Document Type


Publication Date

Fall 2014

Publication Citation

89 Indiana Law Journal 1485 (2014)


Charitable giving is redistributive at heart. It is thus surprising that scholarship on the charitable tax subsidies focuses on the efficient and pluralistic production of public goods while largely ignoring distributive justice concerns. Existing scholarship and current law leave crucial questions unanswered: How should we prioritize among charities? Should subsidized groups be required to help the poor? Are criticisms that charities do too little to help the poor valid? This Article is part of a series that examines how each common theory of distributive justice would answer these questions.

More specifically, this Article explores utilitarianism and the charitable tax subsidies using the definitions of “utility” most common in legal scholarship: income, happiness, preference satisfaction, and objective-list well-being. It demonstrates that a careful application of utilitarianism as used by tax scholars (which equates income with utility) suggests that charities assisting the underprivileged deserve special treatment. This contrasts with the current structure, which does not prioritize such organizations, and contradicts the conventional wisdom concerning utilitarianism and charitable giving.

Initially, other interpretations of utilitarianism common in the legal literature (focusing on preference satisfaction, subjective well-being, and objective lists) appear to support the conventional wisdom that groups assisting the poor are not special. Each of these approaches, however, has intrinsic drawbacks when it comes to prioritizing among organizations and answering the recurring distributional questions facing the non-profit sector. But viewing these approaches together highlights a commonality: donative organizations that help the poor likely enhance welfare under all of the common welfare-based theories of justice. This is also true of traditional income-based utilitarianism, the leximin, and the most common equality of opportunity theories. This overlap suggests that tax policy should favor such groups, thus reconciling distributional concerns with pluralism by emphasizing what various moral theories have in common.

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