Is there an incentive for entities to take advantage of tax deductions that don't direclty benefit them?

Canada has a tax credit for donations to charitable organizations, but the credit is for a percentage (less than 100%) of the amount donated. Similarly in the United States, charitable donations reduce one's taxable income but do not reduce the tax owed by the full amount of the donation. In rare cases, there can be 100% credits for certain donations (for example, the U.S. state of Georgia offers a 100% credit up to a certain amount for donations to Student Scholarship Organizations).

The government does want to incentivize charitable donations, not because the charity spends money and stimulates the local economy, but because charitable organizations perform important services for the community and rely on donations to survive because their work is not profitable. Tax credits or deductions provide that incentive to people who are already otherwise inclined or at least interested in supporting those charitable causes. But you can never end up making money by donating to charity. You'll always end up with less money (or in the rare case like the Georgia SSO donation credit, the same amount of money) as if you did not donate. The incentives simply make the cost of donating to charity less because you'll end up paying somewhat less in taxes.