The Boston city council is asking the largest nonprofits in the city
to pay their “fair share” of taxes for city services – or at least a percentage
of what they would owe if they weren’t tax exempt. (You can read more about it over at the Chronicle of Philanthropy.) Now, no one is arguing that
nonprofits don’t benefit from police/fire services and similar provisions – and
some of them even voluntarily pay to support those services. It might seem
logical when only looking through a small lens to think these larger
nonprofits are capable of paying their own way and not being a burden on the
city’s resources. But what happens if
you look through a different set of lenses, ones that tend to show a bigger
picture? Are these organizations really
a burden – and what does that “burden” look like when you consider the
benefits the city is receiving from these nonprofits?
On the surface, it may seem like a minor issue,
especially as Boston is only looking at the “rich” hospitals and universities
(what does Harvard’s endowment stand at again?). Boston’s city council, like so
many municipalities, is coming up short in the revenue in/revenue out game, so
on one hand, you can’t really blame them for trying to get creative. But suddenly being able to tax any group capable of adding another $404 million to the
city budget is going to be like putting a big fat chicken in front
of a starving fox. To their credit, the
foxes on Boston’s city council only want to nibble at 25% of that chicken –
just a leg and a wing…or two. But we all know the problem with foxes is that
they are rarely content with a wing or a leg…or just one chicken. How much
longer before they start looking longingly, past the plump chickens and at the
rest of the flock?
Boston may be the first to officially start this
hen-house invasion, yet it’s been a hot topic for quite some time
and it’s often been focused on churches. Think about it…churches, are seemingly
“raking in” all that cash every Sunday, and they don’t get taxed on it!
There’ve got to be PILES of money just sitting around, or so the thinking goes,
and those churches aren’t paying their “fair share” for city services. And
let’s not forget the myriad of nonprofits out there as well.
But are churches and nonprofits really sitting on piles
and piles of cash? What if, among the other things they are doing, churches are
actually reducing the costs of services the city would otherwise be forced to
absorb in an amount far and above the other services they receive from the
city? What value do churches, and the nonprofits we work with, provide back to
the community?
Earlier this month, Christianity Today carried an
infographic based on a Univ. of Pennsylvania study by Ram Cnaan,
that showed the break-down of services a church provided to their community.
Cnaan’s 1997 study found that urban congregations provide, on average, $140,000 worth
of services annually and in 2009 he revised his estimate to $476,663.24. In an
upcoming study that measures more intangible benefits, he has
identified a church whose contribution to the community which may actually top
$6 million. Granted, not all churches and nonprofits would be in the $6 million
range, but the premise that nonprofits contribute back more than they receive is
sound.
Simply revoking the tax exempt status of a community's nonprofit organizations won’t fix our cities’, counties’, or state’s financial burdens. In all
likelihood it will exacerbate the problem even more as they would be suddenly
saddled with the added burdens once met by those very organizations. But
cash-starved cities don’t see that – they just see the big, fat chicken. And in
some ways it’s not their fault because we haven’t taken the time to help them
realize the benefits of moving from a fox-hen relationship toward a more
symbiotic one.
We all recognize the intangible results ministries provide to
their communities and often see them doing a good job highlighting the personal impact in
their newsletters. Yet when was the
last time we saw a nonprofit make the case to the community that alcohol
intervention programs result in more stable families (fewer Family Service
Division cases/expenses), fewer DUIs (lower burden on the courts/jail system) and therefore contribute a financial benefit (even transformation) to the
community? It wouldn’t be hard for city councilors to see that $20,000 or $30, 000 in
potential property tax fees is far outweighed by $476,663 in services rendered to the community through the nonprofit.
Nonprofits need to help cities like Boston remember they are
sharing the burden together. Here in Portland, our mass-transit buses are known for
their bumper stickers promoting the benefits of mass-transit -
“Because of me, 218 cars aren’t on the road today.” It’s time nonprofits
started a campaign of their own that says “Because of us, $476,663 of
tax-payer money was saved.”
