ABSTRACT
This chapter discusses a collection of quintessential charitable institutions to determine how they would fare under the donative theory. As the Supreme Court explained in Walz v. Tax Commission, tax exemptions for churches are the product of an "unbroken" history that "covers our entire national existence and indeed predates it." The donative theory would solve many of the most difficult of these administrative issues, although a few admittedly would remain. Like exemption for religious institutions, tax exemption for private educational institutions has been virtually unquestioned since colonial times and remains so. In fact, several colonies even extended local tax exemption to the professors who taught in colleges or universities as well as their students. The breadth of the federal tax definition of an "educational institution" has resulted in administrative problems akin to those faced by the IRS and the courts in the religious institution area. Educational institutions are often cited by commentators as paradigm donative entities.
