Thursday, April 10, 2014
Last week we blogged on a report out of the University of Michigan regarding the impact of tax exempt property owners on city coffers. Click here to listen to Michigan Public Radio discuss the report. There is an accompanying article here.
Tuesday, April 1, 2014
When it comes to the benefits and burdens that tax exempt organizations bring to local communities, there is always unsupported rhetoric on both sides. Supporters of tax exempt organizations claim, if only meekly, that they bring more benefits to their communities then their communities bring to them. Local government leaders claim just the opposite, particularly in connection with their demands for PILOTS. A March 2014 report from the Gerald Ford Center at the University of Michigan contains a dispassionate discussion of the issue and, though it focuses on local governments in Michigan, is well worth reading. Here is the conclusion:
ConclusionMichigan’s local governments have been hit by decreasing revenues, due largely to both falling property values and the taxes those properties generate, and cuts to revenue sharing from the state government. Property tax revenues—one of the most important sources of funding for local government—are further constrained by the fact that many properties within Michigan’s communities are exempted from paying taxes in the first place. While Michigan’s local leaders are more likely to say the tax-exempt properties (TEPs) in their communities are relatively insignificant when measured as a portion of their jurisdictions’ total land area, potential tax revenues, and sources of service demands, nonetheless, significant percentages say TEPs are in fact moderate or significant factors in these ways. Tax-exempt properties, and the organizations that own them, can be assets and/or liabilities to their local communities. On one hand, they can help attract tourists and can provide jobs, medical services, human services, a more highly educated workforce, and much more. In these ways they might help produce more economic and quality of life benefits to a community than they cost in forfeited revenues. On the other hand, they can also introduce additional costs and burdens on the local government, such as the need for police and fire protection, water and sewer services, street lighting, and street plowing and maintenance. And because they don’t pay property taxes, they enjoy these kinds of benefits while others in the community must cover the associated costs.For the most part, the MPPS finds that local leaders in Michigan see the TEPs in their jurisdictions as a mixed blessing in terms of their impact on the jurisdictions fiscal health. Overall, 40% say their TEPs are both assets and liabilities to fiscal health, while 26% say they are primarily assets, and just 15% say they are primarily liabilities. However, in jurisdictions where TEPs have a significant presence, 40% of local leaders view them primarily as liabilities to fiscal health. In terms of their impact on a community’s quality of life, TEPs are more likely to be viewed as assets. Overall, 46% of local leadersview their TEPs as assets in this way, while just 7% see them as liabilities. Statewide, a relatively small portion of Michigan’s local jurisdictions appear to be actively investigating options to generate new revenues to offset the property tax revenues that are currently exempted. Just 24% of local jurisdictions with TEPs say these kinds of issues have been discussed recently among local leaders. However, this shifts dramatically in locations where local leaders say TEPs have a significant presence. In these cases, 60% of MPPS respondents say local leaders in their jurisdictions have discussed these issues ecently, and note that they are looking into a range of options to charge currently exempted properties for the services they receive, with policies such as new millages, fees-for-service, payments-in-lieu-of-taxes agreements, and special assessment districts.
Thursday, November 28, 2013
The NonProfitTimes is reporting that a recent study on charitable giving reveals that charitable giving increases significantly when the recipients are religiously-linked nonprofits. According to the Times:
Some 41 percent of all U.S. donations go to religious congregations. That number jumps to 73 percent when religiously-linked nonprofits such as Catholic Charities, the Salvation Army and Jewish federations are included. Those are some results from the Lilly Family School of Philanthropy at Indiana University study called “Connected to Give: Faith Communities.”
The study, carried out by the Lilly School in conjunction with Los Angeles, Calif. nonprofit research lab Jumpstart and GBA Strategies in Washington, D.C., is the third of six reports. It surveyed 4,862 American households of various religious traditions.
Four out of five Americans identify themselves with a particular religion. Of those, 65 percent give to congregations or charities. Of those who do not identify with a religion, 56 percent give. “The 9-point difference is due largely to contributions from (religiously) affiliated Americans to organizations with religious ties,” wrote the study’s authors.
