This is the slow yet steady process by which regulators regard charities more as for-profit corporations. I’ve blogged it before.
- The Chronicle of Philanthropy reports Pittsburgh is collecting payments in lieu of taxes (PILOTs) from charities and Memphis is considering the same. The Memphis coverage states, “Over the last decade PILOTs for tax-exempt entities have been used in at least 117 municipalities in at least 18 states.”
- When I interviewed (see the last 2 minutes)The Nonprofit Times‘ editor-in-chief Paul Clolery for Nonprofit Radio, he shared his concern that the lines are blurring between corporate and charitable. He sees California’s B Corp (a designation under which for-profit corporations provide a benefit to the public) as the first step toward a request for relief from taxes in proportion to the societal benefit. Do you see the harsh irony as charities lose favorable tax treatments?
- Many states have something similar to the B corp, the low-profit limited liability corporation, or L3C.
- Last month, The Chronicle had a very interesting and slightly startling opinion piece about the supreme court’s Affordable Healthcare Act decision making it easy for Congress to curtail charity tax exemptions and charitable deductions.
These signal a blurring of the distinction between charitable and corporate, and a loss of the special perquisites that keep charities thriving and donors giving.
I think about these together and I’m troubled.