Friday, May 27, 2011
Ellen Aprill (Loyola-Los Angeles) has posted a comment on the Loyola-L.A. faculty blog regarding the emerging dispute over whether the federal gift tax applies to large, individual donations to tax-exempt, section 501(c)(4) nonprofit organizations. Readers interested in more in-depth discussion of this topic would be well advised to take a look at her recent article on the same subject.
Sunday, January 9, 2011
Ellen Aprill (Loyola - L.A.), Roger Colinvaux (Catholic), and I have posted papers examining different ways that the Supreme Court's Citizens United v. FEC decision affects - or does not affect - speech by nonprofit organizations. We initially presented these papers at the National Center on Philanthropy and the Law's Annual Conference last fall, which focused on nonprofit speech in the 21st century. Richard Briffault (Columbia) also presented a paper on this topic at that conference, but that paper is not yet publically available. Here are the abstracts and links for our three papers in the order they were presented:
Roger Colinvaux, Citizens United and the Political Speech of Charities
The Supreme Court’s decision in Citizens United v. Federal Election Commission makes a Supreme Court challenge to the tax law rule that prohibits charities from involvement in political activities likely, and a reexamination of the political speech of charities necessary. Part I of the Article surveys the history of the political activities prohibition in order to emphasize that it was not a reactionary policy but quite considered, and that there are strong State interests supporting it. Part II of the Article analyzes Citizens United in detail and argues that if the Supreme Court considers a challenge to the political activities prohibition, Citizens United is distinguishable: the purpose of the political activities prohibition is not to suppress speech but to define charity; the legal setting is tax and not campaign finance; unlike the campaign finance rule, violation of the political activities prohibition is not criminal; and the political activities prohibition is by nature a rule associated with a tax status rather than a ban on corporate speech. Accordingly, the political activities prohibition, unlike the campaign finance rule, is not a burden on speech and therefore is constitutional. Part III of the Article discusses cautionary notes to the analysis of Part II, and explains that even if there is a constitutional defect to the political activities prohibition, the political activities limitation on the charitable deduction nonetheless would survive. Regardless of the constitutionality of the political activities prohibition, Part IV examines a number of possibilities for a charitable tax status in which political activity is allowed, and concludes that the current rule is the best option. Part V concludes that the prohibition represents the evolution of a century of wrestling with the subject of political activity and charity, and the wisdom that the two are not compatible. Such wisdom should not be contravened.
One of the many aftershocks of the Supreme Court’s landmark decision in Citizens United v. FEC is that the decision may raise constitutional questions for the long-standing limits on speech by charities. There has been much scholarly attention both before and after that decision on the limit for election-related speech by charities, but much less attention has been paid to the relating lobbying speech limit. This article seeks to close that gap by exploring that latter limit and its continued viability in the wake of Citizens United. I conclude that while Citizens United by itself does not undermine the limit on lobbying by charities, the decision does reinforce the constitutional requirement that the government allow charities to easily form a non-tax favored alternative for engaging in unlimited lobbying. Some post-Citizens United proposals for regulating speech-related activity may in fact run afoul of this requirement. More importantly, the intersection of Citizens United and this tax-based limit on charity speech may be a catalyst for renewed consideration of whether the unconstitutional conditions doctrine could be successfully refined in the subsidy context through an approach that considers the purpose of the subsidy and how important the speech-related limit is to the accomplishment of that purpose.
The role of noncharitable exempt organizations was perhaps the key feature of this year’s election. Senator Baucus as Chairman of the Senate Finance Committee, for example, sent a letter calling upon the IRS to survey major noncharitable 501(c) organizations to ensure that they are obeying the rules regarding political activity, including limits on politicking. In Citizens United, however, the Supreme Court decreed that “[n]o sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.” Nowhere does Citizens United acknowledge the tax limits on political speech or address their constitutionality. Supreme Court cases predating Citizens United have justified these tax limits on the grounds that government has no duty to subsidize political speech. To the extent that “no duty to subsidize” is and remains the justification, nothing in Citizens United explicitly threatens the current tax regime. Nonetheless, we must ask whether the reasoning of Citizens United has undermined Regan v. Taxation with Representation of Washington (“TWR”), the key ”no duty to subsidize” case. In addition, the rules regarding politicking by tax exempt entities have changed significantly since TWR. As a result, the standards as announced in the case and interpreted by its progeny may call for a different conclusion today.