“It’s like putting on 3-D glasses,” said one of the study’s authors, Shawn Landres, Ph.D., CEO and research director of Jumpstart, via a statement from the Lilly School. “In addition to looking at congregations, when we also look at the religious identity of the organization and the religious or spiritual orientation of the donor, it turns out that a majority of Americans contribute to organizations with religious ties and a majority of Americans cite religious commitments as key motivations for their giving.”
Almost two-thirds, or 63 percent, of Americans gave to congregations or charitable organizations in 2012, with a median gift of $660. Congregations saw the highest median gift at $375. The median gift to not religiously identified organizations (NRIOs) was greater than that of religiously identified organizations (RIOs), at $250 to $150.
“When it comes to religious identity and giving, demographic categories like income and age resist generalization,” wrote the report’s authors. While the report says that religious denomination alone does not affect giving, other factors help shape rates of giving among the denominations, according to the authors. Jews give at the highest rate to religious and charitable denominations, at 76 percent. Christians — black Protestants, Evangelical Protestants, mainline Protestants and Roman Catholics — all give at similar rates, between 61 percent and 68 percent. Those identifying as not religiously affiliated give at the lowest rate, 46 percent.
The study also examined people's motivation for giving. As reported by the NonProfitTimes, the study revealed that
More than half of Americans who give, or 55 percent, said that religion is an important or very important motivation for charitable giving. Other common motivations include believing they can make a change through giving (57 percent) and thinking they should help others who have less (55 percent).
What a heart-warming story. Happy Thanksgiving to all.
Tuesday, October 15, 2013
Evaluating the reasonableness of compensation paid by charities to their executive officers is, of course, essential to determine compliance with Internal Revenue Code section 501(c)(3)’s prohibition against private inurement of net earnings and to avoid excise taxes under Code section 4958 (in the case of public charities and section 501(c)(4) entities) and Code Section 4941 (in the case of private foundations). A helpful resource for evaluating executive compensation is Charity Navigator’s recently issued annual study of charity CEO pay, available here. Among the more interesting findings highlighted in the accompanying press release are these:
Modest raises are the norm since the recession: Salaries for the CEOs in this study increased modestly since the recession: just 0.8% from 2008 to 2009 and 1.5% from 2009 to 2010 and 2.5% from 2010 to 2011. These fairly small increases come after the 4.7% median increase charity CEOs received from 2007 to 2008.
Charity CEOs that aspire to have big salaries are more likely to succeed if they work at an Educational charity: The data shows that top pay at charities can vary greatly by mission with the heads of Educational charities earning as much as $90,000 more than those running Religious charities.
Geography influences the top executive's salary: CEO salaries at nonprofits reflect the regional variation in the cost of living. For example, CEOs at charities in the Northeast ($149,523) and Mid-Atlantic ($147,474), which include Boston, Washington D.C. and New York, tend to earn higher salaries, than those in the Mountain West ($108,893) and Midwest ($114,050), which include Milwaukee, Boise and Salt Lake City.
Notably, the study concludes by acknowledging “that the paychecks of some nonprofit executives are outrageously high,” but confirming “that those receiving excessive pay are in the minority.”JRB
Monday, October 14, 2013
The Chronicle of Philanthropy today is reporting the results of a nonscientific poll conducted by the Nonprofit Finance Fund on the effects of the partial government shutdown on the nonprofit sector. Of participating nonprofits that receive federal aid, 43 percent of 97 respondents report that their payments have been delayed, and 15 percent report that their payments have been halted. The remainder report either timely payments, or payments that are late, as usual. Further poll results are that 18 percent of respondents have ceased or reduced the scale of programs in response to the shutdown, and 5 percent have terminated or furloughed employees. Human-service and arts organizations reportedly comprise a slim majority of the poll to date.
