Should nonprofits pay taxes?

taxing nonprofits

The town government in Concord, Mass., felt that local taxes were so high, they were driving residents away. So the town’s board sent a letter to the local nonprofits (private schools, hospitals, charities and churches) asking them if they could start paying their fair share, according to a report by Pam Fessler on NPR’s All Things Considered.


Much to my shock,  one arts group offered $1,000. The rest of the groups politely declined.


According to the NPR story, state and local governments, eager to close their budget gaps, are increasingly going after charities and other tax-exempt groups.


Besides the Concord example, it points to Boston, which wants its universities, hospitals and nonprofits to pay 25 percent of what they would owe if they weren’t tax-exempt. However, from what I understand from an article in the Boston Globe, that request wasn’t made to put the squeeze on nonprofits.


Here’s the situation, according to the Boston Globe : Nonprofits in Boston already pay cash and provide services in lieu of property taxes. Some pay millions; others pay significantly less. Because each agreement is negotiated individually, payments vary widely and the ill-defined system has long been the target of criticism. A mayoral task force was set up to examine the system. It is suggesting a new formula under which nonprofits would eventually increase contributions to 25 percent of what they would owe in taxes if they were not exempt.


I think the context of how this change came about is important. It’s not a desperate attempt of a government to balance its budget on the backs of nonprofits, but an attempt to make the system that is already in place more equitable for everyone, including the nonprofits who may have been paying more than their fair share.


At the same time, it should be noted that the change  would more than triple the current amounts paid by some of the city’s biggest nonprofit landowners. It’s easy to see why they would be concerned.


Philadelphia is looking at a similar situation, trying to make its system of payments in lieu of taxes more equitable, according to a blog post on philly.com, a site that  is a partnership between the Daily News and WHYY.


While Kansas and Hawaii proposed repealing the tax-exempt status of nonprofits in budget negotiations, I couldn’t find any news reports that the proposals passed.


Minneapolis has imposed a “streetlight fee” on nonprofits to help pay for electricity and bulbs, and that tactic of imposing fees is perhaps a more real threat to nonprofits than the prospect of having to pay property taxes. As Rick Cohen points out in a blog post on blueavocado.org, it’s easier to impose fees than to repeal property tax exemptions.


“Taking off from charging nonprofits for streetlights, other localities are starting to charge nonprofits for police and fire services and even fire hydrants,” Cohen said.


Is your nonprofit feeling an extra pinch of new government fees? What do you think of these tactics?



Fundraising Assets helps busy fundraising professionals raise more money, save valuable time and reduce costs. We offer consulting, writing, design and production services for direct mail and e-mail fundraising, social networking and more.

34 Comments »

  1. 1

    In our town, we have a payment in lieu of taxes agreement with a large nonprofit organization which equates to 25% of their property tax. Our town is extremely small and when the business changed from a profit business to non-profit, the town lost approximately half of its property tax revenue. The organization has been very gracious in extending the offer and it has made the pinch much easier to take. If they did not extend this offer, our small town would absolutely be forced to give the difference to the residents.
    I think it really depends on the situation. In ours, the deal is a very congenial decision that was nearly necessary to the survival of the town. However, when cities are spending out of control and take from places that need the money to provide essential services, it becomes nearly like a new tax on the people since they lose those services.

    Comment by Jos Myers — May 26, 2010 @ 4:07 PM

  2. 2

    Jos,
    Thanks for that interesting information. It’s great that everyone kept the community’s best interests in mind when they reached that agreement. Sounds like a great place to live!

    The circumstances can be quite different from place to place. Albany, NY, is our state capital and the biggest “industry” there is government. It also has a big state university campus. Put that all together, and its situation resembles yours, where a half the real estate is tax exempt. That puts the city government in a real bind when it comes to supplying police and other services.

    If people can keep the big picture in mind, as your town did, I think people can come up with a fair way to share costs. Of course, that’s not easy to do, and that’s why it’s so rare.

    Thanks for telling us about a town that took the high road!

