I also thought for a time that removing deductibilities could be good, but to me it all boils down to the price elasticity of donating. When it’s high enough, it does increase the overall amount donated, because people increase their donations. We just have to channel it to the efficient causes rather than remove it imho. It seems to me that we need answer to questions such as :
Are there large crowding out effects (state disinvest because private sector invest) ? My impression is that even though private charities have advantages (innovation, niche focus), there are arguments for a system in which the states increases its budget (reducing deductibility, taxing more) in order to assume part of the missions currently assumed by the private. This would mean more control by citizens over what are the priorities (state budget, democracy), and also more fiscal justice (instead of rewarding the more wealthy with deductions, they would be taxed more for redistribution). Now I for one also think that the state is not the most "effective" of altruists, mostly because its focus is on its resident.
Is the impact achieved through increased donations via deductibility greater than the good that this money can do if it remains in the state budget ? Certainly depends on the countries, priorities, governments, etc. If say all of a sudden the AMF grants deductibility, would you increase your donation ? To me a way forward could be to reach out to the charities that have become deductible in new countries and analyse their data to see the impact on donations, and measure the amount lost in state revenue. The worst case would be a charity with a large amount of donations from citizen of that country being granted deductibility (huge donations : huge spendings for the state) but seeing little increase in donation (few benefit for the cause).
Why is it that so few states use the matching mechanism ? It seems to have advantages over deductibility without much disadvantages, so certainly I’m missing something here.
Thank you all for your input on this topic, I appreciate it !
Thank you for your replies !
I also thought for a time that removing deductibilities could be good, but to me it all boils down to the price elasticity of donating. When it’s high enough, it does increase the overall amount donated, because people increase their donations. We just have to channel it to the efficient causes rather than remove it imho. It seems to me that we need answer to questions such as :
Thank you all for your input on this topic, I appreciate it !