Ellen P. Aprill (Loyola-L.A.; Google Scholar), Reviewing For-Revenue Philanthropy And the 1969 Tax Reform Act, 179 Tax Notes Fed. 825 (Could 1, 2023):

For-Revenue Philanthropy criticizes current developments in philanthropy, arguing that they exhibit “the unraveling of a pact between elites and the general public that fueled half a century of philanthropic achievement.” My evaluate acknowledges the achievement of this e book, specifically the breadth of its examination, however, after all, additionally critiques it. The authors argue that current philanthropic exercise by rich elites betrays the grand discount of the 1969 Tax Reform Act that set out the foundations for personal foundations. I consider this thesis claims considerably an excessive amount of. For my part, it doesn’t sufficiently weigh the worth of donor privateness and by ignoring different philanthropic autos blessed by tax legislation, each earlier than and after the 1969 Tax Reform Act.

For instance, Reiser and Dean supply a prolonged remedy of philanthropic LLCs. They lament that these LLCs don’t face the identical necessities relating to transparency and accountability as do non-public foundations. I discover this comparability misplaced. Because the creator’s acknowledge, philanthropic LLCs are tax nothings. For earnings tax functions, any switch is handled as coming straight from the donors’ pocketbook. Thus, I consider that the suitable comparability for a philanthropic LLC is to not a personal basis however to donors who give straight from their sources to working charitable and different exempt organizations. Our tax legislation and different legal guidelines haven’t denied secrecy or demanded public accountability from these giving straight, with out the usage of middleman entities.

As reforms, the authors endorse non-public ordering and a few small adjustments to the non-public foundations guidelines in addition to broad systematic reform, similar to a return to steeply progressive earnings tax charges and enactment of a wealth tax. I counsel as a substitute a distinct change to our tax legislation – encouraging charitable giving past the rich members of society who’re the main target of the e book. As others have prompt, such reforms may take the type of a flooring on charitable giving or changing the deduction with a credit score.

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