    Connie

    Comment by Connie — May 26, 2010 @ 4:29 PM

  3. 3

    Smaller non-profits and those that get public funding will pay those fees by cutting staff (already cut to the bone in many cases) or by not giving raises to front line staff – who already make less than people in private industry and often pay more of their health insurance premiums, too. I lost $240/month in pay over the last two years, due to no pay raise and increased health ins. costs. Why not just tax me out of a job so that I can’t pay MY property tax. There has to be a better way.

    Comment by Anne S — May 27, 2010 @ 10:30 AM

  4. 4

    Anne,
    Good point! For many nonprofit organizations, salaries for front-line staff, though small, often are a large proportion of the agency’s budget. Many small nonprofits already don’t have enough staff to do the administrative tasks they must do to stay healthy, such as raise funds. They’re in a starvation cycle. Thank you for your insight.
    Connie

    Comment by Connie — May 27, 2010 @ 10:44 AM

  5. 5

    This has been an active discussion in several spots. To see what others have to say, also go to these groups on LinkedIn:

    Non Profit Network – MojaLink
    http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=20929756&gid=148346&commentID=17279134&goback=.gmp_148346.amf_148346_14522876&trk=NUS_DISC_Q-subject#commentID_17279134

    Non-Profit Marketing
    http://www.linkedin.com/newsArticle?viewDiscussion=&articleID=132135333&gid=161484

    Magnifying Public Relations Ideas for Non-Profits & Associations
    http://www.linkedin.com/newsArticle?viewDiscussion=&articleID=132135333&gid=2465644

    Comment by Connie — June 4, 2010 @ 9:23 AM

  6. 6

    This is undoubtedly a blog that men and women have to get behind. The difficulty is, nobody desires to do an excellent deal of reading and not have some thing else to stimulate the mind. This will be the web, soon after all. Maybe if you added a video or two to emphasise your point. Ill stick around, FOR Sure. But, I dont know if others will.

    Comment by roxy bedding — May 9, 2012 @ 9:23 AM

  7. 7

    I in addition to my buddies appeared to be studying the good recommendations found on the website and so quickly came up with a horrible suspicion I had not expressed respect to the site owner for those strategies. These women are already as a result happy to study all of them and have absolutely been taking pleasure in these things. Many thanks for actually being well helpful and for having this sort of tremendous information most people are really eager to understand about. Our own honest apologies for not expressing appreciation to sooner.

    Comment by opinie — January 4, 2013 @ 11:42 PM

  8. 8

    buty online sklep

    Comment by gry orginalne — January 5, 2013 @ 1:32 PM

  9. 9

    Undesirable services along with poor warning method as soon as your domain will almost certainly end. Their own help declared that e-mail had been sent out if you ask me but none had been get. Actually authorized a whole new site these days with these and their method mentioned a message had been sent to me however nonetheless would not get any email associated with affirmation at their store. As soon as the idea run out soon after 1 week, you will be charge $80 to resume this. The premier host thepremierhost.com scam web host

    Comment by scam web hosting thepremierhost.com — April 2, 2013 @ 2:36 AM

  10. 10

    264902 209883How can I attract much more hits to my composing weblog? 361579

    Comment by aPMVms00bHwLJ — August 15, 2013 @ 5:14 AM

  11. 11
  12. 12

    629731 750073Hello! I just wish to give an enormous thumbs up for the very good data you may have appropriate here on this post. I can be coming once again to your weblog for far more soon. 739714

    Comment by youtube — August 15, 2013 @ 10:12 PM

  13. 13

    146697 957721I got what you intend, saved to my bookmarks , quite decent internet site . 345748

    Comment by 800Score — August 15, 2013 @ 11:58 PM

  14. 14

    621259 376825Really informative post. Your current Site style is awesome as properly! 793746

    Comment by facebook.com/truenutritiondiscountcodes — August 16, 2013 @ 7:20 PM

  15. 15

    737424 698686To your organization online business owner, releasing an essential company will be the bread so butter inside of their opportunity, and choosing a fantastic child care company often means the specific between a victorious operation this is. how to start a daycare 853514

