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Charity Inc.: Nonprofit exemptions

By: Marnie Taylor//November 2, 2016//

Charity Inc.: Nonprofit exemptions

By: Marnie Taylor//November 2, 2016//

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Marnie Taylor
Marnie Taylor

With a historic election days away, I would be remiss not to dedicate a column to a perplexing trend affecting nonprofits. As I have noted before, nonprofits are under increasing pressure to serve more people with fewer resources – both in manpower and in cash. In the nonprofit world, we truly mean it when we say “No money, no mission.”

But at a time when nonprofits are doubling efforts to reach out to donors and fill gaps to serve those in need, it seems that some cash-strapped government entities are looking to nonprofits to partially refill their dwindling coffers. In our world, the jargon is known as a PILOT – payment in lieu of taxes. But an even more unsettling trend is happening – nonprofits are losing other types of exemptions. Government officials, legislators, assessors and even citizens are questioning charitable purposes of organization.

I sit on the board of the National Council of Nonprofits, a network of state nonprofit associations. One story we have been discussing for months is the erosion of some property tax exemptions for certain types of nonprofits. Some are large hospital systems with tens of millions of dollars in physical assets. Others are senior living facilities or nonprofit-owned housing.

As our state budget faces challenges, we will have to work harder to fund our schools and local governments. Last year, a bill was introduced that could have reduced ad valorem exemptions for certain types of nonprofits. While it did not make it out of committee, we continue to have concerns that other legislation could be introduced. While most assessors use the 501(c)3 IRS tax designation as a guide, some have argued that organizations with large buildings or property in high-value neighborhoods or public areas should pay some property taxes. We disagree.

These exemptions were created so that nonprofits could have as much money from donors as possible to provide programs and services. These exemptions allow donors to maximize investments and nonprofits to maximize impact. I hope that our Legislature will be vigilant this session to protect nonprofit missions – regardless of type, size and scope – so that Oklahomans can benefit to the greatest extent possible.

At the end of the day, government should support nonprofits through preservation of these exemptions.

Marnie Taylor is president and CEO of the Oklahoma Center for Nonprofits. She can be reached at (405) 463-6886, ext. 201, or [email protected].