tax-deductible charity

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How is it possible to give to charity “for the tax write offs”? I see that you don’t pay 30~40% tax on the amount you donated, but you no longer have 100% of the amount so surely you’re worse off.

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Anonymous 0 Comments

It depends on the tax system, but in the places I’m aware of then yes, if you do everything by the rules, you can’t actually make a profit by donating to charity. Tax incentives for charitable donations essentially just allow you to make a bigger donation with the same amount of money. Though people can obviously get enjoyment or reputational benefits from donating large amounts of money to charity.

However, there are a lot of scams involving charities. Sometimes people will donate an expensive object (like an artwork) to charity and exaggerate its value, allowing them to get a tax write-off that’s bigger than the real value of their donation. Sometimes people set up a whole scam charity that funnels its income back to them somehow, so they get the write-off and get to keep the donation too. Sometimes people set up charities that spend some of their money on non-charitable activities which benefit them somehow. These scams are generally illegal, but people sometimes get away with them.

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