The hearing of the House Ways and Means Committee raised questions about the types of groups deserving of tax-exempt status.  The Chronicle of Philanthropy (April 20, 2005) reported that according to the chair of the Committee, Rep. William M. Thomas, (R-CA), and legal scholars who testified at the hearing, "the tax code lacks a coherent rationale for determining which organizations should qualify for tax-exemption." 

John D. Colombo, professor at the University of Illinois College of Law, proposed that tax exemptions should only be granted to organizations that are "substantially dependent on donations for their operating revenues."  In contrast, Frances R. Hill, professor at the University of Miami School of Law, said that tax exemptions should only be granted to organizations that can demonstrate that they are "providing a public benefit to a defined category of beneficiaries."

Read the full article here.