Philanthropy and Taxes

Grade Level: 
6, 7, 8, 9, 10, 11, 12
Motivations for Giving
Nonprofit Organizations
Video Clip and Discussion Guide: Examine the relationship between taxes and nonprofits with this video and discussion guide. Nonprofit organizations are exempt from paying certain taxes because foundations and charities do work that benefits the public. Nonprofit work relieves the work of the government by meeting needs where the government does not take action. Many individuals and corporations make a decision to give money to a charity because there is a tax benefit to them.

Anticipatory Set

The representatives from nonprofits and government in this video describe why there are tax benefits for nonprofit organizations. Do you think that having tax benefits encourages people to give? Do you think giving is essential to our society, and therefore should be promoted by tax dollars? Explain your thinking.



  1. The first speaker, Dr. Rooney, says, "If they HAVE to give, that's called taxation." What is the misconception he was clearing up about wealthy people and giving? 
  2. The U.S, Senator, Charles Grassley, says the government wants to promote nonprofits. Why are the outcomes of philanthropic funding of education, the arts, and science that are beneficial to the government, and to civil society?
  3. Tax benefits motivate giving, but they are not the only motivation. What are other reasons people give money or time to help others or the common good? 
  4. During WWI, people helped the war effort with personal giving so the cost of war was not passed down to their children through taxation. How did the posters shown in the video impact personal giving to support wartime needs?
  5. What does "partially public dollars" mean?
  6. What are some charities and nonprofits you are familiar with? What is the need they address? What would happen if they didn't do that work?

Follow-Up Activity

Conduct research to determine some things that are funded through U.S. taxes. There are shared resources that make sense for the government to fund, like roads and the military. What are some shared resources that government does not cover? Make a chart of shared resources and indicate whether they are funded through government, nonprofits, or business. Note: some are covered by more than one sector.

Give examples showing that education or healthcare are covered by all three sectors.