In deciding the means, levels, and targets of taxation and spending across third-sector organizations, governments seeking to increase social welfare should use fiscal concepts and indicators that can detect and grade the welfare consequences of their decisions. On these terms, charity, as its meaning has originated and evolved in common law, is a deficient fiscal concept: it is neither teleological nor gradational, and therefore can offer no guidance on how to design and differentiate the fiscal treatment of third-sector organizations in ways that could increase social welfare. In general, the national governments of Australia, Canada, England and Wales, India, and Singapore treat uniformly the third-sector organizations whose purposes comply with the legal meaning of charity. In order to reform and differentiate that treatment with the prospect of increasing social welfare thereby, governments should start by dispensing with charity as a fiscal concept.

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Keywords Legal charity, Optimal taxation, Tax expenditures, Third-sector finance
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Journal Voluntas
Carmichael, C. M. (2012). Dispensing Charity: The Deficiencies of an All-or-Nothing Fiscal Concept. Voluntas, 23(2), 392–414. doi:10.1007/s11266-011-9207-3