Furthermore, this piece will explore both the tax rules that are, and some that might be, applicable to the political speech of noncharitable tax exempt organizations. Part I will review TWR, its ancestors and its progeny as well as Citizens United. Part II will describe the current tax rules regarding lobbying and politicking applicable to exempt organizations that can engage in unlimited lobbying and politicking as part, but not the primary purpose, of their activities: section 501(c)(4) social welfare organization, section 501(c)(5) labor organizations, and section 501(c)(6) trade associations. The discussion will include consideration of treatment of contributions to such organizations for gift tax purposes and the special tax that may be applicable to membership dues because of lobbying and politicking by such organizations. Part II will also review the history of section 527, the section governing political organizations, with particular attention to the 2000 amendments that added registration and disclosure requirements. Part III examines the possible impact of Citizens United on the tax law’s current approach to political speech. It highlights the difference between the definitions of lobbying provided in the Internal Revenue Code and Treasury regulations and the uncertain “facts and circumstances” approach employed by the Internal Revenue Service (“IRS” or “Service”) in identifying politicking. It offers a reconciliation of seemingly contradictory language in Taxpayers With Representation and Citizens United regarding use of affiliates to conclude that Citizens United has not sub silentio overturned TWR’s “no duty to subsidize” holding. It defends, albeit unenthusiastically, the 2000 amendments to section 527. Part IV proposes a number of possible additional disclosure requirements for noncharitable exempt organizations engaged in lobbying and politicking. They include requiring applications for exemption, establishing a new category of exempt organizations for organizations primarily engaged in lobbying and expanding disclosure of contributors for all or for some noncharitable exempt organizations. It also explores the possibility of taxing the politicking expenditures of noncharitable tax exempt organizations not conducted through a separate segregated fund, whether or not the organization has investment income. The piece concludes by reminding us that the tax law regulation cannot substitute for campaign finance regulation.
Discussion of Hammack & Anheier's American Foundations: Roles and Contributions Hosted by Hudston Institute
On Tuesday, January 25th in Washington, DC, the Hudson Institute will be hosting a book discussion of American Foundations: Roles and Contributions, edited by David Hammack (Case Western Reserve) and Helmut Anheier (UCLA). According to the announcement, the panelists will include co-editor David Hammack, as well as Leslie Lenkowsky of Indiana University, Steven Rathgeb Smith of Georgetown University, and Susan Ostrander of Tufts University. Bradley Center Director William Schambra will moderate the discussion.
Tuesday, November 9, 2010
Stephen Schwarz (UC Hastings) presented Navigating the Charity/Business Border: Structures, Strategies and Solutions at the University of San Diego School of Law's Tax Law Speaker Series yesterday. The paper builds on the draft he presented in 2008 at the National Center on Philanthropy and the Law's annual conference that year, The Architecture of Charities: Commercial Activities, Structural Reactions: Basic Structures. For more information, see this TaxProf Blog entry.
Sunday, June 13, 2010
For the last two days I helped Notre Dame Law School host the fifth annual Junior Tax Scholars Workshop. Among the papers presented by the attending, pre-tenure law school faculty were the following on exempt organizations topics. Since these papers are works in progress, public copies are not yet available, but we can expect to see most if not all of them eventually in law reviews.
Perry Fleischer (
Leff (American), The Case Against
For-Profit Charity: An Agency Cost Analysis
Mayer (Notre Dame), Charities and
Lobbying: Institutional Rights in the Wake of Citizens United
Samuel Brunson (Loyola-Chicago), Rethinking Public Charities and Political Speech
Wednesday, May 26, 2010
A list of "Law, Society, and Taxation" papers relating to taxation that will be presented at the Law and Society Conference in Chicago this weekend includes the following relating to nonprofit organizations:
David Louk (Yale/Berkeley) "Unrelated Operations of Universities and Religious Organizations and Their Favorable Tax Treatment"
Shannon McCormack (UC Davis) "Deconstructing the Charitable Deduction: Devising a Workable Framework to Analyze Charitable Transfers"
Brian Galle (Florida State/GW (and soon Boston College)) "Keep Charity Charitable"
Todd Henderson (Chicago) "Corporate Philanthropy and the Market for Altruism"
Benjamin Leff (American) "Tax Benefits for For-Profit Do-Gooders"
Shruti Rana (Maryland) "Micro-Innovation"
Roger Colinvaux (Catholic) "The Pension Protection Act of 2006: The Beginning or the End of Reform of the Tax Status of Charitable Organizations"
James Fishman (Pace) "Stealth Preemption: The IRS’s Corporate Governance Initiative"
Terri Helge (Texas Western) "The Limitless Private Benefit Doctrine"
Richard Schmalbeck (Duke) "Differential Subsidies among Charities and Their Relation to Worthiness"
Friday, April 16, 2010
Georgia State Hosts Forum on "Social Enterprise and Social Change: Should Nonprofits Embrace Business"
The Nonprofit Studies Program at Georgia State University is hosting a forum on social enterprise on April 22, 2010. The forum will feature Michael Edwards, author of Small Change: Why Business Won't Save the World, and a panel including corporate citizenship and philanthropy officers from IBM, the ING Foundation, and Newell Rubbermaid Corporation.
