Friday, October 6, 2023

Miranda Perry Fleischer’s Chapter in Giving In Time is Especially Worth Your Time

On Tuesday, I posted some musings on a current investigation by the DC AG into several nonprofits associated with Leonard Leo, but it didn’t include a link to a Politico article that was posted that same day, so I have updated the previous post with the following: “UPDATE: Politico posted another article today that reports that the Leo-affiliated entities are not cooperating with the DC AG and that the DC AG is also investigating Arabella Advisors, a "liberal 'dark money' group" that was the subject of a complaint from a conservative watchdog group.”

On Monday, I posted a book review of the recently published Giving in Time: Temporal Considerations in Philanthropy, in which I promised “hours of enjoyment and benefit” for readers interested in questions about the timing of charitable expenditures, and the laws that constrain, incentivize, or otherwise affect such issues. Today, I want to return to that book to especially recommend Miranda Perry Fleischer’s chapter, Intergenerational Justice and Charitable Giving: A Libertarian Perspective. I’m separately posting about that chapter not so much because of its insights into the central question of the book – time – but because it is such a clear and concise summary of Professor Fleischer’s work theorizing nonprofit law from a libertarian perspective. I agree heartily with Fleischer that at least some corrective is needed to the fact that “tax scholarship [including exempt-organizations tax scholarship] focuses overwhelmingly on welfarism and egalitarianism….” Fleischer’s work is among the most important to investigate “what comprehensive rights-based theories of justice say about [the law of] charitable giving.” The chapter builds on prior work by Fleischer, but the chapter is well worth reading even if you are familiar with professor Fleischer’s prior work.

Fleischer seeks to refute the simplistic (but popular) view that “libertarianism stands for the proposition that one can do whatever one wants with one’s property[.]” Instead, the argument made by libertarians for very strong protection of existing property rights is subject to two extremely important caveats.  First, the “Lockean proviso” holds that privatization of natural resources is only just if “enough and as good is left for others.” Any claim to ownership of natural resources (such as land) cannot be just if others were excluded from the use of that resource without them having access to other resources just as plentiful and valuable. Second, the justice of the current distribution of property is dependent on the justice of not only the original acquisition but also all subsequent transfers. Fleischer quotes Jeremy Waldron’s work on Robert Nozick stating, “The point of Nozick’s argument … was that egalitarians were condemning the existing distribution for the wrong reason—that is, simply as unequal—rather than on account of the violence, fraud, expropriation, ethnic cleansing, state corruption, and so on, involved in the history of most holdings of property in America.”  Importantly, violation of these two requirement for a just distribution of property doesn’t only justify governmental corrective action, it plausibly demands it. In other words, even a minimal state (sometimes called a night watchman state) is plausibly required to use the legal system to transfer property from some owners to others to rectify past injustice.

What does all this have to do with charity law? Fleischer argues that the deduction for donations to charity are the equivalent to a governmental subsidy to the charity, and therefore libertarianism weighs in favor of a more restrictive deduction for charitable contributions, not a more permissive one. She argues that a charitable tax deduction for charities that do anything other than some plausible version of rectification of past injustices is not justified. Although she does permit quite broad interpretations of what constitutes rectification, including general mitigation of poverty. As for the question of “time,” these insights suggest that it is important to look at the past as well as the future when one is determining both how to give and how the laws should incentivize or constrain giving. When evaluating the laws that affect the choice between present or future spending, Fleischer concludes that donors should be free to choose whether to emphasize current spending or future spending, but perhaps limitations on future generations’ control of a donor’s charitable endowments may be justified. I’m not sure I agree with all of Fleischer’s conclusions about how to apply the basic insights of property-rights-based theories of justice to charity law questions, but I do think her summary of these basic insights, and the reasoning she uses to apply them, is an important corrective to the dominant modes of analysis of such issues.

Benjamin Leff

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