This chapter engages from a normative perspective with one specific function that philanthropy can perform in the nonideal circumstances of concrete public institutional action. This is a remedial function that philanthropy may perform in the face of institutional failures. Insofar as philanthropy can mobilise valuable skills and resources compensating for such failures, the state is justified to incentivise it in nonideal conditions. Nevertheless, when these incentives occur through taxation, they may have the adverse effect of draining resources from the state, thus further undercutting its action. An institutional short-circuit may thus occur by which public institutional action risks being entangled in a vicious and self-defeating circularity. This chapter discusses such institutional short-circuits within the normative framework of an institutional ethics of ‘office accountability'. This framework serves as a basis for exploring the boundaries of the moral justification of tax incentives for philanthropy as a particular means to uphold public institutional action from the outside a public institution when the interrelated action of officeholders fails to sustain it from the inside.