{"id":4667,"date":"2026-03-10T04:06:26","date_gmt":"2026-03-10T11:06:26","guid":{"rendered":"https:\/\/www.artsjournal.com\/worth\/?p=4667"},"modified":"2026-03-11T13:20:43","modified_gmt":"2026-03-11T20:20:43","slug":"should-there-be-a-tax-deduction-for-donating-to-the-nonprofit-arts","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2026\/03\/should-there-be-a-tax-deduction-for-donating-to-the-nonprofit-arts\/","title":{"rendered":"Should there be a tax deduction for donating to the nonprofit arts?"},"content":{"rendered":"\n
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I was at a seminar yesterday given by Professor Philip Hackney of the University of Pittsburgh School of Law, given (via web) at the Marxe School at Baruch College, on \u201cTax Policy Toward Arts Nonprofits: Democracy or Plutocracy?\u201d It\u2019s a good question! I won\u2019t try to summarize what Professor Hackney said (if a link to a video recording is ever posted, I will link to it here. UPDATE: here it is<\/a>). But it sparked me to try to articulate my own take.<\/p>\n\n\n\n

I\u2019ve come at this from a few angles in the past – here<\/a> is an article I wrote for the academic journal Cultural Trends<\/em> (paywalled, but just send a note if you want a copy), and here<\/a> is a blog post on how the IRS looks at all this – but in this post I will try to be brief and somewhat systematic.<\/p>\n\n\n\n

I think we can break it down into three questions:<\/p>\n\n\n\n

One: Should the state be in the business of subsidizing the arts at all? Opinions differ, but I will venture that since almost all cities and states in the US, as well as the federal government, devote some direct funding to the nonprofit arts, even where there are Republican super-majorities, there is a broad agreement (mostly!) that yes, there is some value in doing this. That value is hard to express without being either crudely economistic or vague and handwaving, but that doesn\u2019t mean it doesn\u2019t exist – after all, what we personally<\/em> value in our favourite works and genres of art is very hard to express in words too. So let\u2019s assume a \u201cyes\u201d in answer to this question.<\/p>\n\n\n\n

Two: Should the state be in the business of subsidizing, through a tax break, at least some<\/em> donations to nonprofit organizations? Here again, I\u2019m going to say the long-standing tradition of doing so, with very little political opposition to it, indicates the answer is, broadly speaking, \u201cyes.\u201d There are opponents – in my home and native land Neil Brooks<\/a> led a long, and, it has to be said, rather lonely opposition to the practice. He came at it from the political left, and said that charitable contributions were in effect just an ordinary use of income, not fundamentally different from private consumption; if taxation ought to be based upon ability-to-pay, there are no good grounds for giving donors, typically quite well off, a tax break for this sort of expenditure. Goods and services that are truly for the public benefit ought to be financed directly by government, and funded through a progressive income tax that does not give deductions for discretionary use of that income. But, again, I just don\u2019t see elimination of the tax deduction having any sort of political traction in the US (nor was there in Brooks\u2019s Canada).<\/p>\n\n\n\n

Three: If the answers to the first two questions are \u201cyes\u201d then should nonprofit arts organizations be included in the 501(c)(3) list of types of organizations that ought to be eligible for tax deductions by donors? It\u2019s hard to see why not. After all, direct government subsidies to the arts indicate the assumption that there is some value from the arts beyond the personal and private, and so it is hard to see why there would be a tax deduction for donations to nonprofit schools, hospitals, animal shelters, and social services but not<\/em> the arts.<\/p>\n\n\n\n

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What then would be arguments against the policy?<\/p>\n\n\n\n

One might be that since charitable donations are subsidized through a tax deduction, the rich, who are in a higher tax bracket (which is appropriate!) get more subsidy per dollar donated than a middle income person: If my marginal income tax rate is 40%, then if I give $100 to the Shelbyville Symphony my taxes fall by $40, but if my marginal tax rate is only 20% then when I give $100 to the Symphony I only get a $20 reduction in taxes. Here I do sense some general disquiet. One solution, a very worthwhile Canadian initiative, is to subsidize charitable donations through a tax credit<\/em> instead of a deduction: Anybody who gives $100 to the Shelbyville Symphony gets an $X tax break regardless of their personal income tax rate. So this is a problem solved fairly easily without much disruption (Canada did the shift from deductions to a credit in the 1980s and it was, as the kids say, nbd).<\/p>\n\n\n\n

A second problem is that it is simply wrong to let very rich arts patrons effectively be in charge of where the public subsidy is allocated, rather than through a more democratic process (this was one of Professor Hackney\u2019s main concerns). I\u2019d respond with three points. First, the numbers are such that the dollar value of the arts subsidy delivered through the charitable donation is more than ten times larger than direct government grants to the arts. If someone wants to argue against the charitable donation and for its replacement with greater direct government support, they have to be realistic that there is simply no way<\/em> that direct support would ever be increased to fully replace the subsidy through the charitable donation. End the deduction, watch donations fall (and they would), but don\u2019t dream that the NEA budget of $200 million (ballpark) is going to increase to $2 billion. The public generally supports arts funding, but not like that. Second, and I know this might be controversial: donors are not the worst judges in the world. They are generally close to organizations, have been ticket buyers, have some sense of their priorities and professionalism. The NEA and state arts agencies do fine work, but it is at a distance. And not all that<\/em> democratic. How much public input is there into direct government support? Typically the only time the public gets involved is when there is a bad<\/em> grant. Third, for anyone arguing there ought to be a greater amount of direct government support for the arts in proportion to private donations, I remind them that the President of the United States is Donald J. Trump. You don\u2019t get to say \u201cthere ought to be a bigger hand of government in the arts, and also the government has to be one that I like.\u201d<\/p>\n\n\n\n

