Nonprofit Law Prof Blog

Massachusetts Contemplating Change in Non-Profit Property Tax

Proposed legislation in Massachusetts would potentially shake-up the current state of their local non-profits. The proposal would make it necessary for current non-profits to begin paying property taxes, and continue to do so for the next four years (churches and houses of worship remain exempt). Currently, non-profit organizations are exempted from paying property tax, but occupy more than 13 percent of taxable property within the state. The proposal is a small part of an overall economic stimulus plan that seeks to provide over $700 million in assistance throughout the state.

Proponents of the legislation argue that aggressive land purchases by larger non-profits make it more difficult for smaller entities to find land. They also believe exempting the non-profits ultimately raises property taxes for others in the community. Opponents believe that taxing non-profits will make it necessary for them to cut back on their services provided, and could lead to employees being laid off. This could have a wide impact, as non-profit jobs are an estimated 17 percent of the state’s workforce (approximately 500,000 jobs), and pay more than $30 billion in wages.

Although both sides present compelling arguments, it is imperative for policy makers to thoroughly analyze the true impacts of their decisions. It will be interesting to see what how the good people of Massachusetts respond to this proposal.

David Brennen

501(c)(3) Organizations & the Ban on "Intervening" with Political Campaigns

A recent post by Benjamin Leff on The Surly Subgroup highlights the 50+ year ban on 501(c)(3) organizations (here, specifically churches) “intervening” in a campaign for public office. Arguments for and against the ban range from an infringement of free speech, to churches using their power to distort the electoral process. However, the main issue discussed is that although churches want to get in to court to challenge the ban, they believe the IRS won’t let them. For a compelling read on how these organizations may be granted their “day in court” and some possible reform suggestions, read the above linked post.

David Brennen

Town and Tech in San Francisco

The Guardian reports that under a proposal in San Francisco: “large tech employers in the city, potentially including Google, Twitter, Uber, Airbnb and Salesforce, would be required to pay a 1.5% payroll tax. The estimated $120m in annual revenue would be used to fund affordable housing and services for the city’s large homeless population." The effort is intended to help address that San Francisco is “one of the most unequal places in the US.”

Public Trust in UK Charities at All Time Low

The Nonprofit Times Reports that trust in charities in the UK has fallen to its lowest level, declining 10% over the past two years. The article cites concerns about aggressive fundraising practices, charities more concerned in sustaining themselves than in their mission, scandal, high compensation levels, and low expenditures all as leading to public revolt. The government is contemplating setting up a new fundraising regulatory body. The article notes that the crisis in confidence comes at a terrible time, because after the Brexit vote it is likely that British charities will have fewer resources (loss of EU funding) and face greater need. RC