Download this Paper Open PDF in Browser

Tax Deductions for Charitable Contributions: Domestic Activities, Foreign Activities or None of the Above

50 Pages Posted: 4 Jan 2012  

Eric M. Zolt

University of California, Los Angeles (UCLA) - School of Law

Date Written: January 3, 2012


Warren Buffett, Bill Gates, and sixty-seven other billionaires have pledged to give a majority of their wealth for charitable purposes. The total dollar amount of potential funding for charitable activities is staggering. So is the potential loss of tax revenue. Because of past, current, and future tax benefits, U.S. taxpayers have funded and will fund a substantial portion of these charitable activities without any input in how the money is spent. These billionaires are not just being generous with their own money, but with the money of the American people.

Should we allow tax benefits to subsidize charitable activities and allow donors to dictate how funds are spent? This Article seeks to contribute to the debate on the desirability of charitable tax deductions by focusing on a smaller part of the charitable tax world: charitable deductions for foreign assistance. Tax benefits for foreign assistance raise several of the same issues that arise in the purely domestic context, as well as issues that may be less important or absent in the subsidizing of domestic charitable activities.

Recent scholarship has argued for continuing to allow tax benefits to foreign charitable activities, and for extending charitable tax benefits to foreign charities and to for-profit entities engaged in charitable activities. These arguments rest partly on the notion that there is no meaningful way to distinguish these activities or entities from domestic charities engaged in domestic charitable activities. These scholars may be right in arguing for consistent tax treatment for domestic and foreign charitable activity, but they may be wrong in their conclusions. The best approach may be to consider changes to the current charitable-deduction regime for both domestic and foreign charitable activities and to consider other alternatives for the government to provide financial support and other incentives for charitable activities.

Keywords: tax reform, charitable contributions, for-profit charities, tax-exempt organizations, foreign assistance

Suggested Citation

Zolt, Eric M., Tax Deductions for Charitable Contributions: Domestic Activities, Foreign Activities or None of the Above (January 3, 2012). Hastings Law Journal, Vol. 63, pp. 361-410, 2012; UCLA School of Law, Law-Econ Research Paper No. 12-02. Available at SSRN:

Eric M. Zolt (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Paper statistics

Abstract Views