The Minimum Distribution Requirement and Public Policy

31 Pages Posted: 22 Aug 2012 Last revised: 17 Apr 2013

See all articles by Carolyn Levine

Carolyn Levine

University of Delaware

Richard C. Sansing

Tuck School of Business at Dartmouth

Date Written: April 15, 2013

Abstract

This study examines whether the minimum distribution requirement that requires private foundations to spend at least five percent of their assets on charitable purposes should be increased or decreased. The study explicitly states an objective function that the government tries to maximize and a population of heterogeneous philanthropists that care about both distributions to charity and assets under control. An increase in the minimum distribution requirement increases the rate of charitable distributions from some foundations, but deters some philanthropists from forming foundations. Whether the minimum distribution requirement should be increased or decreased depends on the magnitudes of these two effects.

Keywords: Private foundations, minimum distribution requirement

JEL Classification: L31

Suggested Citation

Levine, Carolyn and Sansing, Richard C., The Minimum Distribution Requirement and Public Policy (April 15, 2013). Tuck School of Business Working Paper Series, Available at SSRN: https://ssrn.com/abstract=2133210 or http://dx.doi.org/10.2139/ssrn.2133210

Carolyn Levine

University of Delaware ( email )

42 Amstel Ave
Newark, DE 19716
United States

Richard C. Sansing (Contact Author)

Tuck School of Business at Dartmouth ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-0392 (Phone)
603-646-1308 (Fax)

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