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You answered the point yourself: some of those "charities" are just tax loopholes. Especially those related to art: there's a loophole where the deduction is e

You answered the point yourself: some of those "charities" are just tax loopholes. Especially those related to art: there's a loophole where the deduction is exponentially higher than the value of the donated art (on the article it's spelled out: If instead that asset is contributed to a DAF, an appraiser determines its fair market value before it’s donated. That yields a bigger deduction,), and even worse, the donor doesn't lose access to art, since he donates it to his private "museum" that's only open a few times a month or a year. https://www.nytimes.com/2015/01/11/business/art-collectors-gain-tax-benefits-from-private-museums.html https://www.nytimes.com/2015/01/11/business/art-collectors-g... http://law.siu.edu/_common/documents/law-journal/articles-2015/fall2015/8%20-%20Rodgers%20Comment%20-%20Proof%203%20Pending%20-sm.pdf http://law.siu.edu/_common/documents/law-journal/articles-20... And, as the article says, * their financial advisers may be allowed to direct how the money is invested and earn management fees.* , so they can still pump money into the companies they need to and extract wealth (very useful when pumping a private equity debt-laden corporation). And that's without getting started on how they have access to all the "charity's" assets, so they can use buildings, vehicles, even private jets on the "charity's" dime - see Ingvar Kamprad and IKEA: https://www.fastcompany.com/3035734/ikea-is-a-nonprofit-and-yes-thats-every-bit-as-fishy-as-it-sounds https://www.fastcompany.com/3035734/ikea-is-a-nonprofit-and-... So I don't agree that they're always better off not giving to charity. There are some legitimate charities, but there are also a lot of tax loophole charities.

gamblor956 8y ago
In your zeal to make a political point, you have selectively quoted from the article and the journal note. For starters, while a valuation firm can appraise art for more than the taxpayer acquired it, that valuation is subject to audit and the IRS can (and frequently does) disagree. As the deduction is a % of the value of the art donated, the deduction could never be higher than the value of the art, let alone "exponentially." Second, while private museums are a thing, the rules that a private museum must satisfy to qualify for non-profit status are fairly rigorous, and the scenario you describe would not qualify. Thus, a "donation" to the "museum" in your hypothetical would not yield a deduction. A donation to a DAF that loaned the artwork to that museum would likely violate self-dealing rules and lead to various sanctions, including potentially prison. IKEA isn't a US charity, so none of the rules we're discussing apply.
- GFischer 8y ago
  Well, the New York times itself made the point about private museums. About the valuation, as I mentioned elsewhere, my mother used to work on collectibles auctions, and it is a VERY opaque world, with several ways to inflate price - using frontmen to buy other pieces by the same artist would be one way. I'm not a 0.1% and I'm not even from the U.S. :) , I just wanted to point out that in my experience such loopholes are exploited. In my country we get examples of charities being subverted very often. I do hope most charities are indeed that, charities.

gamblor956 8y ago

In your zeal to make a political point, you have selectively quoted from the article and the journal note. For starters, while a valuation firm can appraise art for more than the taxpayer acquired it, that valuation is subject to audit and the IRS can (and frequently does) disagree. As the deduction is a % of the value of the art donated, the deduction could never be higher than the value of the art, let alone "exponentially." Second, while private museums are a thing, the rules that a private museum must satisfy to qualify for non-profit status are fairly rigorous, and the scenario you describe would not qualify. Thus, a "donation" to the "museum" in your hypothetical would not yield a deduction. A donation to a DAF that loaned the artwork to that museum would likely violate self-dealing rules and lead to various sanctions, including potentially prison. IKEA isn't a US charity, so none of the rules we're discussing apply.

GFischer 8y ago
Well, the New York times itself made the point about private museums. About the valuation, as I mentioned elsewhere, my mother used to work on collectibles auctions, and it is a VERY opaque world, with several ways to inflate price - using frontmen to buy other pieces by the same artist would be one way. I'm not a 0.1% and I'm not even from the U.S. :) , I just wanted to point out that in my experience such loopholes are exploited. In my country we get examples of charities being subverted very often. I do hope most charities are indeed that, charities.