Pay it Forward? Law and the Problem of Restricted-Spending Philanthropy (Full Video)

We were honored to host the Price Governance Salon, a Dean’s series on governance, featuring Brian Galle, Professor of Law at Georgetown. The event was co-sponsored by the USC Center on Philanthropy & Public Policy.

American foundations and other philanthropic giving entities hold about $1 trillion in investment assets, a figure which continues to grow each year. Philanthropic organizations spend only a tiny fraction of their wealth each year, even as urgent needs go unmet. Restrictive terms in contracts between donors and firms limit the rate at which donations can be distributed.

Law has played a critical role in underwriting and encouraging this build-up of philanthropic wealth. For instance, donors can take a full tax deduction for the value of their contribution today, regardless of when the foundation spends the money, paying no tax on the investment earnings the organization reaps.

What, if anything, justifies public support for “restricted spending” charity?

Through the Governance Salons, the Price School hosts faculty to explore issues relating to effective governance and public management. We create a unique opportunity for our students and faculty to meet and engage with top researchers in the field and encourage participation between speakers and audience in order to foster discussion and collaboration. Harkening back to the origins of the “salon,” our goal is to create a space for our students and faculty to exchange ideas. The Bedrosian Center has helped USC Price plan this series since its inception in 2005.

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