Wednesday, April 14, 2010
The Chronicle of Philanthropy reports that Catholic University in Washington, DC is hosting a symposium today, April 14, entitled "Philanthropy in the 21st Century: Should All Charities Be Equal?" The primary focus of the symposium is consideration of whether tax law should distinguish between different types of charities. This issue raises questions of line drawing and what to emphasize in distinguishing charities from other companies and from each other. Many charities engage in activities that closely resemble for-profit companies but enjoy more favorable tax treatment.
One of the most recent and high profile examples of the issues in this area is the Provena case recently decided by the Illinois Supreme Court. That case upheld denial of a charitable hospital's property tax exemption because the hospital had failed to provide sufficient charitable services. Another question regarding the charitable exemption is whether charities directly aiding the poor deserve greater tax benefits.
include Diana Aviv, head of Independent Sector; Richard L. Schmalbeck, a
professor of law at Duke University; Eugene Steuerle, a fellow at the
Urban Institute, a Washington think tank; and Russ Sullivan, chief of staff of
the Senate Finance Committee and an aide to its chairman, Sen. Max Baucus, Democrat
of Montana. The moderator is Professor
Roger Colinvaux, professor of?,
Friday, April 9, 2010
Richard Schmalbeck (Duke) presented his draft paper 501(say)(what?): Considering New Exempt Category for Churches yesterday as part of UCLA's Colloquium on Tax Policy & Public Finance. I was fortunate enough to see an earlier draft of this paper, and it raises important (and undoubtedly controversial) issues relating to the current tax status of churches. While Richard and I disagree on some key points relating to that tax status, this looks to be an important and interesting paper.
(Hat tip: TaxProf Blog)
Thursday, August 13, 2009
A Symposium on the Law of Philanthropy in the 21st Century will be held at Chicago-Kent College of Law, in Chicago, Illinois, on October 23, 2009. This full-day symposium features academic papers presented on panels organized around governance, tax and donor intent. Marian Fremont-Smith will be the keynote speaker and will speak following lunch. The symposium concludes with a reception at the end of the day. Chicago-Kent is hosting the symposium and its law review will publish the papers in a symposium issue. The ACTEC Foundation has provided funding for the symposium which makes it possible for the symposium to offered free of charge - registration, materials, lunch and the reception are all free!
Wednesday, June 17, 2009
The International Society for Third Sector Research (ISTR) has issued a call for contributions. Here is the text of the CFC.
Call for Contributions
ISTR 9th International Conference
"Facing Crises:Challenges and Opportunities Confronting the Third Sector and Civil Society"
The International Society for Third-Sector Research (ISTR) is pleased to announce that the Call for Contributions for the 9th International Conference is published on our website (www.istr.org/conferences/istanbul/). The conference will be held at Kadir Has University in Istanbul, Turkey, on July 7-10, 2010.
The Call is currently available in English and Spanish; Arabic, Chinese, German and French languages will be added in the very near future.
The deadline for submissions is October 19, 2009.
For more information, see the ISTRwebsite at: www.istr.org/conferences/istanbul/
Wednesday, June 10, 2009
The Alliance Defense Fund, which brought you Pulpit Freedom Sunday 2008, and the Federalist Society recently teamed up to host a panel discussion at the National Press Club on the constitutionality and wisdom of the Internal Revenue Code section 501(c)(3) prohibition as applied to pastors speaking from their pulpits. The speakers included Professors Doug Laycock (Michigan) and Donald Tobin (The Ohio State University), as well as Rev. Barry Lynn from Americans United for Separation of Church and State and Benjamin Bull of ADF. I finally had a chance to listen to the debate, and regardless of your views on this issue it is very informative about the various positions.
