Contents

FUNDAMENTAL CONCEPTSdetermine what is public policy, the Court held that “a declaration that a giveninstitution is not ‘charitable’ should be made only where there can be no doubtthat the activity involved is contrary to a fundamental public policy.” 285 (In thefactual setting of the case, the Court concluded that racial discrimination in educationis contrary to public policy and that an educational institution that doesnot conform to this policy is not charitable.)These findings were presaged in a Supreme Court observation made morethan 100 years earlier: “A charitable use, where neither law nor public policy forbids,may be applied to almost any thing that tends to promote the well-doingand well-being of social man.” 286Nonetheless, the specific legal meanings of the term charitable are to befound in the narrower of the two definitions, which is an amalgam of court opinions,Department of Treasury regulations, and IRS rulings. Other bodies of law,although not as extensive, have evolved from use of the other terms, principallyreligious, educational, and scientific.Charitable Organizations. There are several ways for an organization to beconsidered a charitable entity for purposes of the law of charitable giving. 287These include:• Relief of poverty. This is the most basic and historically founded form ofcharitable activity. The tax regulations define the term charitable to include“[r]elief of the poor and distressed or of the underprivileged.” 288 Assistanceto the indigent is undoubtedly the most generally understood andaccepted form of charitable endeavor.• Advancement of religion. The scope of this category of charitable activity isimprecise, due to the recognition of religious activities as a separate basisfor tax-exempt status. 289 Organizations that are charitable because theyadvance religion generally are those that support or otherwise assist religiousorganizations. 290• Advancement of education. Likewise, the scope of this category of charitableactivity is imprecise, due to the recognition of educational activities asa separate basis for tax-exempt status. 291 Organizations that are charitablebecause they advance education generally are those that support or otherwiseassist educational organizations. 292285 Id. at 592.286 Ould v. Washington Hosp. for Foundlings, 95 U.S. 303, 311 (1877). This broad definition of the term charitableand the reach of the public policy doctrine are discussed in Tax-Exempt Organizations § 5.3.287 The law underlying these categories is discussed in Tax-Exempt Organizations ch. 6.288 Reg. § 1.501(c)(3)-1(d)(2).289 See § 3.3(b)(iii).290 Reg. § 1.501(c)(3)-1(d)(2).291 See § 3.3(b)(ii).292 Reg. § 1.501(c)(3)-1(d)(2). College and university fraternities and sororities that maintain chapter houses foractive members who are students at these institutions are not charitable organizations, but rather tax-exemptsocial clubs. IRC § 501(c)(7); see Tax-Exempt Organizations ch. 14; Rev. Rul. 69-573, 1969-2 C.B. 125. Giftsto a college or university to acquire or construct a housing facility for use by a designated fraternity or sororityare deductible, however, when the educational institution owns the facility and leases it on a short-term basisto the fraternity or sorority, the designation is not legally binding, and the fraternity or sorority house meetsthe standards of the college or university for other student housing. Rev. Rul. 60-367, 1960-2 C.B. 73. 98