Isaac asks another important question:
I know there are quite a few people from the arts advocacy and funding sector who read this blog, so I have to ask: are there studies out there that can tell us whether Drum is right? Has anyone reliable gamed out what the potential impact of doing away with charitable deductions would be? Because I think this is the kind of scenario where data is really going to drive the argument.
No clue what the answer is.
However. I do have to point out that there's another comparable deduction, which is the deductions of losses for small business owners.
I, as a small business owner, have the right to deduct any losses I take after my profits from my income, if I make an income from a different source. In other words, I could donate to charity, or I could invest income into my business, and it is equivalent in terms of tax deduction terms. (And it runs into similar skepticism -- see "Proving Your Hobby Is A Business")
The reason I bring this up is because if we proposed taking away that tax deduction, you would never the end of it. What's the economic case for that tax deduction? Because it's based on the same theory -- allowing people to deduct their "losses" (a donation being a "loss" from an individual capitalist perspective, as you are giving money for nothing in return) to further a social goal (building the economy, or building culture/education/literacy).