Monday, May 20, 2013
The modifier "nonprofit" can make a corporation sound downright humble. But not every nonprofit is a shoe-string operation run by volunteers.
Despite their tax-exempt status, some nonprofits are big businesses that pay their leaders hefty salaries. This is particularly true of big hospitals and affiliated organizations, which take large swaths of prime real estate off the tax rolls. The community benefits from their services and they are big employers, but while other taxpayers are struggling make ends meet, they don't help pay for schools or other services.
This is a thorny, long-term problem for service-center cities like Portland, which give million in tax breaks to nonprofits while trying to figure out how to afford police and fire and public works. And under the law, there is very little that a municipality can do.
But there is nothing preventing nonprofits from volunteering to do more for the communities that host them, and many do. In Portland, 14 nonprofits make payments in lieu of taxes. City officials are considering a program to formally engage nonprofits and encourage them to help ease the burden for other local property owners.
It's based on a program in Boston, where the city's real estate is dominated by universities, hospitals and cultural sites that would suffer if their host community was unsafe.
The Boston program doesn't require nonprofits to participate, but it does set guidelines and payment formulas for those that choose to participate. Massachusetts General Hospital will make $3.5 million payment in lieu of taxes to Boston this fiscal year, while Boston University will pay $5.3 million.
Getting the organizations to participate will take some work, but they may find it worth what they end up paying by chosing to be a better corporate citizen. At a time when state and federal funding is drying up and taxpayers are at a breaking point, the city is right to ask its nonprofit sector to do more.