Wednesday, July 22, 2009

Sunset Provision Suggested for Non-Profits

The Philanthropy Journal draws attention to the interesting suggestion made by Tom Belford on his blog, The Agitator, that the IRS introduce a sunset provision on the designation of “charitable status.” Recent news reports that urged Massachusetts’ 36,000 nonprofits to consider merging and highlighted the inefficiency and potential harm the myriad of “unregulated” aid groups operating in the health field can create, led Belford to the conclusion that the nonprofits should meet some sort of performance measure or close their doors. 

Belford’s suggestion for a sunset provision of some kind on the IRS charitable status is meant to support a “perform or die” methodology, in which the non-profits “ … figure out a way . . . to establish that [their] nonprofit actually is performing… performing in the sense of achieving substantial goals, not just processing stuff.”

Though he admits his approach may be found crude by some readers, his theory that Massachusetts or Africa would not be worse off if half as many non-profits were expending the same level of resources in each region, has merit.

 SS

http://lawprofessors.typepad.com/nonprofit/2009/07/sunset-provision-suggested-for-nonprofits.html

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