Tax Expenditures, Social Justice and Civil Rights: Expanding the Scope of Civil Rights Laws to Apply to Private Charities

Abstract

This Article is a follow-up to The Power of The Treasury: Racial Discrimination, Public Policy and "Charity" In Contemporary Society, 33 U.C. Davis L. Rev. 389-447 (2000), which used affirmative action as an example to highlight problems with Treasury's public policy power - the power to revoke 501(c)(3) tax exemption of charities that violate "established public policy." Tax Expenditures and Civil Rights offers a possible solution to many of the problems highlighted in Power of the Treasury. Using tax expenditure theory as a guide, Tax Expenditures and Civil Rights proposes that courts interpret "federal financial assistance" as used in many civil rights statutes to include tax benefits received by tax-exempt charities. The Supreme Court has never addressed this matter. However, several lower federal courts have addressed the issue and reached different conclusions about whether FFA includes tax benefits. This Article's proposal is one way to combat invidious discrimination based on race, gender, disability and age by charities that does not involve the many problems highlighted in Power of the Treasury. The proposal also offers the advantage of a well-developed body of law that more clearly delineates when race preferences are illegal discrimination and when they are permissible affirmative action.