# Are charities an efficient use of tax deductions **URL:** \ **Category:** Great Debates\ **Created:** [March 13, 2009, 4:24pm UTC](https://boards.straightdope.com/t/are-charities-an-efficient-use-of-tax-deductions/489342 "2009-03-13T16:24:34Z")\ **Posts on this page:** 4\ **Page:** 3
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [March 14, 2009, 11:16pm UTC](https://boards.straightdope.com/t/are-charities-an-efficient-use-of-tax-deductions/489342/41 "2009-03-14T23:16:47Z")
> [@accidentalyuppie](#): > > In the US most charities must apply for and receive tax exempt status from the IRS, otherwise you can’t deduct contributions made to them. There are exceptions to this law, most notably for churches and other religious organizations. Churches and religious organizations have to apply for tax exempt status. And as such there are limits on what they can do in the political arena. ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 15, 2009, 8:17pm UTC](https://boards.straightdope.com/t/are-charities-an-efficient-use-of-tax-deductions/489342/42 "2009-03-15T20:17:51Z")
> [@accidentalyuppie](#): > > You’re oversimplifying. It’s not like we all have equal tax burdens and charitible gifts are the only exception. I guess. I was just trying to do the analysis with all else equal. In other words, if you and I have a $100 tax bill (holding all else constant), then your charitable giving causes my taxes to go up. I think that’s a pretty common way to analyze something. It’s difficult to analyze an example like, our tax bills are the same, but now you get a second job, but I adopt two children. Now, let’s assume the tax rates are changing each year, but the dollar is decreasing in value, so inflation is going up. However, tax rates are not adjust for inflation. Now, the charity you’re giving to loses its tax status for two years, but gets it back the year you donate. My wife becomes disabled, so we get an extra deduction, but then my oldest kid ages out of the deduction age… and so on. I think the simpler example works well for contemplating the effect of the charitable tax deduction on our taxes. Regarding the exemptions for children, I could be wrong, but I don’t think that is there to encourage people to have more children. I think it’s a way of acknowledging that kids are expensive, so people with children effectively have less income than those without so should pay less in taxes. There’s a deduction for disability – I don’t think the government is trying to encouraging that, but instead acknowledging that disabilities bring higher costs of living. The charitable giving deduction seems to me to be to encourage that action. My question, that I’m still not sure has been answered, is whether that is a tax efficient use of a deduction. ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 15, 2009, 8:20pm UTC](https://boards.straightdope.com/t/are-charities-an-efficient-use-of-tax-deductions/489342/43 "2009-03-15T20:20:04Z")
> [@Snnipe\_70E](#): > > To the question how effecient is the gov. > > A calculation was made during the Johnson years (I think) that for every $1.00 sent to the feds only $0.50 was returned in work. I am going off memory and could be wrong so do not ask me to sight the report. > > In the 1950’s my dad was on a school board when they were planning to build a new school. A member of the board can up with the Idea to get a federal finical help at the last minute, at that time the feds would pay 1/3 of the cost. When the builders heard about the finical help they insisted that they would have to adjust their bids. My dad was worried about the timming and asked how long would it take to recaculate. the contractor told him it will take only minutes, we just double everything. The board canceled the request to the feds. > > I do not donate to charity to get the tax deduction. Some times it means that I can give a little more. > And I never donate to a charity that I do not know. Some charities are very effecient and some have high paid staff. You need to check out yours. I’m not doubting the veracity of this anecdote, but I’d rather see the data if it’s available. It’s also possible that in the last 40 or 50 years, there have been new regulations put in place to avoid the fraud and overcharging that your dad mentioned. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [March 16, 2009, 2:36am UTC](https://boards.straightdope.com/t/are-charities-an-efficient-use-of-tax-deductions/489342/44 "2009-03-16T02:36:26Z")
> [@RitterSport](#): > > I’m not doubting the veracity of this anecdote, but I’d rather see the data if it’s available. It’s also possible that in the last 40 or 50 years, there have been new regulations put in place to avoid the fraud and overcharging that your dad mentioned. They were not fraud, the contractor knew if the feds got involved it was going to require more work to make the feds happy there fore cost him more and he was going to pass the expense on. It was not one contractor, what he wass telling all the contractors were going to have double their estimates. The more the gov investagates the more the project costs. Every layer of government costs. If you don not believe it talk to someone involvesd in building hospitals in California. [Previous page](https://boards.straightdope.com/t/are-charities-an-efficient-use-of-tax-deductions/489342.md?page=2)