Exemptions for Charities Face New Challenges

News Type: Event — Seeded on Mon May 26, 2008 8:47 AM EDT

Article Source: The New York Times

excerpt:"Authorities from the local tax assessor to members of Congress are increasingly challenging the tax-exempt status of nonprofit institutions — ranging from small group homes to wealthy universities — questioning whether they deserve special treatment.

One issue is the growing confusion over what constitutes a charity at a time when nonprofit groups look more like businesses, charging fees and selling products and services to raise money, and state and local governments are under financial pressure because of lower tax revenues.

And there are others: Does a nonprofit hospital give enough charity care to earn a tax exemption? Is a wealthy university providing enough financial aid?
"

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Scott (Scoop) Butki's Column, All of Newsvine
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7.8

{"commentId":1841216,"authorDomain":"sbutki"}

Scott (Scoop) Butki

I saw a great bumper sticker yesterday: If religious groups want to get into politics they should pay taxes. Thought that was perfect. What do you think? Should religious charities be tax-exempt? What about other charities?

{"commentId":1841216,"threadId":"269833","contentId":"1512419","authorDomain":"sbutki"}

2 votes

#1 - Mon May 26, 2008 8:48 AM EDT

{"commentId":1841559,"authorDomain":"stuartscadronwattles"}

I'll Go On

Religious charities should be tax-exempt. The non-profit movement in this country and the tax laws that enable it is one of the great lights to the nation and the world.
You are aware that the IRS requires already requires a separate filing for any NFP that is engaged in lobbying activities?
Any faith-based organization that is engaged in political activity should not be operating as a religious charity. That is illegal.
This means that we should definitely tax any videos that profit from Jesus' clearing of the temple scene, which my be seen as a religious act, but is in fact political.
Amen? Amen.

{"commentId":1841559,"threadId":"269833","contentId":"1512419","authorDomain":"stuartscadronwattles"}

2 votes

#2 - Mon May 26, 2008 11:44 AM EDT

{"commentId":1843881,"authorDomain":"sbutki"}

Scott (Scoop) Butki

Any faith-based organization that is engaged in political activity should not be operating as a religious charity. That is illegal.

Yes but it's happening a lot

Which is why Charles Grassley is investigating some major evangelical groups spending practices.

Seems like everytime I hear an evangelist on tv it's them commenting on political issues.

I'm not saying valid religious groups that are politics-free shouldn't be allowed to keep their tax exemptions? But the Religious Right groups that use their tax exemptions to attack dems.. that's not fair or right.

{"commentId":1843881,"threadId":"269833","contentId":"1512419","authorDomain":"sbutki"}

2 votes

#2.1 - Tue May 27, 2008 9:10 AM EDT

{"commentId":1841567,"authorDomain":"stuartscadronwattles"}

I'll Go On

Almost 88 percent of overall nonprofit revenues in 2005, the most recent year for which figures are available, came from fees for services, sales and sources other than charitable contributions, according to the National Center for Charitable Statistics.

This is largely because NFPs have seen a decline in donations, and are encouraged by their boards to act like for-profits an create revenue streams. Not all for-profit business models work for NFPs, but boards like them.

{"commentId":1841567,"threadId":"269833","contentId":"1512419","authorDomain":"stuartscadronwattles"}

1 vote

#3 - Mon May 26, 2008 11:49 AM EDT

{"commentId":1841579,"authorDomain":"stuartscadronwattles"}

I'll Go On

If religious groups want to get into politics they should pay taxes.

Seen it as well. The IRS already requires a declaration of political activity for every NFP filing a return. Anyone engaged in such activity has to file a separate financial statement for that activity. The savvy NFPs engaged in substantial work of that kind have separately established entities to do so. After all, the people who fund that work fund it well; they don't need to be conned into doing it.

And what about those Myanmar monks who took to the streets? Tax their banners-- NOW.

{"commentId":1841579,"threadId":"269833","contentId":"1512419","authorDomain":"stuartscadronwattles"}

2 votes

#4 - Mon May 26, 2008 11:53 AM EDT

{"commentId":1843883,"authorDomain":"sbutki"}

Scott (Scoop) Butki

So are you saying that this is not a real problem?

{"commentId":1843883,"threadId":"269833","contentId":"1512419","authorDomain":"sbutki"}

1 vote

#4.1 - Tue May 27, 2008 9:11 AM EDT

{"commentId":1844148,"authorDomain":"stuartscadronwattles"}

I'll Go On

I am saying that the spirit of prophecy and the spirit of authority are naturally at odds. An enlightened establishment provides a tax shelter for religious activity. To provide one for the exercise of prophetic liberty would be extremely enlightened.
And yet, most religious activity of any substance has both charity and prophetic functionality.
This issue is actual, historic, acute and culturally universal.

... and here I use "prophecy" in the defined sense:
"1 a person regarded as an inspired teacher or proclaimer of the will of God : the Old Testament prophet Jeremiah. • ( the Prophet) (among Muslims) Muhammad. • ( the Prophet) (among Mormons) Joseph Smith or one of his successors. • a person who advocates or speaks in a visionary way about a new belief, cause, or theory :"

{"commentId":1844148,"threadId":"269833","contentId":"1512419","authorDomain":"stuartscadronwattles"}

1 vote

#4.2 - Tue May 27, 2008 10:40 AM EDT

{"commentId":1844285,"authorDomain":"johnlam"}

John Lam

I see a criteria in your example of Buddhist monks in Myanmar: were they subject to US tax law, in exercising their moral duty to protest corrupt rule, they can claim rights of free speech and religion, so long as they do not endorse candidates or contribute to political parties.

the spirit of prophecy and the spirit of authority are naturally at odds.

…and what of the Roman Catholic or Anglican churches and dominant or national churches, or the mission of Jesus, or the reliance of rulers on Tiresias in Greek mythology? How do you define prophecy?

{"commentId":1844285,"threadId":"269833","contentId":"1512419","authorDomain":"johnlam"}

1 vote

#4.3 - Tue May 27, 2008 11:21 AM EDT

{"commentId":1844837,"authorDomain":"stuartscadronwattles"}

I'll Go On

Good point on the criteria for the Myanmar example.
The US criteria for NFPs allow religious organizations to claim tax exemption for prophetic action, but not for political action (that may stem from prophetic stimulus).
For my purposes, the definition I quoted above suits my meaning for "prophecy":

a person who advocates or speaks in a visionary way about a new belief, cause, or theory

The national churches have become national by supporting the nation. How is this in imitation of Christ's prophetic spirit?

{"commentId":1844837,"threadId":"269833","contentId":"1512419","authorDomain":"stuartscadronwattles"}

1 vote

#4.4 - Tue May 27, 2008 2:09 PM EDT

{"commentId":1844375,"authorDomain":"johnlam"}

John Lam

Levying such taxes on not-for-profits may ultimately hurt society, and politicians supporting such levies may hurt their chances for reelection, the ultimate arbiter.

With narrow purposes and community volunteers, not-for-profits do more to aid the poor and foster community than does government with its broad powers and political rule. Not-for-profits even with dubious claims to status seem to me the lesser of two evils. Such argument also jives with broader economic theory—taxes cause dead weight loss—and also with even broader social capital theory.

{"commentId":1844375,"threadId":"269833","contentId":"1512419","authorDomain":"johnlam"}

1 vote

#5 - Tue May 27, 2008 11:45 AM EDT

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SCOTT (SCOOP) BUTKI

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