Charity and Taxation; The Economist: Sweetened Charity

  • Facebook
  • Twitter
  • reddit

There’s a very engaging article in the June 9 issue of the economist that deals with charities and their tax-exempt status. here are  two small paragraphs that I thought were very interesting for consideration.

America has the most generous tax incentives for charity, and has the highest giving as a proportion of GDP, at 1.67%, according to a rare comparative study by Britain’s Charities Aid Foundation. Britain’s tax breaks for charity are the next-most-generous, and it had the second-highest share of charity to GDP, 0.73%, followed by Australia, 0.69%, which also has significant tax breaks. By contrast, the relatively weakly incentivised Germans give only 0.22% of GDP. The correlation is not perfect, though; despite their generous tax breaks, the French give just 0.14% of GDP.

Overall, American donors give more than half of their charitable donations to religious organisations, according to a study by Mr Reich of Stanford University. Only a small part of total American giving was in any sense redistributive from rich to poorer people, the study concluded. The churches, synagogues and so on that received most of the money were typically attended by the donor, and thus could be interpreted more as a membership fee than an act of charity (the study did not include religiously linked charities engaged in good works under the heading of religious organisations).

I hope you take time to read the entire article and would like to hear your “two cents”.

Here’s a worthwhile interview as well.

Charities & Taxation Interview