Potbellied Pig Rescue and Hate Teams: Charities That Assist the “Frequent Good”? | financial system

The charity agreement in the US goes something like this: Nonprofits are formed and licensed because they perform a service that is believed to be good for society and often relieve the government from performing the same functions. In return for their contribution to the “common good”, they are considered tax-exempt organizations, which means that they usually do not pay any income tax, sales tax or property tax to local, state and federal governments. In addition, donations to support these organizations are sometimes tax deductible, resulting in the loss of additional tax revenue.

At the federal level, the effect is enormous, affecting the funding of programs ranging from military defense to environmental protection. Local and state tax exemptions mean that nonprofits don’t help pay for essential public services like police and fire safety, public education, roads, and more. For example, in 2015, New York state evaded $ 26 billion in religious organization property due to tax exemption.

What exactly is the definition of public good?

There are nearly 1.6 million tax-exempt, nonprofit, and nonprofit organizations in the United States. Most of us who get involved in philanthropy assume that the vast majority of them are for the common good. However, there is no accepted definition of the term “public good”. Without a clear, shared understanding of what it means, it is often difficult to understand how the charity contract works. Here are a few examples where lack of definition raises serious questions:

There are nonprofit organizations across the country for the rescue of fat belly pigs. I have nothing against pot-bellied pigs and understand that they may need to be rescued like any other animal. The question is: does rescuing big belly pigs create the kind of public good that guarantees significant tax benefits and loss of government revenue? If the pigs rescue pen catches fire, the nonprofit will call the fire department – despite being exempt from paying property taxes to support this critical public service.

What about the charitable status of dozens of hate groups across America? As disgusting as their speech is, hate speech is protected by the First Amendment and is allowed to exist by law. Do these organizations, even if they are legal, fit into a definition of the common good? How does it affect the moral fabric of our society to subsidize non-profit hate groups with tax exemptions?

When these hate groups advocate violence or rioting, as some have recently done, their otherwise protected language crosses the line of what is permissible. Do such organizations grant the enormous tax advantages of non-profit status with the corresponding loss of government revenue? Is this how the charity contract is supposed to work?

Another example is the charitable status of televangelists. Religious organizations as a group are tax-exempt non-profit organizations. Many televangelists have built enormous businesses and amassed millions of dollars in untaxed income, not only from charitable donations, but also from music, publishing, and other related endeavors that lead to luxury homes and complexes, private jets, and undisclosed salaries. These “charities” raise serious questions about the purpose of the charity agreement and whether they warrant such generous tax breaks.

The benefit of charities puts a strain on all taxpayers

A year into the pandemic, governments at all levels are struggling to make ends meet and provide the essential public services that our society depends on. Government budgets are being cut and many of the services that depend on tax revenues are cut or canceled.

We all pay more for the essential services provided by local, state, and federal governments as tax revenues are lost through the special tax treatment of nonprofits. It is time that the charity contract was re-examined by asking some very important and difficult questions, starting with:

How does society define the “public good” in such a way that the non-profit programs our country needs are prioritized and whose tasks actually promote our common values?

Are the costs / benefits of charity exemptions and donation deductibility reasonable for 21st century society economically and politically?

This review includes the honest dedication of policy and tax professionals, economists, elected officials, and the nonprofit sector itself to ensure that the Charity Treaty actually helps improve our cities and states, our country and our world in ways that do enables the most meaningful for the times in which we live. Without such a commitment, the non-profit sector will continue to be an all-rounder.