Are Charities Becoming A Tax Loophole?

[jeffrey]

The number of organizations that can offer their donors a tax break in the name of charity has grown more than 60 percent in the United States, to 1.1 million, in just a decade.

Experts say nonprofits are skillfully exploiting the tax code's broad and elastic definition of what constitutes such a charity, making it difficult for the Internal Revenue Service, which must bless them, to say no. The agency approved 99 percent of the applications for public charity status last year, according to a new study by students at Stanford University — or more than one every 10 to 15 minutes...

http://www.nytimes.com/2009/12/06/us....html?emc=eta1

[MonkeyMama]

Charities have always been a giant tax loophole. To be fair, I didn't read the article, but I kind of felt like, "duh," with the title.

[EconoMutt]

I think some of these so called charities are a scam.
I've spoke with some employees of charities, not volunteers, that make huge salaries and get bonuses on top of that.
I don't think it's that hard to start a charity. I may look in to it if I get laid off.

[Joan.of.the.Arch]

If I am not mistaken a good number of the credit repair outfits that have come on the scene lately have non-profit status even though they offer little to nothing that an individual cannot do for themselves after a little research and guidance easily available on the internet. This is one instance of not-for-profit that would bother me.

Oh, does non-profit and not-for profit mean the same thing?

[lossmiti]

Originally Posted by Joan.of.the.Arch

If I am not mistaken a good number of the credit repair outfits that have come on the scene lately have non-profit status even though they offer little to nothing that an individual cannot do for themselves after a little research and guidance easily available on the internet. This is one instance of not-for-profit that would bother me.

Oh, does non-profit and not-for profit mean the same thing?

He he... I think Non profit thing is just a more innovative way of earning more profits

[adiaccounting]

Current law allows the country’s wealthiest taxpayers to take a 40-percent deduction on donations of cash, stock shares, or other assets to charity. Authorities say that rule has prompted promotions encouraging rich people to buy foreign shares at a discount, donate them, and claim tax relief on their full value.

Charities welcomed the crackdown, saying they usually do not benefit from such donations because the offshore entities that control the shares retain an option to buy them back later.

[Mike75]

for a large number of companies, Charities have definitely become a tax loophole. There have been so many instances of scams via so-called "Charitable organizations"

[jefffou]

The majority of non-profits are doing it right. In other words, they do what they say they're going to do....help who they say they're helping. That's not to say that some of the non-profit employees may make some pretty decent salaries. There will be greed and selfishness as long as I draw breath, I'm sure.

But, I think the IRS will have to continue to allow for tax-deductibility on pretty much all applicants at this point. The combined efforts of America's non-profits create so much value to those in need that they've made themselves indispensible at this point. For example, look at the Haiti and Katrina events. Imagine the man-hours that have gone into the betterment of those situations.

The good news is that information relating to the efficiency of these non-profits is becoming more readily available to us all. CharityNavigator.com, for example, has been a tremendous asset to those families who would like to donate here or there, but have been a little unsure about what happens with the money when received by the charities themselves.

In the end, this kind of watch-dog information is a good thing. It will help (not completely, of course) to weed out some the abusers who have become very skilled at this game.

Jeff
401k Advice

[oroborosfx]

in an answer yes