Why the GOP bill has a carveout for one celebrity charity.
Many critics see the law as a long-outdated expression of the concerns of five decades ago. Though it might seem strange that Congress would set tough limits on a philanthropic structure, it made sense amid the growth of nonprofits in the postwar years. In the 1950’s, Congress worried that the rich would shift not just their assets but entire companies into private foundations as way to avoid certain taxes.
Beyond such tax strategies, they also had concerns about economic competitiveness, worried that for-profit companies owned by private foundations would become distracted from their money-making missions and that would hurt the broader economy. “Congress in the ‘50s thought the non-profit sector was going to gobble up the whole world,” said Alex Reid, a tax lawyer who has consulted with congressional staff on past versions of the exemption.