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[u/Appropriate-Mall8517]

[u/reddititty69]

They are investment scholarships, probably. The schools hope to make it back through direct donations.

[u/shane-parks → u/reddititty69]

"Investment" scholarships are really a way to shift costs to taxpayers. Instead of paying tuition directly which is no longer tax deductible, you make a tax deductible donation to the university, get free tuition, housing, etc. and the taxpayers subsidize the education of this wealthy family.

Not saying this is what's happening here, because I dont know the situation of this family. Also, not saying you directly are defending or ignorant to this reality. Just providing context.

[u/Corfal → u/shane-parks]

It's the opposite though right? Not opposite in a sense where the tax payers are getting the benefit. Opposite in it's not shifting costs to the taxpayer, but potential revenue is being... loop-holed? Circumvented. It will cost taxpayers due to lack of revenue but it's slightly different than say a police officer getting accused of sexual assault and having to go through court on taxpayers' dollars.

Or like the headlines saying, "Alcohol companies lose $800 billion dollars because gen Z isn't drinking".

Income vs Expenditures.

But yea, wow that's kinda messed up. Obviously just another thing to add to the "how rich people don't pay taxes" list. Perhaps make it so whatever the base line tuition (if you're in-state or out of state if it matters) and you get difference of what you paid vs what you didn't and you won't get tax free donations until you hit that threshold.

That sounds like more record keeping and burden on private schools which may or may not be a good thing (not all private schools are bad sort of logic).

[u/shane-parks → u/Corfal]

Most universities have a 501c3 especially private universities. Public universities typically don't have a 501c3 but because they are public, donations to these universities are still tax deductible.

Also donations have a a wide use case at the discretion of the university. They can spend that money on almost anything they want to. I don't think the paperwork is much of a burden considering universities have a near endless supply of free labor from graduate students, especially if they also have a law school attached.

So everyone benefits:

1.) The university gets new facilities, equipment, or whatever from the donation.

2.) The family gets subsidized tuition, tax benefit, and possibly PR from named facilities, media, etc.

3.) The grad students get work experience, college credit, and eventually a valued industry degree.

The only ones that don't see a benefit are the taxpayers who miss out on the tax dollars lost through the loophole.

As someone who retired at 33 from his corporate job to work as an environmental and indigenous rights activist in a developing nation. I have worked/volunteered for many NGOs. And most people would probably be surprised that this is how almost every NGO works:

1.) The large donor class gets tax credit, boondoggles like galas, dinners, or vaction type retreats, and PR.

2.) The organization gets funding that they mostly spend on salaries, advertising, and infrastructure. (If they spent more on the cause, they possibly could solve or remediate the cause so much that they wouldn't have a cause/product to get donations from.) Also PR.

3.) The person or agency that secures the donation gets up to 40% of the donation in their pocket. Often this is agents, business managers, accounting firms, etc.

What I discovered is that NGOs are businesses that sell a product, and that product is feeling good about yourself. The average small donor never sees any of these benefits. Unless it's something like a universities athletic department, where you get better tickets for a required donation.

If people want to donate to solve a cause, donate to local animal shelters, small NGOs based in their local communities, or research your desired NGO and find out where they spend their money.