One interesting additional note. The Alliance Defense Fund is apparently already gearing up for Pulpit Freedom Sunday 2009, for which it will recruit churches both to comment on current government officials and to comment on candidates for office.
Friday, May 8, 2009
CHANGES, CHALLENGES, AND NEW OPPORTUNITIES FOR THE THIRD SECTOR
6TH ISTR Asia/Pacific Regional Confence
2-4 November 2009
THE DEADLINE FOR SUBMITTING ABSTRACTS
HAS BEEN EXTENDED TO
MAY 15, 2009
OFFICIAL CONFERENCE WEBSITE:
Call for Papers:
Hosted by: Center for the Third Sector, National Chen
University (NCCU), Taiwan
Address: No. 64, Sec. 2, ZhiNan Road, WenShan District,
Taipei City, TAIWAN
Call for Papers
CHANGES, CHALLENGES, AND NEW OPPORTUNITIES
FOR THE THIRD SECTOR
THE 6th ISTR ASIA AND PACIFIC REGIONAL CONFERENCE ON THE THIRD SECTOR, NOVEMBER 2-4,
The world is under great transformation. Globalization has become a trend that
is very difficult to resist. The result of it could be some countries or a few special
locations receive great benefits, and living standards in those areas are greatly lifted.
On the other hand, globalization has also brought many seriously social problems for
the world, especially in those underdeveloped and developing countries. For
example, the problems include poverty, inequalities, social exclusiveness, community
dissolution, unsustainable environment, ethnic conflict, cultural tensions, among
others. Accompanying with recent economic crisis around the world, it shows that
globalization does not keep its promise to bring a better life for the entire world.
Arguments for free market in the era of globalization do also escort with a new
neoliberal governance structure, and it probably can be named as privatization. The
market mechanism and value of efficiency have become the major driving forces for
the society. In order to increase capital accumulation and economic efficiency of the
entire country many governments transform their roles and have partially abandoned
their former obligations. Many powerless people located in some special places are
left behind. On the same time, the political process is restrained to a limited elites;
large numbers of people are turned off from participation. Problem of political
legitimacy therefore has become a serious one in many countries.
This new world stage contains an imbalance and contradictory structure, and it
has generated special concerns among diverse civil society actors on the kinds of
social change that are occurring. Although civil society researchers and actors have
shown significant advance in attaining more just and inclusive societies, there remain
enormous challenges that demand multi-disciplinary approaches and new strategic
alliances among the Third Sector and with the market and state sectors. The
transforming world not only brings serious changes and challenges, but it probably
also carries new opportunities for us. It invites scholars and practitioners to imagine
a progressive and alternative future and to exchange their experiences and findings.
The main theme of the 6th ISTR Asia and Pacific Regional Conference on the
third sector therefore addresses the issue of changes, challenges, and opportunities for
the third sector, specifically in the globalization era. Under this theme, we can tackle
the following topics.
Environmental Crises and the Third Sector
Economic Recession and the Third Sector
Globalization, Privatization, Neo-liberal Policies, and the Third Sector
Poverty and the Third Sector
Gender and the Third Sector
Terrorism and the Third Sector
Immigration, Foreign Workers and the Third Sector
Indigenous People and the Third Sector
Transparency and Accountability of the Third Sector
Fund-Raising of the Third Sector
Professionalism of the Third Sector
Innovation and the Third Sector
Management and Governance of the Third Sector
Philanthropy and the Third Sector
Social Entrepreneurship and the Third Sector
Corporate Social Responsibility and the Third Sector
Advocacy and the Third Sector
Empowerment and the Third Sector
Social Capital and the Third Sector
Civil Society, Community and the Third Sector
The above list is just for illustration; it is not meant as a limitation to creativity. We
strongly encourage participants to mobilize your imagination beyond them. It is our
hope that this conference will inspire stimulating debate and discussion, and create
Monday, February 23, 2009
I will be speaking today at the Hamline Health Law institute in St. Paul, Minnesota, on the topic: Diverging Perspectives of "Charitable": Federal Income Tax Versus State Property Tax Exemptions for Hospitals and Homes for the Elderly. Here is the description:
Many states are challenging property tax exemptions for charitable hospitals and elderly housing under the guise of preventing superfluous flows of tax benefits to the rich or middle class. State tax officials resort to "quid pro quo" or similar notions to justify claims that the financially well-off are not entitled to this government largess. Federal law recognizes, though, that "charitable" includes benefits to the poor, in addition to hospital care to all and elderly housing. Using these examples (hospitals and elderly housing), this presentation will explore the impact on state exemption law of two perspectives of "charitable" - the narrow alms giving view of many states versus the broader societal view of federal law.
