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Comment by jmyeet | Hacker News Reader

> For example if you are a billionaire and donate $1B of your appreciated stock to your donor directed fund you need to distribute 5% per year on charitable works to keep the 503b status

This is the dirty little secret of billionaires' private foundations. That 5% has a lot of latitude and little oversight. For example, it includes administrative costs. A private foundation can pay each family member a salary (allowance) and that's a valid cost against the 5%.

As for the Mormon church (or any church for that matter) non-profits aren't meant to be politically active, as in campaigning for a particular party of candidate. We all know this happens all the time..

I'd be fine with keeping tax-deductability for contributions to complying non-profits. But why do they get to enjoy tax free status on, say, investment gains? Or income from investments (including property they own)? Get rid of that and I think a lot of problems go away.

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In the case of religious organizations a lot of their assets weren’t purchased primarily as investments. Most religious organizations largest assets are in real estate sitting under their churches. The real estate may have appreciated over 100 years but taxing a church on “gains” when the building needs to be moved to make way for an office building isn’t generally what people think of as investment gains.

The same can be said for most charitable organizations. The community food pantry being taxed if it moves across town or simply trying to keep the rainy day fund even with inflation.

If a person is of the view that all good things come from the government then taxing charities makes a lot of sense. If, on the other hand a person believes that all good things originate from the people and that the government is just one of those good things it makes sense to allow room for other things that serve the people’s interests but don’t directly serve the governments interests.

I am certainly not saying that bad things don’t come from religious organizations, charities or the government. I am saying there is a belief in the US that power ultimately resides with the people. Actually with the people, not the government or through the government as representatives of the people.

> This is the dirty little secret of billionaires' private foundations. That 5% has a lot of latitude and little oversight. For example, it includes administrative costs. A private foundation can pay each family member a salary (allowance) and that's a valid cost against the 5%.

Here's an example of a 503(c)(3) organisation (in politics often referred to as "dark money" organisations due to their lack of need to report the identities of individual donors) putting a family member on the payroll:

https://vtdigger.org/2018/07/29/sanders-institute-little-sho...

There's also the "buy from myself" tactic which possibly isn't that important for the Mormon Church but can certainly be used to boost apparent popularity or to change the format of money:

https://www.greenmountaindaily.com/2019/04/25/bernies-own-bo...

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