More on U.S. Tax Deductions for Donors to Foreign Museums

Two CultureGrrl readers, responding to recent posts (here and here), have sent me e-mails supporting the Tyler Green argument for the appropriateness of tax breaks for U.S. donors to American-based, foreign-museum "friends" groups. These are organized as 501(c) (3) organizations to provide U.S. tax deductions for financial support of foreign museums.

The proponents' favorite analogy is to tax deductions for disaster relief and humanitarian aid abroad. My partial response (more below) is that international relief efforts for dire situations carry more moral and legal authority than boosting foreign museums' endowments, facilities and collections.

Now, Donn Zaretsky, in his Art Law Blog, has entered the fray, mostly on Tyler's side, although he grants that "it's a complicated question" and advances a plausible legal argument for my viewpoint.

There's one thing, though, that puzzles me in Zaretsky's pro-"friends" group analysis. He advises us:

U.S.-based nonprofits may (1) engage directly in charitable activities overseas and (2) re-donate funds they receive to foreign charities (in the latter case, as long as the intermediate U.S. charity is not deemed to be a "mere conduit").

Isn't "mere conduit" a perfect description of these "friends" groups, whose raison d'être is to funnel tax deductible U.S. donations to foreign institutions?

What's more, one might even argue that humanitarian aid to foreign countries is more appropriately eligible for tax deductions than aid to foreign museums, according to the very language of the government's original rationale for allowing deductions for donations (as quoted by Zaretsky): Tax deductible donations have a U.S. public purpose, because they can provide our government with "relief from the financial burden which would otherwise have to be met by appropriations from public funds," in the words of the legislative history of the Revenue Act of 1938.

Our government does provide funds for humanitarian relief abroad, so private contributions may lessen or at least supplement such public expenditures. As far as I know, there's no line in our federal budget for the Tate Gallery or the Louvre. If our government has not seen fit to support foreign museums directly, why should it do so indirectly through tax deductions?

More blogs (Modern Kicks, which agrees with me, and Edward Winkleman, who doesn't) weigh in here, here and here.