One of the points I intend to bring out is that the diverging views of what is "charitable" from the federal law perspective and from the state law perspective is at odds with the goal of charity to create contextual diversity. For example, in the Provena case in Illinois, the court states explicitly: "In this respect, the Illinois standard for exemption from property taxes is different from the more diffuse "community benefit" standard for exemption from the federal income tax." Astonishingly, the court interprets the law in Illinois in a way that completely ignores the benefits to society of the many non-charity care activities of a hospital - medical education, crisis nursery services, behavioral health benefits, and Medicaid and Medicare subsidies, for example. True, many of these non-charity care community benefits are not directly linked to notions of "free care" or "gifts" to the poor, but they are valuable in their own right. The real likelihood is that the many states that have this narrow view of charity will, inevitably, adversely affect the ability of nonprofits in general to use creativity, innovation and a myriad of other ideas as a way to advance the marketplace and make society all the better.
Wednesday, January 21, 2009
Georgia State University Nonprofit Program Brown Bag series: "Orientations and Due Diligence Evaluation"
The Nonprofit Program of the Andrew Young School of Policy Studies at Georgia State University presents its Brown Bag Seminar Series in Nonprofit Research.
WHEN: Tuesday, January 27, 2009
WHERE: Room #750 AYSPS BUILDING from 12:00 PM - 1:30 PM
WHO: Calvin Edwards, CEO of the Calvin Edwards Company
"Orientations to Due Diligence and Evaluation"
The purpose of these seminars is to discuss research-in-progress by faculty associated with the nonprofit program.
We invite students, faculty and interested members of the community to join us!
For questions, please email
Thursday, January 8, 2009
I am blogging from the American Association of Law Schools Annual Meeting in San Diego. Panels with topics of particular nonprofit interest include:
A panel on (shameless self-promotion, as I am moderating this panel) Pulpit Freedom?: On Taxes, Elections, and Religious Freedom is scheduled for this morning at 8:30 a.m. The starting point for this panel is the challenge by the Alliance Defense Fund to the federal tax law prohibition on churches and other houses of worship supporting or opposing candidates, even during in-service sermons. The panelists are Vaughn James (Texas Tech), Douglas Laycock (Michigan), Donald Tobin (Ohio State), and Robert Tuttle (George Washington) (two other panelists who were scheduled to attend could not make it to the conference at the last minute).
The Section on Nonprofit and Philanthropy Law is presenting New Research in Nonprofit Law on Saturday at 9 a.m. The panelists are Johnny Buckles (Houston), Richard Schmalbeck (Duke), Stephen Schwarz (Hastings), and Norman Silber (Hofstra), and James Fishman (Pace is moderating).
Finally, another panel that caught my eye is Community and Subsidiary in Domestic Relations on Friday at 1:30 p.m. It will explore among other topics, the extent to which government should seek to support, rather than supplant, institutions of civil society. Its panelists are Paolo Carozza (Notre Dame), Robert Cochran (Pepperdine), Amitai Etzioni (George Washington), Ronald Garet (USC), Ira Lupu (George Washington), and Robert Tuttle (George Washington), and the moderator is Linda McClain (Boston University).
Monday, December 8, 2008
Philanthropy Law in the 21st Century - October 23, 2009
The American College of Trust and Estate Counsel's Legal Education Committee is organizing the third in a series of academic symposia financially supported by the ACTEC Foundation. The next symposium, Philanthropy Law in the 21st Century, will be held at Chicago Kent Law School on October 23, 2009.
The symposium will be organized around three panels, and the preliminary plan is to have one panel on donor issues, one on management issues, and one on tax issues. Because the three topics overlap somewhat, the Legal Education Committee will organize papers into panels after it reviews the proposals.
