Tax Issues Relating to Charitable Contributions and Organizations

Tax Issues Relating to Charitable Contributions and Organizations. Congressional Research Service. Jane G. Gravelle, Donald J. Marples, Molly F. Sherlock. September 19, 2019

The federal government supports the charitable sector by providing charitable organizations and donors with favorable tax treatment. Individuals itemizing deductions may claim a tax deduction for charitable contributions. Estates can make charitable bequests. Corporations can deduct charitable contributions before computing income taxes. Further, earnings on funds held by charitable organizations and used for a related charitable purpose are exempt from tax. In FY2019, projected tax subsidies for charities, not including the value of the tax exemption on earnings of charities or the estate tax deduction, totaled $51.8 billion. If investment income of nonprofits were taxed at the 35% corporate tax rate in 2015, revenue collected is estimated at $26.7 billion (this amount excludes religious organizations). The cost of deducting bequests on estates is estimated at $4 billion to $5 billion.

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State Regulation of the Charitable Sector: Enforcement, Outreach, Structure, and Staffing

State Regulation of the Charitable Sector: Enforcement, Outreach, Structure, and Staffing. Urban Institute. Shirley Adelstein, Elizabeth T. Boris. February 16, 2018

 State charity offices play an important role in regulating the nonprofit sector, working both independently and with state and federal law enforcement agencies. The Urban Institute-Columbia University Survey of State Charities Regulators (Lott et al. 2016) focused at the office level and showed that state charity offices vary in structure, authority, and tools used to facilitate and enforce regulatory compliance. In this brief, we further analyze those data to compare the relationship between state-level enforcement activities, outreach activities, bifurcation of authority, and staff resources available to state charity offices. We find that staffing levels are related to the scope of outreach and enforcement activities, as well as to bifurcation of authority, which provides a promising avenue for future research. [Note: contains copyrighted material].

 [PDF format, 18 pages].

Clouds Over Charities for Refugees in Islamic Countries

Clouds Over Charities for Refugees in Islamic Countries. YaleGlobal. Susan Froetschel. December 18, 2014.

The world has 50 million displaced people, and refugees have little choice but to depend on other countries and their citizens for generosity. Faith-based charities are often among the first to respond to humanitarian crises, notes the UN Refugee Agency, and Islamic faith-based charities are active in Pakistan, Iran, Lebanon, Jordan and Turkey – lead host nations for refugees. Fundraising by Muslim charities could be compromised as governments try to block financing mechanisms for extremist groups like the Islamic State, including jihadists posing as charitable groups. Governments, however, don’t agree on which groups should be banned. The UAE placed Britain’s largest Muslim charity, one that works closely with governments and the United Nations, on a list of banned groups. Aid groups engaging in discrimination, waste or criminal activity erode donor confidence. Unfounded accusations can ruin reputations and discourage generosity, too. [Note: contains copyrighted material].

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