Charity Governance

THE CITY OF BOSTON ISSUES REPORT ON NONPROFIT PROPERTY TAX EXEMPTIONS

DATELINE: May 1, 2009, Chicago

Everyone knows that in these tough economic times state and local governments are struggling to balance their budgets.  Many governors, legislators, and mayors look hungrily at the property occupied by nonprofit hospitals, educational institutions, cultural institutions, and large social service agencies.  Although these institutions and their stakeholders generate employment, sales taxes, and important services, our elective representatives see lost property tax revenue when they gaze upon green college campuses and the concrete fortresses housing large urban hospital systems.

The City of Boston just...

WALL STREET JOURNAL FUELS THE FIRE: FRONTPAGE ARTICLE ON CHARITY CARE

DATELINE: April 4, 2008, Chicago

As this is written, the American Hospital Association is in the back of an ambulance, rushing to the nearest hospital emergency room with severe chest pains. This assumes the AHA found today's Wall Street Journal outside its door. Splashed across the paper's front page is a major expose by John Carreyrou and Barbara Martinez entitled, "Nonprofit Hospitals, Once For the Poor, Strike it Rich." While the AHA is being transported by ambulance, Senator...

THE BLOOD SUCKING VAMPIRES ARE CIRCLING: A VICTORY FOR CHARITY THAT SHOULD MAKE ALL CHARITIES NERVOUS

DATELINE: March 18, 2008, Chicago

You will be hard pressed to find a definition for charity in the Internal Revenue Code. Most efforts to define charity are vague or circular. In the past, vagueness has worked to the advantage of those seeking classification and subsidy as charities. But vagueness can cut both ways. The recent experience of the MacDowell Colony is a perfect example. This was a case involving state property tax exemption.

As taxes become harder to raise and demands for governmental services go...

DID HARVARD RECEIVE AN ADVANCE COPY OF THE MINNESOTA SUPREME COURT’S PROPERTY TAX OPINION?

DATELINE: December 11, 2007, Chicago

We noticed that Harvard University announced on Monday a plan to make more financial aid available to middle-class and upper-middle class students. Jane J. Kim, Harvard Trims Tuition Bills for Families, Wall Street Journal, Dec. 11, 2007.  For these students, tuition will equal 10% of the family's household income. As a consequence, a family making $120,000 a year would pay $12,000 per year in tuition, compared to $19,000 in tuition under the existing policy. Harvard also plans to do away with the loan portion of its financial package, substituting a grant instead.  As per the existing policy, those with under $60,000 of family income pay no tution, with those with slightly higher family incomes required to pay a relatively small percentage of the sticker price.

None of this should come as a surprise, with the federal government and Harvard critics eyeing Harvard's...

NONPROFITS SHOULD BE WATCHING THEIR WALLETS: PROPERTY TAX EXEMPTIONS AND PILOTS

DATELINE, October 21, 2007, Chicago

Living in the City of Chicago gives one a fairly good perspective on what pressures state and local officials believe they are facing these days. Mayor Daley is looking for new sources of revenue to finance city government. His answer is taxes on bottled water and a city-owned casino (one can only begin to imagine the corruption and patronage that would come with that). Meanwhile Cook County Board President Todd Stroger is proposing sales tax increases, doubling parking fees, and doubling the county's take from gas taxes to finance a crumbling and corrupt county government. Moving up the food chain, the state legislature and Illinois Governor Rod Blagojevich have been locked in a...

NO STANDARDS IN PITTSBURGH: PROPERTY TAX AND PILOTS

Dateline: February 27, 2007, Chicago

Today, Rich Lord of the Pittsburgh-Gazette a continued his series on the City of Pittsburgh's efforts to obtain voluntary payments for city services from nonprofits. In the trade, these payments are known as PILOTS, or Payments in Lieu of Taxes. Nonprofits provide benefits to major cities, but they also can pose a drain on the tax base by taking property off the tax rolls. According to Lord, one-third of Pittsburgh's property value is exempt, divided evenly between property owned by the government and property owned by nonprofits. See, Rich Lord, Pittsburgh's Pleading for Nonprofit Money Called 'Unique': Most Cities have Formulas for Payments in Lieu of Taxes Payments, Feb. 26, 2007.

Some cities enter into voluntary, but enforceable contracts with exempt entities such as...

OHIO GIRL SCOUTS MAY QUALIFY FOR LEGAL MERIT BADGE FOLLOWING THEIR FIGHT WITH THE OHIO TAX COMMISSIONER OVER A PROPERTY TAX EXEMPTION

Dateline: January 4, 2007, Chicago

The ongoing battle between nonprofits and the state taxing authorities over property tax exemptions has the Great Trail Girl Scout Council doing battle with J. Patrick McAndrew, the Tax Commissioner of Ohio.  McAndrew won the first fight, but the Ohio Board of Tax Appeals ruled in favor of the Girl Scouts in round 2.  Yes, those little girls...

CASE 58—CATEGORY II: NEW DORM TO BE BUILT BY BUSINESSES ASSOCIATED WITH CAMPAIGN CONTRIBUTORS TO WISCONSIN GOVERNOR JIM DOYLE: A NEW SECTION 501(c)(3) ORGANIZATION APPARENTLY MAKES THIS POSSIBLE

Bruce Murphy, the editor of Milwaukee Magazine, always has some good tidbits in his weekly Murphy’s Law column.  This week, Murphy really delivered the goods.  See, Bruce Murphy, A Smelly Project Benefits UWM and Jim Doyle, Milwaukee Magazine Web site, Oct. 24, 2006.  Murphy reports that the University of Wisconsin Milwaukee (UWM) formed a separate entity to construct off-campus housing for freshman students.  By using this separate entity, UWM, a state school, is apparently able to avoid...

THE PROBLEM IS ROOTED IN THE ILLINOIS STATE CONSTITUTION, STATE FINANCES, AND DISSASTISFACTION WITH HEALTH CARE FINANCING, BUT PROVENA NEVERTHELESS HAS IMPLICATIONS FOR ALL NONPROFITS AROUND THE COUNTRY

Talking about property tax exemptions for nonprofits is problematic once the discussion goes beyond state borders.  Property taxation is idiosyncratic, with each state having its own quirky set of rules.  Despite that problem, the final decision handed down by the Illinois Department of Revenue in Department of Revenue of the State of Illinois v. Provena Covenant Medical Center last week has important implications for nonprofits throughout the country.  The Department of Revenue ruled that Provena was...

NEW STUDY OF CHARITY CARE IN CHICAGO IS SERIOUSLY FLAWED

CONTINUING SERIES Here are our prior posts on AG Madigan's charitable hospital proposal: Solace for Illinois Attorney General Lisa Madigan: NY Times Recognizes Her Legislative Initiatives, But the Devil is in the Details; Show Me the Study: Mom Madigan Knows a Secret that is Best Kept from the Children; Illinois Attorney General Madigan Continues Her Crusade Against Illinois Charitable Hospitals: Show Me the Study; and Illinois Attorney General Oversteps Bounds: Sending Illinois Health Care Attorneys into Ecstacy and Scaring Tax-Exempt Hospitals.

There is nothing like a large metropolitan newspaper to make the Tuesday following a three-day weekend a miserable one for the target of its headline.  The Chicago Sun Times headline yesterday “Hospitals Get More Than They Give Back” must have galled the Illinois Hospital Association as it fights Attorney General Lisa Madigan’s efforts to rewrite Illinois law to increase the level charity care required of nonprofit hospitals.    It even topped Jennifer Aniston’s...