Sunday, September 22, 2013
The Congressional Research Service has issued a report on "501(c)(3)s and Campaign Activity: Analysis Under Tax and Campaign Finance Laws" (copy courtesy of the Election Law Blog). Here is the CRS-prepared summary of the report:
The political activities of Section 501(c)(3) organizations are often in the news, with allegations made that some groups engaged in impermissible activities. These groups are absolutely prohibited from participating in campaign activity under the Internal Revenue Code (IRC). On the other hand, they are permitted to engage in nonpartisan political activities (e.g., distributing voter guides and conducting get-out-the-vote drives) that do not support or oppose a candidate. Determining whether an activity violates the IRC prohibition depends on the facts and circumstances of each case, and the line between impermissible and permissible activities can sometimes be difficult to discern.
Due to the IRC prohibition, Section 501(c)(3) organizations generally are not permitted to engage in the types of activities regulated by the Federal Election Campaign Act (FECA). However, the activities regulated under the IRC and FECA are not necessarily identical. An organization must comply with any applicable FECA provisions if engaging in activities regulated by FECA (e.g., making an issue advocacy communication under the IRC that constitutes an electioneering communication under FECA).
A 2010 Supreme Court case, Citizens United v. FEC, has received considerable attention for invalidating several long-standing prohibitions in FECA on corporate and labor union campaign treasury spending. This case does not appear to significantly impact the political activities of Section 501(c)(3) organizations because they remain subject to the prohibition on such activity under the IRC.
This report examines the restrictions imposed on campaign activity by Section 501(c)(3) organizations under the tax and campaign finance laws. For a discussion limited to the ability of churches and other houses of worship to engage in campaign activity, see CRS Report RL34447, Churches and Campaign Activity: Analysis Under Tax and Campaign Finance Laws, by Erika K. Lunder and L. Paige Whitaker.
Thursday, July 25, 2013
The National Council of Nonprofits has issued the July 15 edition of Nonprofit Advocacy Matters. An outline of the contents of this issue follows:
- Tax Reform
- Sequestration Spotlight
- Federal Workforce Giving
- Charitable Giving Incentives: HI, ME, NC, OR
- Taxes, Fees, PILOTs: NJ, RI, TX
- Government-Nonprofit Contracting: CO, NY
- Parks Funding: NY
- Music Funding: NY
Advocacy in Action
Of the several stories of interest, one may foreshadow the continued viability of the charitable contributions deduction through federal income tax reform. The story reports that a handful of states have either enacted or proposed to enact caps on itemized deductions for state income tax purposes, but have not subjected the charitable contributions deduction to those caps. An exception is Maine, which has passed a budget limiting total itemized deductions (including the deduction for charitable gifts) to $27,500.
Friday, May 31, 2013
In addition to the 501(c)(4) exemption application bombshell, attendees at this month's ABA Tax Section meeting also learned about the serious bipartisan tax reform effort being led by House Ways & Means Committee Chairman Dave Camp (R-Michigan) and Senate Finance Committee Chairman Max Baucus (D-Montana). Because Representive Camp is approaching his term-limit as Ways and Means Chairman at the end of 2014 and Senator Baucus has already announced his retirement as of 2014, these two experienced members of Congress are somewhat insulated from the normal political pressures that might derail such an initiative. Their effort has already generated a series of "option papers" that are actually what they say they are - a discussion of possible tax reform options in a variety of areas without endorsement of or partisan sniping regarding any particular set of possible changes. It also has been the subject of 20 separate Ways and Means Committee hearings, as described on the Committee's Comprehensive Tax Reform website.
Tax reform has also been the focus of eleven Ways and Means Committee working groups, including one relating to Charitable/Exempt Organizations. For a detailed summary of both the present law in this area and the suggestions and comments received by this working group and the other working groups, see the Joint Committee on Taxation report issued earlier this month. The exempt organization sections can be found on pages 19-57 (present law) and 491-497 (suggestions and comments received). Here are the headings for the latter section, which covered the whole gamut of possible options:
1. The Charitable Deduction
General support for preservation of the charitable deduction or opposition to changes to
the charitable deduction
General support for reform of the charitable deduction
Charitable contributions of property
Other comments relating to the charitable deduction
2. Tax-Exempt Status
Public charity status and private foundation operating rules
Unrelated business income tax (“UBIT”)
Specific types of tax-exempt organizations
3. Reporting, Disclosure, or Tax Administration
4. Exclusion from Gross Income for Qualified Charitable Distributions fron an Individual Retireement Arrangement ("IRA")
5. Miscellaneous Comments Submitted by Indiana Tribal Governments
Having reviewed these materials and talked with some of the staffers at the ABA meeting, I actually am cautiously optimistic that tax reform is a possibility. What effect any reform will have on exempt organizations is impossible to predict at this point, but certainly significant changes to both the charitable contribution deduction and the requirements for tax exemption are on the table.
