The Tax Law of Charitable Giving. Bruce R. Hopkins

       Promotion of the public interest through law. An organization can be charitable by functioning as a public interest law firm.³³⁴ These firms provide legal representation for important citizen interests that are unrepresented because the cases are not economically feasible for private law firms.

       Local economic development. One of the forms of charitable organizations is the local economic development corporation, which engages in a variety of activities, including investment in local businesses, creation of housing opportunities, and encouragement of established businesses to open offices and plants in economically depressed areas.³³⁵

       Other. Other categories of charitable organizations are organizations established to promote environmental conservancy,³³⁶ organizations established to promote patriotism,³³⁷ organizations that provide care for orphans,³³⁸ organizations that facilitate student and cultural exchanges,³³⁹ organizations that promote, advance, and sponsor recreational and amateur sports,³⁴⁰ and organizations that maintain public confidence in the legal system.³⁴¹

Educational Organizations. Organizations that are considered educational for purposes of the law of charitable giving³⁴² are:

       Formal educational institutions, such as primary, secondary, and postsecondary schools; colleges and universities; early childhood centers; and trade schools.³⁴³ These entities have a regularly scheduled curriculum, a regular faculty, and a regularly enrolled body of students in attendance at the place where the educational activities are regularly carried on.³⁴⁴

       Other types of formal organizations, such as museums, zoos, planetariums, and symphony orchestras.³⁴⁵

       Organizations that have programs related to instruction or training of individuals for the purpose of improving or developing their capabilities.³⁴⁶ These entities include a wide variety of training organizations and study and research organizations.

       Organizations that have programs related to instruction of the public on subjects useful to the individual and beneficial to the community.³⁴⁷ These organizations provide a range of personal services, instruct the public in the field of civic betterment, and (again) engage in study and research.

Religious Organizations. Organizations that are considered religious for purposes of the law of charitable giving³⁴⁸ include:

       Churches, synagogues, and similar places of worship³⁴⁹

       Conventions and associations of churches³⁵⁰

       Integrated auxiliaries of churches³⁵¹

       Church-run organizations, such as schools, hospitals, orphanages, nursing homes, publishing entities, broadcasting entities, and cemeteries

       Religious orders

       Apostolic groups³⁵²

       Missionary organizations

       Bible and tract societies

      The courts and the IRS traditionally have been reluctant to rule on whether an organization is a church or the like or a religious entity, if only because of concern about constitutional law constraints. This reluctance is dissipating, however, and the IRS and the courts are developing criteria for defining churches and other religious organizations.

Scientific Organizations. Organizations that are considered scientific for purposes of the law of charitable giving³⁵³ include:

       Organizations that are engaged in scientific research³⁵⁴

       Organizations that are otherwise operated for the dissemination of scientific knowledge (such as publishing entities)³⁵⁵

Other Charitable Organizations. There are several other categories of charitable organizations:³⁵⁶ literary organizations,³⁵⁷ organizations that seek to prevent cruelty to children or animals,³⁵⁸ cooperative hospital service organizations,³⁵⁹ cooperative educational service organizations,³⁶⁰ and amateur sports organizations.³⁶¹

      Consequently, the organizations that are eligible charitable donees for purposes of the law of charitable giving are those that are charitable in the common law sense (most of which have been rendered charitable by statute, regulation, or IRS ruling) and those that have been encompassed by statutory definition.

In one instance, however, the IRS refused to allow a charitable contribution deduction for a gift made to a charitable organization that had as its exempt purpose the preservation of local landmarks, because it was determined that the gift was “earmarked for and primarily benefit[ed]” a noncharitable recipient (a college fraternity).³⁶²

Requirement of Charitable Class. It is generally a requirement as to tax deductibility of contributions that those who are to benefit from a charitable activity must constitute a sufficiently large or indefinite class (often referred to as a charitable class), unless the benefits to a smaller class are incidental.³⁶³ This is another way of saying that a charitable organization may not be operated for private benefit, other than insubstantially. Thus, for example, the requirement is not met if the beneficiaries of the alleged charitable activities are specifically named or are solely relatives of the donor.³⁶⁴ An organization established to benefit one individual cannot be charitable even if it would be charitable if the same activities were undertaken for a charitable class.³⁶⁵