The ongoing question of what’s really a charity

Query whether a failure to file annual 990 reports should be grounds for determining that a nonprofit organization is not actually a charity, and therefore not eligible for property tax exemption.  Pittsburgh thinks so, apparently; but if being stupidly managed disentitled organizations to charity status, how many small nonprofits would remain standing?

This is the latest in a series of battles between Pittsburgh nonprofits and their host city.  The Nonprofiteer thinks the city should follow Willie Sutton’s advice and go where the money is, and stop trying to squeeze blood from these teeny-weeny turnips.

On the other hand, maybe these battles aren’t really about revenue at all.


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3 Responses to “The ongoing question of what’s really a charity”

  1. Laura J Says:

    I know many, many small nonprofits that manage to file their 990s and are otherwise smartly managed. While the ongoing battle between Pittsburgh and its nonprofit community–and the issues it raises–is one worth following, I don’t have much sympathy for any nonprofit that loses its exemption because it can’t manage to file a 990 for three years running.

  2. Nonprofiteer Says:

    You’re absolutely right, of course–filing a 990 is pretty much the least one can do to fulfill a nonprofit’s legal responsibilities. But I doubt that it genuinely bears on the question of whether the agency is a “charity” and therefore entitled to property tax exemption–seems more like a “gotcha” rule.

  3. Property taxes on nonprofits: the never-ending story | The Nonprofiteer Says:

    […] Once again, Pittsburgh seems to be leading the way in challenging the property tax exemptions of nonprofits, particularly nonprofit hospitals.  While the hospitals and other nonprofits complain that this means municipal officials are so desperate for revenue they'll ignore the good things charities accomplish, in fact the city officials have put their fingers on a poorly-kept secret: often those "charities" are for-profit businesses in sheep's clothing.  As the Nonprofiteer pointed out at the time of the Illinois Supreme Court decision requiring Provena Hospital to pay property taxes, there's no inherent reason why an exemption for charities need apply to all nonprofits.  If agencies provide charitable services, fine; if they don't, their entitlement to tax exemption is not self-evident. […]

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