Friday, May 3, 2013
Late last month, the Service issued its Final Report of the Colleges and Universities Compliance Project. The report is based on "the responses to Questionnaires the IRS sent to a sample of 400 colleges and universities and on the results of examinations of 34 colleges and universities. Among the highlights:
- Increases to unrelated business taxable income for 90% of colleges and universities examined totaling about $90 million;
- Over 180 changes to the amounts of UBTI reported by colleges and universities on Form 990-T; and
- Disallowance of more than $170 million in losses and NOL's (i.e., losses reported in one year that are used to offset profits in other years) which could amount to more than $60 million in assessed taxes.
The IRS also determined that nearly 40% of colleges and universities examined had misclassified certain activities as exempt or otherwise not reportable on Form 990-T. Fewer than 20 percent of these activities generated a loss. The examinations resulted in the reclassficiation of nearly $4 million in income as unrelated, subjecting those activities to tax.
Finally, the report notes that about 20% of private colleges and universities implemented procedures that would qualify them for the rebuttable presumption against engaging in an excess benefit transaction with respect to IRS 4958 (Intermediate Sanctions). Those institutions not qualifying for the rebuttable presumption had the following problems:
- Comparability data from institutions that were not similarly situated to the school relying on the data, based on at least one of the following factors: location, endowment size, revenues, total net assets, number of students, and selectivity;
- Compensation studies that neither documented the selection criteria for the schools included nor explained why those schools were deemed comparable to the school relying on the study.
- Compensation surveys that did not specify whether amounts reported included only salary or included total other types of compensation, as required by section 4958.
The Executive Summary suggests that the IRS will focus on UBTI issues more closely, as those issues relate to Colleges and Universities:
The examinations of college and universities identified some significant issues with respect to both UBI and compensation that may well be present elsewhere across the tax-exempt sector. As a result, the IRS plans to look at UBI reporting more broadly, especially at recurring losses and the allocation of expenses, and to ensure, through education and examinations, that tax-exempt organizations are aware of the importance of using appropriate comparability data when setting compensation.
Tuesday, March 5, 2013
From the Council on Foundations Press Release regarding its March 4, 2013, 70 page report entitled, "The IRS and Nonprofit Media: Towards Creating a More Informed Public".
(Washington, D.C.) The Nonprofit Media Working Group, a nonpartisan group of foundation and nonprofit media leaders, today recommended that the IRS modernize its rules to remove obstacles in the way of nonprofit news outlets.The group, created by the Council on Foundations, released a report, “The IRS and Nonprofit Media: Toward Creating a More Informed Public,” which states that the agency’s “antiquated” approach to granting tax-exempt status has undermined the creation of new media models. Although the IRS has a long history of approving the tax-exempt status of media organizations ranging from National Geographic to Pro Publica, in recent years it has become inconsistent and slower in its approvals. “Over the last several decades, accountability reporting, especially at the local level, has contracted dramatically, with potentially grave consequences for communities, government accountability, and democracy,” said Steven Waldman, chair of the Nonprofit Media Working Group. “Nonprofit media provides an innovative solution to help fill this vacuum, but only if the IRS modernizes its approach.”
