In light of the current crisis involving the United States Postal Service, some have called for philanthropy to come to the rescue. Indeed, even ardent critics of big philanthropy see a role for it in strengthening democracy and equity. The Postal Service is crucial to both those goals, particularly in light of an election during a pandemic. But we cannot look to philanthropy for deliverance here. In terms of authority, that is a letter only Congress may postmark.
Taxpayers can easily make deductible contributions to the federal government itself. For taxpayers who itemize their personal deductions, section 170(c) of the Internal Revenue Code permits charitable contribution deductions for contributions or gifts “to or for the use of” the United States or the District of Columbia “if the contribution or gift is made for exclusively public purposes.” That is, the federal government as a whole qualifies as charity for purposes of the charitable contribution deduction.
The authority of the federal government to accept voluntary donations from private entities has been characterized as inherent. A provision of federal law explicitly authorizes donations to reduce the national debt. These gifts reside in the general fund of the Treasury. The Bureau of Fiscal Services operates a special account called 'Gifts to the United States.' This account, which dates back to 1843, was established “to accept gifts, such as bequests, from individuals wishing to express their patriotism to the United States.” These gifts are considered as available for general use by the federal government, including budget needs. The amount donated to this fund varies considerably. In fiscal year 2019, the gifts totaled $4,991,215. In Fiscal Year 2018, however, they were only $775,654. In 2012, in contrast, they came to $7,749,618.
A different set of rules applies to federal agencies.
The definition of “agency” is surprisingly murky. As the Congressional Research Office has observed, “Congress has not provided one all-encompassing definition of an agency. Instead the term ‘agency’ can mean different things in different contexts, depending on what statute is at issue.” Consider this unhelpful statutory definition: “The term ‘agency’ includes any department, independent establishment, commission, administration, authority board or bureau of the United States or any corporation in which the United States has a proprietary interest, unless the context shows that such term was intended to be used in a more limited sense.” Moreover, the definition of agency differs in different statutes. That language in the Administrative Procedure Act is not the same, for example, as that in the Freedom of Information Act. As the Congressional Research Service has explained, some statutory definitions include agencies within the legislative and judicial branches and some do not.
The Constitution itself empowers Congress “to establish Post Offices and Post Roads;” the United States had a postal service even before adoption of the Constitution: Benjamin Franklin was appointed the first Postmaster General under the Second Continental Congress in 1775. Since the Postal Reorganization Act of 1970, the United States Postal Service has been an independent agency — that is, not a Cabinet agency under direct control of the president — and intended to operate without the need for congressional appropriations. But as its enabling statutes provide, it is “an independent establishment of the Executive Branch of the United States,” and the issue currently before Congress is authorization of emergency appropriations.
By statute, however, agencies cannot augment congressional appropriations. The Miscellaneous Receipts Act provides that “an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any charge or claim.” This statute safeguards the Constitution’s Appropriations Clause, which states, “No money shall be drawn from the Treasury but in consequence of appropriations made by law.”
Despite this seemingly absolute constitutional language, government agencies are permitted to accept for their own uses gifts of money or other property when — and to the extent — they are given explicit statutory authority. Examples of government agencies with such authority include the Department of State, the Library of Congress, the Department of Health and Human Services, and the Department of Justice. The Appendix to the 2019 Federal Budget estimates that the Library of Congress will receive $11 million in charitable gifts in 2020, and that the Department of State will have $13 million in its charitable gift fund.
But no statutory authority permits the United States Postal Service to accept charitable gifts.
Even if such a statute existed, charitable gifts to government agencies raise difficult policy issues. The GAO reported back in 1980 that “agencies’ ability to finance activities with gifts dilutes congressional oversight of agency operations.” As the Yale Law constitutional scholar Kate Stith wrote more than 30 years ago, “Where broad executive discretion is inherent in our constitutional scheme, the most questionable form of spending authority is open-ended authority to receive and spend donations and gifts.”
Thus, we cannot look to philanthropy to save the United States Postal Service. We must instead raise our voices to insist that Congress ensure that the Postal Service has the funding necessary to meet the demands of the upcoming election. We must demand action from Congress, not philanthropists.
Ellen P. Aprill is the John E. Anderson Chair in Tax Law at LMU Loyola Law School in Los Angeles, where she founded the Western Conference on Tax Exempt Organizations.