Corporate philanthropy is increasingly seen as an effective way to promote social equity. This paper estimates the effect of donation tax deduction policy on corporate donations. Using data from Chinese A-share listed companies, we find that the donation tax deduction policy has a significant positive effect on the amount donated. This finding remains robust to a number of robustness tests. Meanwhile, our study also suggests that the policy increases donation participation. Finally, heterogeneity analysis suggests that the effect is significant only for firms with high media attention and political connections. Our findings provide important evidence for the optimizing of social welfare.