The Nonprofit Media Working Group was created by the Council on Foundations with a grant from the John S. and James L. Knight Foundation, following the recommendation by the Federal Communications Commission that a group of nonprofit tax and journalism expert convene on the topic. The new report highlights five key problems with the current IRS approach to granting nonprofit status:
1. Applications for tax-exempt status are processed inconsistently and take too long.
2. The IRS approach appears to undervalue journalism by sometimes not viewing it as “educational.”
3. The IRS approach appears to inhibit the long-term sustainability of tax-exempt media organizations.
4. Confusion may be inhibiting nonprofit entrepreneurs trying to address the information needs of communities.
5. The IRS approach does not sufficiently recognize the changing nature of digital media.
Several of these problems stem from the IRS apparently relying on rules developed in the 1960s and 1970s. Under these rules, the IRS may deny tax-exempt status to nonprofits that gather or distribute news in a similar way to commercial outlets. This approach, the group concluded, is no longer a sensible standard. “There must be clear rules distinguishing nonprofit and commercial media but they should be logical rules,” continued Waldman.
Among the most significant recommendations:
- The IRS methodology for analyzing whether a media organization qualifies for exemption should not take into account irrelevant operational similarities to for-profits.
- Rather, the IRS should evaluate whether the media organization is engaged primarily in educational activities that provide a community benefit, as opposed to advancing private interests, and whether it is organized and managed as a nonprofit, tax-exempt organization.
- News and journalism do count as “educational” under the tax-exempt rules.
- The IRS should maintain the key structural requirements for being a tax-exempt media organization that properly distinguish it from commercial enterprise, such as: it cannot have shareholders or investors, it must have a governing board that is independent of private interests, and it cannot endorse candidates or lobby lawmakers.
“With the growing lack of accountability and investigative reporting, particularly in local communities, the Council convened a panel of experts to make recommendations on how the IRS can better facilitate the creation of new nonprofit media,” said Vikki Spruill, the Council’s president and CEO. “We strongly encourage the IRS to implement the recommendations made by the Nonprofit Media Working Group, as they will allow nonprofit media to fill the void in today’s reporting.” Eric Newton, vice president of the Knight Foundation, said clearing up the IRS issues is important for efforts to improve local news. “The recession and the digital age combined to slash local news, leading to many new nonprofit media applications,” he said. “But the IRS fell back on industrial age standards and suddenly started delaying or denying requests strikingly similar to ones it had approved just months earlier. Applying 1970s rules to Web media makes about as much sense as telling spaceships they have to use the freeway.”
The Nonprofit Media Working Group includes: Chair Steven Waldman, journalist and former senior adviser to the FCC chairman; Clark Bell, Robert R. McCormick Foundation; Jim Bettinger, Stanford University; Kevin Davis, Investigative News Network; Cecilia Garcia, Benton Foundation; John Hood, John Locke Foundation; James T. Hamilton, Duke University; Joel Kramer, MinnPost; Juan Martinez, John S. and James L. Knight Foundation; Jeanne Pearlman, Pittsburgh Foundation; Calvin Sims, Ford Foundation; and Vince Stehle, Media Impact Funders. Legal Counsel was provided by Marc Owens, former director of the IRS’s Exempt Organizations Division, and Sharon Nokes of Caplin & Drysdale.
Tuesday, February 12, 2013
Monday, February 11, 2013
We previously blogged that while the charitable contribution deduction dodged a bullet (for the most part) in the fiscal cliff agreement, charities remain concerned that the deduction may be vulnerable in future budget and debt ceiling negotiations. What is worth also highlighting, however, is the extent to which charities benefited from the American Taxpayer Relief Act of 2012. While the Act reinstated the overall limitation on itemized deductions, it also extended several charitable giving incentives that had expired, specifically:
- The charitable IRA rollover provision;
- The enhanced charitable deduction for contributions of food inventory; and
- The basis adjustment to stock of S corporations making charitable contributions of property.
For more details about these provisions and the likely effect of other aspects of the Act on charitable giving see the report by the Tax Policy and Charities project of the Urban Institute.
