Some 150 years ago Alexis de Tocqueville marveled at Americans' propensity for charity. Last year Americans gave more than $100 billion to charities and other humanitarian causes. However, a new report by the Council on Foundations (CoF) and Independent Sector (IS) says that Americans give not out of empathy, but for tax write-offs. The report concludes that under a flat tax or a national sales tax where charitable write-offs are eliminated donations would drop by nearly a third or more.

Yet, according to an analysis by economist Alan Reynolds in Philanthropy magazine, the IS has been wrong before:

• The IS predicted the 1986 Tax Reform Act would cause charitable contributions to decline by $8 billion in 1987.

• Instead, giving rose in 1987 by $6.4 billion or 7.6 percent -- in spite of the top tax rate falling from 50 percent to 28 percent.

• From 1987-94, the IS underestimated charitable giving by $40 billion.

This year's CoF/IS study assumes lowering tax rates reduces charitable giving. It says that improvement in the economy would only recapture 10 percent of the loss in total charitable giving.

Policy analysts note both of these assumptions are misguided:

• If the level of charitable giving is inversely proportional to tax rates, maximum giving would occur at a 99 percent tax rate -- which is unlikely.

• Moreover, according to historical data over the last 40 years, levels of charitable giving track almost exactly levels of personal income growth.

• The assumption that improvements in the economy would recapture only 10 percent of lost charitable revenues does not match the historical trend of giving in America.

Source: Stephen Moore (Cato Institute), "Less Than Charitable Tax Report," Washington Times, June 18, 1997.