Heyday for Cynics

Posted by Laura Otten, Ph.D., Director on April 9th, 2010 in Articles, Thoughts & Commentary

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No matter how cynical you get, you can never keep up.”
-Lily Tomlin

The chant is getting louder:  “Tax the nonprofits!  Tax the nonprofits.  It’s the answer to all our problems.  They get away with everything.”

Every day I’m reading of another jurisdiction looking to tax nonprofits–all or some–from Honolulu seeking to rescind the property tax exemption of nonprofits to Pittsburgh wanting to not only rescind the property tax but put a tax on tuition paid to its numerous colleges and universities; from Kansas seeking to add a sales tax to the items nonprofits purchase, to some of its local jurisdictions wanting to rescind the property tax exemption for all nonprofits, to Georgia that is considering just rescinding the property tax exemption just for hospitals, while Rhode Island’s legislature is considering rescinding the 7% sales tax exemption for its 6,600 nonprofits.  The Boston Globe recently reported  that a task force is readying recommendations that would eventually seek up to the equivalent of 25 percent in contributions from tax-exempt entities in that city.

And the list goes on and on.

Why?  Because state and local governments’ coffers are, like everyone else’s, running low.   So, where to turn to reverse the coffers’ drain?  Let’s go for the deep pockets!  Let’s go for the nonprofits!  Whose brilliant idea is this?

The reality is that they have picked wisely for they have picked the weakest link in the chain.  Try suggesting an increase in residential property taxes and immediately the hue and cry is raised.  Neighborhood associations take up the attack; politicians from the opposite side of the aisle of the mayor’s/governor’s party start hurling barbs; political advisors start predicting defeat for the party in the next election.  The local association of realtors may even get involved.

Or, try as Philadelphia Mayor Michael Nutter recently did, and propose that one way to make up some of the shortfall in the City’s budget would be to tax soda sales.  There was an immediate outcry from the heavy, deep pocket soda manufacturers and the unions of employees involved in the production and delivering of soda.  And of course, the voice of shops that sell soda and restaurants that serve soda chimed in as well.

When the suggestion is made that the property tax on for-profit businesses gets increased, you know what happens.  The associations of every kind of property-owning businesses descend on the politicians, as do those responsible for wooing future businesses to the area.  After all, we don’t want to frighten off the businesses.

And of course, the local politicians will all chime in on whichever cause(s) is most represented in his/her district.

So who rushes to the aid of the nonprofits when they are threatened with taxes that most simply cannot afford?  With the exception of the large hospitals and universities, and the small minority of equally large nonprofits that more resemble for-profit businesses than a nonprofit, most nonprofits don’t see—or have–the available time, personnel or money to go argue their cause.  Thus, they are an easy target; few fight back.

Unfortunately, because too many in society do not understand what nonprofits do, don’t see them operating around them, don’t know how they are influencing their daily lives, nonprofits become an easy target for cynicism.  To too many, we are scoundrels and beggars who hide behind the nonprofit shield and “get away with too much.”  There is less recognition of the good that nonprofits do, of the help they quietly provide to communities day in and day out, of the enrichment they add to our lives, the succor given to those with no where else to go, of the problems they redress, etc.  And there is little recognition of the millions employed by nonprofits who work for far less than they could earn in the for-profit world because they want to provide such services, because they want to ensure that our communities are vibrant and healthy.

But, hey, let’s go ahead and make it even harder for the good guys.

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.