Can you say nonprofit, kids? The National Football League can. So can the Professional Golf Association. So can the National Rifle Association. And so can the Motion Picture Association of America, the folks who put on the lavish Academy Awards ceremony each year. These are just a few of the wealthy organizations listed as nonprofit by the Internal Revenue Service. U.S. News and World Report recently spent four months investigating so-called non-profit organizations. In stories published Oct. 2, reporters Penny Loeb, Edward Pound and Gary Cohen revealed that 1.1 million "non-profit" organizations in the United States control $1.475 trillion is assets while claiming tax-exempt status.
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That means they do not pay taxes on property. They do not pay taxes on income. They do not pay taxes on profits from capital gains, royalties, interest, dividends and rents from debt-free real estate. They get reduced postal rates.
They do compete with for-profit enterprises, which claim that their own tax dollars underwrite the products of their non-profit competitors. And they do get to keep a chunk of change that could otherwise benefit the U.S. Treasury and various municipalities and schools.
For example, financially ailing Washington, D.C., is home to 1,800 nonprofits. If those groups paid taxes on their land and buildings, Loeb reported, the district would collect nearly $94 million more each year. New York City, which recently cut $754 million from its school budget to balance the city budget, could collect an additional $524 million from nonprofits. Albany, N.Y., could collect $25 million more from taxing nonprofits. The cost to the U.S. Treasury is impossible to calculate, the magazine concluded.