Tax incentives for corporate giving programs: what measures increase funds available?

Policy differences in the treatment of corporations and nonprofit private corporate foundations raise several issues of interest to those who administer and receive donations, as well as those who hope to augment government funds with private charitable donations. Of the $6 billion donated by corporations to charity in 1994, approximately one-fourth came through corporate foundations. What determines the choice of giving through a foundation or directly to charity? The author examines the financial implications for each type of corporate giving by presenting specific elements of current policy on tax rates and deductions for giving. Specific factors considered are (1) differences in the treatment of corporate and foundation income, (2) deductibility of different types of gifts, (3) occurrence of donations to non-U.S. (non-tax-deductible) charities, (4) sales of assets to fund corporate foundations, (5) effects of giving on corporate image, and (6) effects of contributions over time. Analysis of regulations illustrates motivating factors for why corporate executives make certain types of gifts in certain ways. The author clarifies how social workers, fundraisers, nonprofit managers, and corporate officials alike benefit from understanding the differences among types of gifts, methods of giving, and deductibility of corporate donations.