State monopoly of handouts

In Mexico, it is estimated that more than 5,500 civil organizations are dedicated to philanthropic and community actions …

The culture of philanthropy in Mexico has come a long way in recent decades; however, it is below what is found in other countries with a similar population and income. Although the United States is different in these two factors with Mexico, that society has a much more entrenched practice of altruism. A few indicators are enough: In 2020, the total resources that Americans donated to various causes, organizations and foundations was $ 472 billion, equivalent to 2.3% of GDP. Of that total, the majority, 69%, was contributed by individuals. The rest was borne by the corporations, foundations and legacies. 1.54 million civil organizations have been identified that receive donations for their vocation of charity and aid. The main ones are those dedicated to food, clothing, medicine and educational tutoring, with religious organizations being the most important grantees.

These data come from the National Philanthropic Trust (www., where it is also noted that, in 2020, despite the pandemic, 86% of “economically wealthier” adults increased their donations. In Mexico, more than 5,500 civil organizations are estimated that are dedicated to philanthropic and community actions and that receive donations for about 8,000 million pesos (mmp, about 400 million dollars) a year. For individuals, the tax deduction of these donations is an incentive that favors solidarity and fosters a culture of philanthropy.

The measure that the deputies approved as part of the Tax Miscellany 2022 to limit the deductions of these donations, is a devious blow to the operation of these organizations. The SAT pointed out that this limitation responds to abuses that have been detected in 4% of donor individuals who come to deduct up to 500 million pesos. If so, the violators should be punished, but not all donors.

Considering the current deduction of 35% of the 8 mmp of donations, the deductibles would be 2.8 mmp, so what would be collected with this measure is not significant. But many organizations that depend on small donations from individuals would see their operations and even their subsistence threatened. The Telethon, for example, which fulfills an essential function of helping needy children who cannot be cared for by the government, would suffer a significant impact.

The motivation for limiting this deductibility is political and electoral. The president does not want to accept that these organizations play an allied role with the government, since they complement what the government cannot offer in terms of food assistance, medical care, culture, sports, and so on. In line with its statist tendency and to belittle civil society, this government wants a monopoly on granting benefits, although it cannot fully comply with it. He does not tolerate society being supportive and acting altruistically on its own. Hopefully the senators will reverse this aberration that is an obstacle to consolidating a culture of social generosity.

Twitter: @frubli

Federico Rubli Kaiser


IMEF Magazine

Economist graduated from ITAM. He has master’s and doctoral studies in monetary theory and policy, and international finance and trade. Columnist for El Economista. He has been an advisor to the Banxico Governing Board, Director of Institutional Linking, Director of External Relations and Coordinator of the Governor’s Office, Manager of External Relations, Manager of Macro-Financial Analysis, Assistant Manager of Macroeconomic Analysis, Assistant Manager of International Economy and Analyst.

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