemption.
I asked my exempt organizations students about this and, after much discussion, we have solved the world's problems in this regard. There should be a special preferred class of exempt organizations comprised exclusively of those organizations that actually and directly provide relief to the poor. All other organizations should be treated separately, they said.