Monday, January 14, 2013
In one way or another, nonprofit organizations are continually required to justify their own existence. That is, as organizations exempt from taxation. The Catch 22 in responding to the mandate is that nonprofits implicitly justify the unstated question: "Are you even worth it?" Nonprofits either justify the question or appear to "protest too much." Better to just address the question head on if you ask me but not through boilerplate That's the question, after all, implicit in local municipalities' continuing efforts to impose PILOTS on nonprofits. Pittsburgh, Pennsylvania, for example, recently appointed another PILOT task force whose ultimate charge is to determine whether nonprofits are "worth it?" "Well . . . are you!?" asks Pittsfied, Massachussetts' Mayor, according to this report. Meanwhile, local nonprofit organizations continually issue those boring and, even worse, less convincing studies designed to show their significant positive impact on local economies. North Dakota, Idaho, Kentucky, Nebraska, New Hampshire and Oregon are just some of the states adhering to the same old tired playbook. Meanwhile, local governments push ahead with their plans, slowly but continually eroding tax exemption on the local level. Deservedly so, if all nonprofits can do is issue reports that don't get to the real question; "what exactly does the tax exempt nonprofit sector provide that cannot be had from the taxable for profit sector?" I think this is the nagging question that follows nonprofits from 2012 and into 2013. Justify thyself.
[See Payroll tax would elicit some cash from large Pittsburgh nonprofits (Pittsburgh Post-Gazette)]
Tuesday, October 9, 2012
This post from The Chronicle of Philanthropy about restricted gifts led me to download the report linked in the article that was generated as a result of the Forbes 400 Summit on Philanthropy. Entitled "Next-Generation Philanthropy: Changing the World," the article (available free but email address required) contains the results of a survey of 264 of the world's top philanthropists, all of whom had at least $1.0 million in investable assets.
The Chronicle article focuses on the preference for restricted gifts among higher net worth taxpayers. But there are some other interesting nuggets that only a tax geek like me would focus on:
- 7% of individuals with assets between $1 and 5 million and 18% of individuals with assets over $50 million have utilized a pooled income fund. That seems amazingly high to me, and I'm shocked that it actually goes up with higher income donors, rather than down.
- Two-thirds of respondents said that they had a different philanthropic focus than their predecessors. It stresses the need for succession planning in charitable vehicles, an area that I think is sometimes over looked.
- In response to the question "With whom do philanthropists partner?", 40% responded business while 28% said other nonprofits and 22% said government agencies. And you all thought we were making this social enterprise stuff up.
- 44% of respondents want a time horizon of less than ten years to see a retturn on philanthropic investment. I'm thinking this counts as patient capital in the for profit world, but is it in the nonprofit world?
- Finally 56% of respondents say that taxes impact their philanthropic giving.
It's an interesting read for those of us thinking about how the nonprofit world and the system of private philanthropy will develop over the next generation.
Monday, October 8, 2012
This Reuters piece from Sept. 28th highlights a recent report prepared by the Lincoln Institute of Land Policy, which finds that local PILOT programs do raise some revenue, but not a significant amount. The report (free but registration required) contains a significant amount of statistical information on the distribution of PILOT programs by region and by nonprofit sector, with hospitals and universities in the Northeast bearing the heaviest burden. The authors believe that this may be, at least in part, because the Northeast is “substantially more reliant on the property tax as a revenue source for funding local governments than other parts of the country.” (Page 2)
The report is an interesting read, although it notes its own limitations. There is no good collection point for data from PILOT programs, so the collection was, by necessity, somewhat ad hoc. As a result, the authors can only point to this information as a floor. Moreover, although the data shows an increase in PILOT programs and revenues over time, it is difficult to know whether this increase is due to the increase in the number of programs or simply due to better data collection methodologies. Finally, data collection is hampered by the lack of a consistent definition of a “PILOT” program.
In any event, what is striking is the relatively small amount of money raised if you aren’t in a jurisdiction like the Boston metro area, which has many large organizations making substantial payments. It makes one wonder whether the administrative costs and the poisoning of the relationship with large institutional citizens is worth the effort. Given the status of state and local governmental budgets these days, I’m sure they’d say that every penny is needed.
