The Donor Control/Public Benefit Balance Underlying Philanthropic Tax Concessions

Philanthropic tax concessions are intended to support the creation of greater public benefit whilst also maintaining donor autonomy. In essence, the tax concessions are part of a bargain that encourages donors to give away property and, arguably, a degree of control, in order to generate greater public benefit. However, this chapter argues that tax regulation, especially in the United States and Canada, is too encouraging of donor autonomy and control, because it focuses primarily on the leakage of marketable private benefits to donors. Further, it is because tax regulators generally lack tools (such as access to cy-près or administrative schemes) to reform the use of charity assets so as to reduce donor control. This is to the detriment of public benefit, as hard-to-value rights to project a donor’s views into the future can undermine democratic institutions, pluralism, altruism and intergenerational justice.