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James Allen Smith Introduction PHILANTHROPIC GIVING, W H IC H IS NOMINALLY AN IND IVIDUAL ’S private decision, is nonetheless intertwined in public policies. This has been the case for millennia. Charitable corporations, trusts, testa­ mentary transfers of property, and regulatory oversight of charities are part of a long legal history. For the Western world, the story begins in antiquity, traversing both early Roman and later Byzantine law. Legal developments accelerated in the late Middle Ages, when last wills and testaments were used to secure property transfers to religious entities and when diverse rights and privileges were bestowed on charitable corporations. Statutes in Elizabethan England, most notably the 1601 Statute of Charitable Uses, sought to reform charitable activity, defin­ ing the acceptable roles for charitable trusts and creating mechanisms for overseeing charitable entities. For Americans this legal history is worth recalling. It reminds us of both continuity and change in the definitions of public benefit. It shows how diverse regulatory regimes have sought to protect charita­ ble gifts from misappropriation and abuse. And it hints at the range of motivations that have shaped gift-giving practices. While this legal inheritance is a venerable one, tax policy has been the principal mechanism for regulating charitable activity in the United States. The charitable deduction has been embedded in the federal tax code since shortly after the passage of the Sixteenth Amendment and the Revenue Act of 1913, which established the income tax. In 1917 legisla­ tion was passed allowing charitable deductions from income; in 1919 estates were also permitted to take charitable deductions. Subsequent tax reforms, especially the Tax Reform Act of 1969, have shaped the regu­ latory regime under which the US charitable sector operates. social research Vol. 80 : No. 2 : Summer 2013 513 The three papers in this section explore public policy and charita­ ble motivations. Two are concerned explicitly with the implications of tax policy, while one examines religious motivations and our traditions of religious freedom. All three papers ask in what ways policies have created incentives for givers to meet the needs of others. Jon Bakija’s economic analysis, like Rob Reich’s, concludes that tax incentives do tend to encourage charitable donations, especially among those with high incomes. Both papers are also concerned with the costs to the state of subsidizing private donations. Bakija focuses on ways to determine the optimal tax subsidy, while Reich moves beyond the questions of how much and how effective the subsidy is to a consid­ eration of how the subsidy can be justified in a democratic society. Reich finds that the m echanism for encouraging charitable contributions—the tax deduction—has a “plutocratic bias.” It is more valuable to those in high-income brackets than to those with less income. Moreover, if the test of charitable giving is providing for the needs of others, the charitable deduction fails to meet that test. Most philanthropy is not targeted to help the needy and is, thus, only mini­ mally redistributive. Concluding that American philanthropy is not necessarily aimed at caring for the needs of strangers, Reich argues that it is “about protecting and promoting a flourishing and pluralistic associational sphere or civil society.” Lew Daly’s paper turns its attention away from economic motiva­ tions to much older religious rationales for charity. Pluralistic religious values, which have come to the fore in recent decades in the United States through various “faith-based” social initiatives, have sometimes been difficult to accommodate with broader policy goals. W hen reli­ gious organizations have received federal funding and participated in the provision of social welfare services, secular aims and religious values have come into conflict. Collaboration between church and state has thus raised new issues of religious freedom. While individual freedom of religion and belief is not challenged, the institutional and collective freedom of religious bodies is at issue when those entities choose to participate in the provision of state-funded social services. 514 social research Daly reminds us that this is “a very new story about very old ideas.” He takes us back to the debates in the aftermath of the French Revolution over the role of religious associations, trade guilds, and other corporate bodies and...