Friday, September 28, 2012
The Congressional Research Service recently issued a report on 501(c)(3) Organizations: What Qualifies as "Educational"? From the report's Summary section:
The question here is how far can the term “educational” be extended? Can a group espousing a viewpoint (i.e., only one side of an issue) be characterized as educational? If so, does the group have to provide factual information to support its statements? Is there some standard for truthfulness and accuracy?
The answers are rooted in a Treasury regulation, which provides that an organization that advocates a position or viewpoint can qualify as educational if it presents “a sufficiently full and fair exposition of the pertinent facts” so that people can form their own opinions or conclusions. To supplement the regulation’s “full and fair exposition” standard, the Internal Revenue Service (IRS) has developed the “methodology test.” Under it, a method is not “educational” if it fails to provide a “factual foundation” for the position or viewpoint or “a development from the relevant facts that would materially aid a listener or reader in a learning process.”
There are constitutional implications in how the term “educational” is defined. In particular, the denial of tax-exempt status on the basis of an organization’s speech could raise issues under the First Amendment. While there is no constitutional requirement that the term “educational” encompass every communication protected by the First Amendment, courts will examine the IRS’s denial of a tax exemption or other benefit when it is based on the content of the taxpayer’s speech in order to ensure the denial was not done for an impermissible reason. Groups that promote controversial positions may be particularly vulnerable to an interpretation of “educational” that permits a subjective determination by the IRS as to whether a group’s methods of presenting its views are educational.
Concern over these issues has led to questions about whether the “educational” standard is unconstitutionally vague. While the IRS’s methodology test was held to be unconstitutionally vague by a federal appellate court, subsequent court decisions have suggested that the test passes constitutional muster
Tuesday, September 11, 2012
The International Herald Tribune (IHT) is reporting that the compilers of a leading league table of the world's top universities on Tuesday reported an “unstoppable rise” in the numbers of students choosing to travel abroad to study.
“Global student mobility is on a seemingly unstoppable rise, with those seeking an overseas education targeting the leading universities,” wrote John O'Leary, an academic adviser to the London-based Quacquarelli Symonds, which produces the annual QS World Universities Rankings. O'Leary continued: “Even after considerable growth in recent years, the latest rankings show an extraordinary rise of almost 10 percent in international student numbers at the top 100 universities.”
According to the IHT,
This year’s listings saw Massachusetts Institute of Technology (MIT) overtaking Britain’s Cambridge University as the top place in the influential league table, which is based on a range of factors that include the opinions of academics and prospective employers.
American and British institutions continued to dominate the QS rankings, which were launched in 2004, occupying all 10 top places.
QS factors foreign student and faculty numbers into the rankings. This practice is reflected in this year’s listing. According to O'Leary, “Cambridge, for example, has seen a significant increase in international students, but has dropped five places in this measure, contributing to its fall from first to second place in the overall ranking.”
Similarly, a drop in the ranking of the University of California at Berkeley — down to 22nd place from 2nd in 2004 — reflected not only a comparatively poor faculty-to-student ratio, but also “low attractiveness for international faculty and students,” said QS adviser, Martin Ince.
The IHT continues:
QS noted that the most successful universities competed to attract the world’s best students and faculty. “Simple evaluations of the proportion of international students and international faculty serve as indicators of an institution’s diversity and international attractiveness,” it said.
Traveling abroad to study has obvious attractions for students who want the very best education available globally. There is also an economic incentive for the institutions themselves, and the countries that host them, in terms of fees and foreign earnings.
However, the IHT notes, mobility depends on the readiness of governments to allow access to foreign students.
Thursday, August 2, 2012
New Hampshire Attorney General, Michael A. Delaney, announced today that the New Hampshire Center for Public Policy Studies (NHCPPS) has issued its report on executive compensation at New Hampshire's nonprofit hospitals. The Attorney General commissioned the NHCPPS to conduct the study in 2011. The review was to determine whether the trustees of New Hampshire's nonprofit hospitals are meeting their fiduciary responsibilities in setting executive compensation, and to examine the types and variations in executive compensation among the hospitals.
