Vanderbilt Law Review

First Page



The character of every nation is determined in large part by the values and beliefs of its people. A value high in the mores of American society is a settled policy decision to encourage gifts to charities. Governmental policy, federal and state, has been implemented for along time in various areas of the law by special provisions in favor of charity; and nowhere has the implementation of this policy been more pronounced than in our present tax laws, due in no small part to the high graduated income tax rates applicable to individuals. In order to encourage charities, Congress has provided that charitable contributions may be deducted in computing the federal income, estate and gift taxes. Also, it has provided that the receipts of qualified charities are wholly exempt from income taxation. The intended purpose of both the deductions and the exemption is to provide a subsidy for philanthropic institutions.