Monday, July 17, 2017

Nonprofits - You've Got Them All Wrong

Turns out churches do feed the hungry, clothe the naked and
care for the widows, orphans, and people with disabilities.
Some trouble-maker posted a question on Facebook today, no doubt hoping to stir up a hornets nest.  The question?
  • Should churches be tax exempt? 
The outcry from the left was instantaneous and predictably lop-sided. These precious snowflake progressives cried out loudly that churches should only maybe be allowed exemption for the actual feeding the poor and sheltering the homeless they did and NOTHING else. This reveals a stunning lack of understanding of what churches do and what a nonprofit is and why they are tax exempt. Let me 'splain...
First of all, not every 501(c)(3) tax exempt nonprofit is involved in feeding the poor and sheltering the homeless. If that were the criteria for tax exempt status, you'd have to shut down most of the nonprofits in the United States. Here's what the regulation for tax exemption says:
  • To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.
There are, of course, other 501(c) nonprofit organizations that have different requirements, but for this question we're talking about churches. A 501(c)(3) organization may be tax exempt if its primary activities are charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition, preventing cruelty to children, or preventing cruelty to animals.
The United States Government has determined that it is far less expensive to defer taxes to groups which perform these types of activities than it is for the government to do them. I might add that it's a danged sight more effective too. It's far easier for groups of local folk to identify community needs and problems and create programs and organizations to deal with them than it is for a bunch of politicians thousands of miles away in Washington DC to guess what those needs might be and create a one-size-fits-all government program to solve all those unique local problems. It's the "if all you've got is a hammer everything looks like a nail" conundrum.
Nonprofits perform missions on behalf of groups of people that are working for the betterment of their community in some way. Some provide counseling to those with mental illness or those who are bereaved. The church does this too. Some NPOs provide recreation for the disabled or for groups of individuals who have a shared interest. The American Legion and VFW are nonprofits that provide a lot of support for their members in a lot of areas. 
Recently Obama's IRS went after veteran's organizations because they had balked at providing private information about their members that the IRS is not supposed to be privvy to - like social security numbers and private information of that sort. The VFW and American Legion both felt they did not want to be responsible for recording their members social security data. 
Groups like Sierra Club get tax breaks for a portion of their work that is not direct lobbying even though their primary purpose is actually lobbying. They and the World Wildlife Fund spend surprisingly little on actual animals. Mostly they pay lawyers. They get around that by providing legislators with "educational material". They neither feed nor house the homeless so, by the reasoning of the anti-church contingent, they should be taxed on pretty much everything they do.

Churches do many things, often more efficiently than the government. Food pantries in my home state did so well that the feds cut the Food Stamp budget for East Texas by $800,000. The local bureaucrats had a fit and started a $150,000 marketing campaign with the message "Food Stamps are not part of welfare reform." Turned out they just needed more application. It's not like they were going to lower the threshhold for admittance to the program or approve any more application. They just wanted to demonstrate "need" so they could get their budget increased so they wouldn't have to lay off a bunch of suddenly useless bureaucrats.

Churches minister to the spiritual needs of their congregations. You may, instead, prefer to rescue abandoned gerbils, donkeys, tigers elephants or boa constrictors. There's a nonprofit for each of those. You may want to host Renaissance Faires to promote chivalry. There's a nonprofit for that. You may want to save the whales, the owls, or the art of quilt-making. There's a nonprofit for that.
The point of having nonprofits be tax exempt is to allow Americans to band together for a cause they mutually believe in, collect a few assets with which to perform their mission, and to do some good without the tax man getting all up in your business and taking from money from you that people gave you to do something else with. The group's members and supporters, wise heads in government (an oxymoron if there ever was one) decided that these sorts of endeavors were things which should not be taxed.

Being not-for-profit has nothing to do with religion. It has everything to do with the fact that no profit is distributed to stakeholders, board members or shareholders. Every penny gets plowed back into the work. If you aren't making a profit and doing those things listed above, then you are and should be tax exempt and it doesn't matter whether I like what you are doing or not so long as your supporters do.
You may dislike religion. You may just dislike my religion. So what? I'm not fond of snakes, but I will defend to the death, your right to rescue them without being taxed for your selflessness. Sometimes I think some of my liberal friends have forgotten that it's not all about what they like or want. Some people may like or want different things than you like or want. That doesn't mean you get to punish them by taxing them or banning their activities. I'm not a fan of some environmentalist groups. They still get to exist and they still get to try and do good things that they think ought to be done. Heck, I might even show up with a trash bag for one of their beach cleanups. We don't have to be enemies simply because we differ on how to solve a problem we both often agree needs to be solved. You don't have to like me or my opinion. You just have to leave me be to have it as I leave you be to have your opinion, however wrong-headed it might be.
So, if you happen to be driving by my church on Saturday morning and see me there, and don't like it, guess what?  You can keep on driving and neither your rights nor mine, neither your enjoyment of the day nor mine needs be threatened.  Live and let live is a pretty good motto. Otherwise you could find the IRS taxing you for saving spotted owls and snail darters. They tend to take a mile if you give them an inch.

© 2017 by Tom King

1 comment:

Mark Milliorn said...

I have never understood why donations to any organization should be taxed. The donor has already paid taxes on them. How many times must a dollar be "shared" with government before they think they have their "fair share"?