Ultimately charity is charity. People will spend on it what they feel like spending. Taxes just reduce what you can pay, not increase it. Donating to charity for your typical middle class person is still a bad deal, no matter how you slice it, financially speaking. If you have your money, own your money and can control where it goes then that's much more of an incentive to spend on charity than some pathetic 20% discount that most people can't afford anyway.