In figuring their federal income tax liability, individuals are generally entitled to deduct from gross income the amount of their charitable contributions. Charities often recognize such donors for their gifts by associating donor names with the projects such donors make possible. In 2015, Lincoln Center made headlines when it recognized David Geffen's $100 million gift by placing his name on what the Center had previously named Avery Fisher Hall. The story renewed a debate over whether donor recognition should affect the amount of such donor's charitable deduction and, is so, how. This article argues that donor recognition should not affect the amount of a taxpayer's charitable deduction. The Internal Revenue Code and regulations promulgated thereunder, common law, and policy all support this treatment because the tangible benefits to society when donors agree to be recognized far outweighs the nominal benefits to the donors receiving such recognition. This article then reviews two proposals to limit the charitable deduction for recognized charitable gifts. The article concludes that these proposals, if adopted, would at best drive perceived abusive donors merely to use alternative vehicles to secure tax-free recognition and, at worst, would chill a centuries-old practice that recognizes and encourages those who would provide voluntary non-governmental response to need and promise in their communities.
Imdieke, Benjamin J.
"A Nominal Credit: Why Donor Recognition Should Not Limit the Deductibility of Section 170 Charitable Contributions,"
ACTEC Law Journal: Vol. 42:
2, Article 2.
Available at: https://scholarlycommons.law.hofstra.edu/acteclj/vol42/iss2/2