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Too Many Nonprofits? IRS in High Approval Mode
Dec 5, 2009; New York Times | The nonprofit sector can always count on Stephanie Strom of the New York Times for examination of nonprofit issues that would bypass most other reporters. This article notes that the number of nonprofits eligible for tax-deductible charitable donations has increased 60% during the last decade to 1.1 million organizations (our data suggests that it’s more like 1.2 million 501(c)(3)s, but who’s quibbling?). The editors headlined the piece as nonprofits “costing U.S. billions in tax breaks,” thanks a lot to Times editors, though the reality is that charitable deductions cost the nation less than $50 billion (PDF, page 43), not a huge amount for the support of over 1 million charities-dwarfed by federal program expenditures such as TARP and others. The more significant part of Strom’s article is the revelation that the IRS approved 99% of 501(c)(3) applications last year, suggesting as a study from Stanford University observed that the IRS isn’t giving these applications much of a review. Congressman Xavier Becerra has long questioned whether the benefit of the charitable deduction is reaching people most in need, so these approval rates left him nonplussed.—Rick Cohen
Many Stimulus Jobs in Georgia are Temporary
Dec 6; Atlanta Journal-Constitution | This is going to be one of the ongoing challenges coming out of the White House jobs summit that President Obama convened and for the nonprofit leaders that were invited on Dec. 3. The AJC report suspects, as do we, that many of the jobs created through the stimulus have been temporary jobs, likely to disappear when the stimulus money—much of it short-term one-year funding—disappears. In the Atlanta metro region, job training and placement groups like Cobbworks, cited in this article, have been doing what they can with summer job placements, putting kids through job training “bootcamps” on how to dress and behave for the workworld, but if there are no jobs for them coming out of these programs, the stimulative impact will be lost. As the research director for the nonprofit advocacy group, Good Jobs First, put it, “If it turns out that a large portion of the overall jobs nationwide throughout the stimulus program turn out to be these kinds of jobs, then I would say that is a problem.” Hopefully, those nonprofit “leaders” invited to the Obama summit will be talking about the nonprofit sector’s role in generating permanent jobs and in providing jobs in the nonprofit sector itself.—Rick Cohen
Still with the Sector Envy?
Dec 5, 2009; Chicago Sun-Times | For any of us still naive enough to wallow in low self-esteem where management savvy is concerned we bring you the second report in a week that suggests that when nonprofits and for profits compete head to head in a particular field, nonprofits are just as likely to best their competition as the other way around. Last week we ran a story about nonprofits and for-profits competing in school management. This week the Chicago Sun Times brings us a story about what the Scripps Howard News Service found by analyzing a recent rating report of the Centers for Medicare and Medicaid Services’ Nursing Home Compare system. Here is the story in short form:
- Institutions run by for-profit corporations, which account for about two-thirds of all nursing facilities, generally get lower scores than those run by nonprofits, and
- Homes with more nursing staff per patient, which also tend to be run by nonprofits, generally do better in the ratings.”
This should by no means be taken to say we nonprofit managers do not need to improve our performance but under-rating our competence will never convince anyone to send more capital this way.—Ruth McCambridge
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