Let Prophets Be (Non) Profits

60 Pages Posted: 8 Sep 2017

See all articles by David Herzig

David Herzig

Ernst & Young; Valparaiso University Law School

Samuel D. Brunson

Loyola University Chicago School of Law

Date Written: September 5, 2017


In this article, we take a step back and ask whether the Supreme Court’s application of the fundamental public policy rule as espoused in the Bob Jones case is the normatively correct position. In our analysis, we conclude that using fundamental public policy as a filter in granting tax exemption gets both tax and public policy wrong. Our conclusion is informed by the history of the role played by public charities espousing minority views. We believe that a legitimate space in society should exist and populated by nonprofits to both espouse popular and unpopular minority views. But it is also informed by tax policy: applying the fundamental public policy rule to qualification for tax exemption misunderstand how exemption fits into the corporate income tax. Ultimately we conclude that homogeneity of viewpoint is normatively detrimental to a robust society. Therefore, in order to allow nonconforming views, we propose that the proper sector to house those views is in an expansionist version of the nonprofit sector.

Keywords: section 501(c)(3), tax exemption, federal income tax, subsidy, section 170, fundamental public policy, deductabilty, charitable donation

Suggested Citation

Herzig, David and Brunson, Samuel D., Let Prophets Be (Non) Profits (September 5, 2017). Wake Forest Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3032555

David Herzig

Ernst & Young ( email )

710 Bausch and Lomb Pl
Rochester, NY 14604
United States

Valparaiso University Law School ( email )

656 S. Greenwich St.
Valparaiso, IN 46383-6493
United States
219-465-7809 (Phone)
219-465-7872 (Fax)

HOME PAGE: http://www.valpo.edu/law

Samuel D. Brunson (Contact Author)

Loyola University Chicago School of Law ( email )

25 E. Pearson
Chicago, IL 60611
United States

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