According to a press release from the New Hampshire Department of Justice,
The report finds that most hospitals follow the process established by the Internal Revenue Service (IRS) for determining executive salaries. However, these hospitals do not necessarily follow the same process in determining other forms of executive compensation including hiring and retention agreements, bonuses, and perquisites. These additional forms of compensation can, in some circumstances, constitute a significant portion of an executive's pay package. The Report also finds that for most hospitals there is a correlation between hospital size and levels of compensation paid to the chief executive officer (CEO). The data does not however show a significant correlation between CEO compensation and hospital performance measures such as quality of care, cost of care, or charitable care provided. Given these hospitals exist to provide quality health care and are required to provide community benefit and charitable care in light of their non-profit status, the lack of such a correlation is a significant concern.
The Report found that in using IRS guidelines to set compensation, there is a potential "log-rolling" effect created. As long as other hospitals are "moving the log forward" with similar levels of compensation, the industry remains in compliance with the IRS guidelines. Hospitals are supposed to use a range of salaries when setting their CEO compensation. In actual practice hospitals tend to target the 75 percentile, and often higher, in setting their CEO's compensation. This creates an upward spiral and executive compensation can grow at a rate disproportionate to relevant measures of achievement, or to increases experienced by other sectors of the population. This appears to have been the case even during the significant economic downturn experienced since 2008.
All of New Hampshire's 23 nonprofit hospitals were included in the review.
Friday, June 1, 2012
The Institute for Nonprofit Mangement at Portland State University and the Nonprofit Association of Oregon have published a detailed report on the nonprofit sector in Oregon. Here is a description of the report from the Institute's website:
The Oregon Nonprofit Sector Report (ONSR) is a comprehensive report that examines the sector as a whole—including a description of its size and scope, the current condition of nonprofits and clues about their economic and social relevance, and social impact of the nonprofit sector in Oregon.
The report aims to inform decision makers in the public, nonprofit, and private sectors, and will be an important tool for raising public awareness about the overall importance and contributions of Oregon’s nonprofits to the state.
Friday, January 27, 2012
Nonprofits engaging in public policy advocacy has often been a controversial topic, and a recent mix of reports and articles indicate that there are still widely divergent perspectives on the wisdom, benefits, and costs of such advocacy. Here are some notable examples:
- ARNOVA's Finances of Nonprofits and Public Policy: Focused on the financial challenges now facing nonprofits and related emerging public policy issues, this report is from a June 2011 symposium and describes "the challenges now facing nonprofits in the realm of public policy, especially as they pertain to the financing of nonprofits presently and in the future. The report outlines an agenda for research needed to develop a better understanding of these challenges and issues."
- NCRP Report on Foundation Funding of Advocacy: Titled "Leveraging Limited Dollars: How Grantmakers Achieve Tangible Benefits by Funding Policy and Community Engagement," this report asserts that even modest financial support for nonprofit advocacy can lead to large benefits for marginalized groups. Based on a study of 110 organizations, it concludes that for every $1 invested in such advocacy a $115 in benefits flowed to such groups or over $26 billion in total.
- "Pandering for Profit: The Transformation of Health Charities to Lobbyists": For a more critical perspective on at least one aspect of nonprofit advocacy, there is this article by James T. Bennett (George Mason University - Department of Economics). Here is the abstract:
This study explores the metamorphosis of three major voluntary health agencies — American Cancer Society, American Heart Association, and American Lung Association — from charities supported primary by donations into lobbying organizations seeking taxpayers’ funds and grants from commercial enterprises in exchange for supporting private or political initiatives only peripherally related to their charitable missions. Prior to the 1980s, lobbying was all but nonexistent, limited to seeking increased funding for disease research. Fearing loss of tax-exempt status, health charities largely avoided political advocacy. The AIDS movement revealed that vast sums could be acquired from government by intense lobbying, and this advocacy evidently did not threaten tax-exempt status. All three of these charities copied the AIDS movement and targeted tobacco tax revenues at the state level. The American Lung Association, in particular, has acted as a public relations flack for both government agencies and corporations — selling its charitable reputation as a selfless entity concerned only with public health for self-interested purposes. The implications of this transition for both the charities themselves and the public interest are analyzed and discussed.