The Charitable Continuum

50 Pages Posted: 23 Oct 2019

Date Written: October 13, 2019


There are powerful fairness and efficiency arguments for making charitable donations to soup kitchens 100% deductible. These arguments have no purchase for donations to fund opulent church organs, yet these too are 100% deductible under the current tax code. And this stark dichotomy is only the tip of iceberg. Looking at a wider sampling of charitable gifts reveals a charitable continuum. Based on sliding scales for efficiency, multiple theories of fairness, pluralism, and institutional competence, social welfare dictates that charitable deductions should in most cases be fractions between zero and one. Moreover, the Central Limit Theorem strongly suggest that combining this welter of largely independent criteria to the wide variety of charitable gifts results in a classic bell-shaped normal curve of optimal deductions, with a peak at some central value and quickly decaying to zero at the extremes of 0% and 100%. Given that those are the only two options under the current tax code, the current charitable deduction regime inevitably makes large errors in most cases. Actually calculating a precise optimal percentage for each type of charitable donation is of course impractical. This article suggests, however, that we can do much better than the systematically erroneous current charitable deduction. Granting a 100% deduction only for donations to the desperately poor, along with 50%, 25%, and 0% for gifts yielding progressively fewer efficiency, fairness, pluralism, and institutional competence benefits promises to deliver a socially more desirable charitable deduction.

Keywords: tax, charitable deduction, charitable contributions, fairness, efficiency, pluralism, central limit theorem, religion, science

JEL Classification: D30, D60, H20, H21, H24, H40, I30

Suggested Citation

Kades, Eric A., The Charitable Continuum (October 13, 2019). Available at SSRN: or

Eric A. Kades (Contact Author)

William & Mary Law School ( email )

South Henry Street
P.O. Box 8795
Williamsburg, VA 23187-8795
United States
757-221-3828 (Phone)

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