Saturday, October 15, 2011
Much has been made in recent years of for-profits moving into areas traditionally dominated by nonprofits such as education and health care. What has been less noticed has been the trend of governments and even occasionally for-profits turning over organizations and activities to nonprofits, although not always without controversy. Here are several recent developments along those lines:
- California State Parks: The Bay Citizen reports that Governor Jerry Brown signed a bill (A42) earlier this month authorizing the California Department of Parks and Recreation to enter into agreements with nonprofits to keep open up to 70 state parks scheduled to close this summer because of the state's budget crisis.
- Florida For-Profit University Becomes a Nonprofit: The Sun Sentinel reports that Keiser University began its 35th year by converting from for-profit to nonprofit status after having been bought out by the nonprofit Everglades University. Keiser currently has 16,500 students on 15 campuses offering both associate's and bachelor's degrees. According to its website Keiser is now a section 501(c)(3) organization as well.
- Massachusetts Blue Cross to Remain a Nonprofit Public Charity: The Boston Globe reports that Blue Cross Blue Shield of Massachusetts has decided to remain a nonprofit public charity under state law after reviewing other possible legal structures. The review was triggered by public and government official outrage over a multi-million payment to the organization's former chief executive and five-figure annual fees paid to its directors, the latter of which have been suspended indefinitely.
- Miami-Dade Proposal to Turn Public Hospital Into Nonprofit Dies, At Least for Now: The Miami-Dade Herald reports that a task force proposal to change control of the Jackson Health System from Miami-Dade County to a newly created nonprofit is apparently dead in the face of vigorous union opposition. The task force arose after a grand jury report sharply criticized the operation of the System, including meddling by county commissioners.
- New Orleans Nonprofit Faces Cut-Off of Government Funds: The New Orleans Times-Picayune reports that the New Orleans Federal Alliance, a nonprofit created to steer the conversion of the former Naval Support Activity location into a mixed-use development, is in a financial crisis because the local Algiers Development District board is withholding promised funds in an attempt to gain control of the project.
- Washington, DC Charities Face Loss of Fannie Mae and Freddie Mac Support: The Washington Post reports that the now government-controlled housing financing giants are reducing and may eventually totally eliminate their funding of local nonprofit organizations. Fannie Mae, which shut down its foundation in 2007 and since has providing funding to nonprofits directly, and the Freddie Mac Foundation have together given nearly $100 million to 500 local organizations over the past four years, even after sharply cutting their donations since 2008.