If you would like to be considered for one of the panels, please submit an abstract of your paper to Anne-Marie Rhodes by email (her address is email@example.com) by February 2, 2009. The Committee will notify individuals chosen to participate in the symposium by email by March 1, 2009. If you are chosen to present a paper, you will be asked to submit a draft by September 1, 2009. Drafts will be circulated to the panelists prior to the date of the symposium and abstracts will be provided to all symposium attendees. You will also be asked to agree to publish your final paper in a special symposium edition of the Chicago-Kent Law Review.
All symposium speakers will be reimbursed for their travel expenses (airfare and the cost of ground transportation and hotel) courtesy of an ACTEC Foundation grant. Speakers will also be invited to a Speakers' Dinner on Thursday night, and breakfast and lunch will be provided to both speakers and attendees on Friday.
Wednesday, October 29, 2008
Georgia State University's Andrew Young School of Policy Studies Holds a Brown Bag Series in Nonprofit Research
The Nonprofit Program of the Andrew Young School of Policy Studies at Georgia State University presents its Brown Bag Seminar Series in Nonprofit Research.
WHEN: Wednesday, November 5, 2008
WHERE: Room #749 AYSPS BUILDING from 11:30 PM - 1:00 PM
WHO: Kristina Jaskyte, from the University of Georgia presents:
"Creativity and Innovation In Nonprofit Organizations"
WHY: The purpose of these seminars is to discuss research-in-progress by faculty associated with the nonprofit program.
INVITED: We invite students, faculty and interested members of the community to join us!
Sunday, October 12, 2008
The St. John's Journal of Legal Commentary has accepted for publication an article by Prof. Bernadette A. Meyler of Cornell Law School. The article, The Limits of Group Rights: Religious Institutions and Religious Minorities in International Law, has already been posted on SSRN. Following is the abstract:
Scholars and advocates of religious liberty within the United States are beginning to suggest that our constitutional discourse has focused too intently on individual rights and that our attention should now turn to the interests of religious institutions and the notion of church autonomy. The reoriented jurisprudence encouraged by such proposals is not without parallel in other national contexts, including those of Europe. Heeding calls to attend to church autonomy could thus bring the United States into closer harmony with its European counterparts. Placing priority on church autonomy might, however, generate unforeseen obstacles to the exercise of religious liberty. In particular, emphasizing religious institutions may lead to the unequal treatment of individuals and entities of minority religious persuasions. As this Symposium Article's analysis of pertinent cases from the jurisprudence of international tribunals demonstrates, the monolithic conception of religious associations that has emerged from an institutionally oriented approach to religious liberty has resulted in the neglect of the equality of free exercise on the individual level and, concomitantly, disregard for the freedom of religious dissent and sub-group formation. The piece concludes with a suggestion about how to avoid the pitfalls of both the individually and institutionally based approaches.
Friday, September 26, 2008
Today, at the University of Iowa College of Law's Faculty Speaker's Forum, yours truly will discuss whether the private benefit doctrine precludes tax exemption for nonprofit contract model HMOs that arrange for health care services for their members. Earlier this year, the 9th Circuit Court of Appeals ruled that the membership structure utilized by most, if not all HMO's prevents nonprofit HMOs from attaining or retaining tax exempt status. The gist of my argument (set forth in my petition in support of VSP's cert petition (Download jones_amicus_brief_5.DOC) (Download vsp_cert.Petition.pdf ) is this:
This case involves a matter of extreme importance to the entire nonprofit health maintenance organization (HMO) industry. The court below held, based upon an unexplained and misunderstood application of the private benefit doctrine, that an HMO operating under a membership structure primarily served the private benefit of its subscribers and, therefore, is not entitled to tax exemption under section 501(c)(4) of the Code. It is true that the private benefit doctrine is implicated when a nonprofit organization confers private benefit on non-charitable recipients, such as the members of the HMO. The private benefit doctrine, however, does not preclude an organization from economic dealings with a non-charitable class of persons when doing so is necessary to accomplish its charitable or social-welfare purpose. For example, nonprofit hospitals routinely provide “profits” in the form of compensation to physicians and other service providers that they employ to achieve their charitable healthcare goals. Likewise, nonprofit HMOs cannot possibly achieve their charitable purpose without a membership form of organization.