    Comment by acheter aimants — August 18, 2013 @ 4:40 AM

  16. 16

    109105 508254I completely agree with you about this matter. Nice post. Already bookmarked for future reference. 62835

    Comment by roofing kansas city — August 19, 2013 @ 12:09 AM

  17. 17

    621145 982952Its excellent as your other articles : D, regards for posting . 599036

    Comment by cemento impreso valencia — August 19, 2013 @ 7:06 PM

  18. 18

    28595 246238 It

    Comment by content — August 20, 2013 @ 1:05 AM

  19. 19

    353167 104884I truly appreciate this post. I

    Comment by cemento impreso — August 20, 2013 @ 7:02 AM

  20. 20

    651216 324874Where else may anyone get that kind of information in such a perfect method of writing? 454484

    Comment by modern crossbow — August 20, 2013 @ 10:26 AM

  21. 21

    319436 915966There is noticeably lots of cash to comprehend about this. I assume you

    Comment by schoenen en laarzen — August 21, 2013 @ 1:05 AM

  22. 22

    760367 497363I wish I had a dime for every bad post I

    Comment by otto-gutschein.net — August 22, 2013 @ 3:18 PM

  23. 23

    260846 844226After examine a couple of of the weblog posts in your website now, and I truly like your manner of blogging. I bookmarked it to my bookmark website list and might be checking back soon. Pls take a look at my website as effectively and let me know what you think. 793157

    Comment by zalando-gutschein.biz — August 22, 2013 @ 3:19 PM

  24. 24

    101751 194588Normally I do not read post on blogs, even so I wish to say that this write-up quite forced me to look at and do so! Your writing taste has been amazed me. Thanks, quite wonderful post. 965420

    Comment by www.otto-gutschein.net — August 22, 2013 @ 3:35 PM

  25. 25

    517944 278316The particular New york Diet can be an highly affordable and versatile eating better tool built for time expecting to loose fat along with naturally keep a healthful daily life. la weight loss 229625

    Comment by mrthemes wordpress themes — August 22, 2013 @ 3:37 PM

  26. 26

    497745 373852Is going to be back incessantly in order to check out new posts 53480

    Comment by otto gutschein bei otto-gutschein.net — August 22, 2013 @ 4:03 PM

  27. 27

    492755 950375Hi there, i just thought i would publish and now let you know your internet sites style is genuinely smudged within the K-Melon browser. Anyhow sustain inside the quite very good function. 365607

    Comment by cenaless — August 24, 2013 @ 1:47 AM

  28. 28

    463010 33383I would like to see far more posts like this!.. Wonderful weblog btw! reis Subscribed.. 452596

    Comment by C.C. Clegg — August 24, 2013 @ 3:48 AM

  29. 29

    433545 924033You produced some decent points there. I looked on the internet for the dilemma and discovered most individuals will go coupled with along along with your internet site. 263078

    Comment by carb backloading — August 25, 2013 @ 4:17 PM

  30. 30

    183874 642550A really really fascinating write-up! I

    Comment by calories to lose weight — August 25, 2013 @ 6:25 PM

  31. 31

    Are you ready to raise funds for your school, sport team, clubs? TeamNut Fundraising can help your school group or organization accomplish its goals.
    Fundraising Websites in Pennsylvania

    Comment by TeamNut Fundraising — July 14, 2014 @ 5:50 AM

  32. 32
  33. 33

    Hows the situacion at the moment? Any updates?

    Comment by DoJiggy — July 24, 2014 @ 7:00 AM

  34. 34

    Paint clawfoot tub

    Should nonprofits pay taxes?

    Trackback by Paint clawfoot tub — October 12, 2015 @ 9:26 PM

  35. RSS feed for comments on this post. TrackBack URL

    Leave a comment

     

© 2017 Fundraising Assets. Powered by WordPress.
Custom Wordpress Design by 360 PSG.

 Subscribe in a reader