A third problem, which I have seen raised by some arts policy people, is to question which arts organizations are truly \u201ccharitable\u201d and which are, well, a bit too artsy<\/em>, producing works that only a knowledgeable audience would appreciate, out of touch with \u201cthe community\u201d and their social needs. Should there be distinctions drawn between which organizations qualify for the charitable deduction and which do not? I don\u2019t think so. The public value of the arts might be in a small community theatre, or it might be in the striving for something far beyond the ordinary in our best and most \u201celite\u201d artistic institutions. Public policy, wisely, has not sought to say that one sort of thing is deserving of higher subsidy than another: tax breaks for gifts to nonprofits do not make distinctions, and I don\u2019t sense that either the IRS or the state Attorneys General in charge of the regulation of nonprofits have a lot of appetite for getting into the weeds of the specific activities of charities beyond the basics.<\/p>\n\n\n\n

An effort to steer arts institutions into becoming social service organizations doesn\u2019t make a lot of sense: existing social service organizations are going to be much more effective at community development than your local dance company, and your local dance company can do something your local social service organizations cannot do – put on interesting and rewarding dance recitals.<\/p>\n\n\n\n

Summing up: what arts policy is for is really hard to articulate (I used to take a harder line that arts councils ought to do more to express the purpose of what they are doing, but I\u2019ve softened with age). So our policies for giving public financial support to the arts are going to look vague and maybe imperfect. But when you take the fuzz off the peach, it\u2019s actually hard to find improvements to the current system that would have broad-based support. A rather small-c conservative position, I know. But, with the exception of moving from tax deductions to tax credits, I\u2019m not sure I see a clear way to improve the basic design.<\/p>\n\n\n\n

Cross-posted at https:\/\/michaelrushton.substack.com\/<\/a><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

I was at a seminar yesterday given by Professor Philip Hackney of the University of Pittsburgh School of Law, given (via web) at the Marxe School at Baruch College, on \u201cTax Policy Toward Arts Nonprofits: Democracy or Plutocracy?\u201d It\u2019s a good question! I won\u2019t try to summarize what Professor Hackney said (if a link to […]<\/p>\n","protected":false},"author":3,"featured_media":4668,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-4667","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2026\/03\/image-3.png","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-1dh","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":731,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/lotteries-should-not-be-used-to-fund-the-arts\/","url_meta":{"origin":4667,"position":0},"title":"Lotteries should not be used to fund the arts","author":"Michael Rushton","date":"April 28, 2013","format":false,"excerpt":"Blog neighbor Greg Sandow posts about the relationship between arts funding and gambling, especially regarding early Italian opera. It's tongue in cheek, but he concludes: For those without a sense of humor: I know very well that gambling raises moral questions, and legal questions, too, not to mention questions involving\u2026","rel":"","context":"With 3 comments","block_context":{"text":"With 3 comments","link":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/lotteries-should-not-be-used-to-fund-the-arts\/#comments"},"img":{"alt_text":"no way to fund the arts","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/powerball-lottery-ticket-604ds032513-300x162.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4659,"url":"https:\/\/www.artsjournal.com\/worth\/2026\/03\/reading-eleonora-redaellis-invisible-cultural-policy-in-america\/","url_meta":{"origin":4667,"position":1},"title":"Reading Eleonora Redaelli’s Invisible Cultural Policy in America","author":"Michael Rushton","date":"March 4, 2026","format":false,"excerpt":"This recent book is open access,\u00a0here. And my full review in the\u00a0International Review of Public Policy\u00a0is also open access,\u00a0here. My review begins: There is an old joke: An American tourist is visiting Oxford for the first time, and on his first morning signs up for a guided walking tour. 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But how can for-profit pricing be relevant to nonprofit museums, to orchestras and opera? Don\u2019t the nonprofit arts, unlike cable companies, have a mission to be accessible to all patrons,\u2026","rel":"","context":"With 5 comments","block_context":{"text":"With 5 comments","link":"https:\/\/www.artsjournal.com\/worth\/2013\/02\/targets-the-cost-of-bread-and-nonprofit-arts-pricing\/#comments"},"img":{"alt_text":"Focus on the target","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/02\/archersDM1304_468x364-300x233.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1966,"url":"https:\/\/www.artsjournal.com\/worth\/2016\/02\/local-state-federal-public-funding-for-the-arts-in-the-u-s\/","url_meta":{"origin":4667,"position":5},"title":"Local, state, federal: public funding for the arts in the U.S.","author":"Michael Rushton","date":"February 1, 2016","format":false,"excerpt":"At the Atlantic, Andy Horwitz asks 'Who should pay for the arts in America?' He is specifically asking about nonprofit arts, whose funding comes from paying customers, donors and other sponsors, and the public sector. He observes: The current state of the arts in this country is a microcosm of\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"this land is your land","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/01\/america_map.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/01\/america_map.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/01\/america_map.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/4667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=4667"}],"version-history":[{"count":2,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/4667\/revisions"}],"predecessor-version":[{"id":4670,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/4667\/revisions\/4670"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media\/4668"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=4667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=4667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=4667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}