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The Nonprofit QuarterlyTaxing Nonprofits Per Head?
January 10, 2010; The Courier-Post | As regular readers know, NPQ is following local proposals in this cash-squeezed economy to newly tax or fees against nonprofits. This story comes from New Jersey where a proposal to tax nonprofits $100 for each employee was recently withdrawn—though it does not sound like it is completely dead. Again, much of the activity to tax nonprofits seems to be focused around areas that have large nonprofit institutions occupying large tracts of land but the effects of a proposal like this one would have been more size neutral.—Ruth McCambridge

The Nonprofit QuarterlyMichelle Obama Featured in PETA Anti-Fur Ad
January 8, 2010; | Nonprofits and for-profits alike are exploring the legal gray area of using photos of the First Family. First, there was the Shepard Fairey debacle, then Physicians Committee for Responsible Medicine used the Obama children to promote lobbying for healthy school lunches, then PETA used Michelle Obama in their Fur-Free and Fabulous campaign, now the likeness of Barack Obama himself is hawking jackets in Times Square. In all cases—at least the ones that didn’t further Obama’s Presidential bid—the White House has requested the ads be removed. Which presidential family member would sponsor your organization?–James David Morgan

The Nonprofit QuarterlySome Nonprofit Student Lenders Accused of Misconduct
January 7, 2010; Huffington Post | These articles from the Huffington Post (read here and here) describe nonprofit providers of student loans that have been charged with illegal payments to alumni associations, inappropriate compensation and “perks” for executives, and deceptive advertising—in many cases, exactly what many have criticized for-profit student lenders for doing. Due to exposes about abuses by for-profit student lenders, Congress and the Obama Administration put through an overhaul of the student loan industry, making the federal government the primary college student lender rather than guaranteeing or subsidizing loans made by for-profits or Sallie Mae. But nonprofit student lenders were permitted to bid on contracts to service the government loans (collecting payments and processing defaults). If reform legislation (influenced by Education Finance Council lobbying) gets passed, it will guarantee several of the nonprofit lenders monopoly control of loans in some states. Using nonprofits in the place of for-profits with identical outcomes is not an appropriate solution to the student loan problem, especially if the nonprofit lenders in the mix have track records of financial and ethical problems.—Rick Cohen

The Nonprofit QuarterlyScottish Voluntary Workers Fears Over Freedom of Information Act
January 8, 2010; Daily Record
| Recent research reveals that five years after their Freedom of Information legislation was enacted Scottish voluntary workers are afraid to ask the government for information, worried that their request “could damage working relationships or even put their organisation’s funding at risk.” Scotland’s information commissioner, Kevin Dunion said: “The good news is that Scotland has become more open in the five years since freedom of information was introduced, with Scotland’s public authorities disclosing more information than ever before.” But the bad news, he said, is that authorities often still fail in their legal duty to inform people of their ever important right of appeal—many times decisions are overturned on appeal. Could this could become more of an issue States-side as more and more investigative journalists—the folks who usually ask authorities to hand over documents—are employed by an increasing number of nonprofit news outlets?—James David Morgan

The Nonprofit QuarterlyPride’s Nonprofit Status at Risk
January 8, 2010; San Diego Gay and Lesbian News
| The importance of this story doesn’t really involve the problems that San Diego Pride is facing with an IRS investigation of potential misuse of charitable contributions (including having given the president of the SDP board a $5,000 “bonus,” which purportedly he has returned since the investigation started) and the mixing of charitable and tax exempt contributions. This story points out how another LGBT advocacy and service in San Diego, the Empowering Spirits Foundation, is getting calls from its members about how the IRS investigation of Pride might affect ESF, particularly from what some see as the cavalier treatment of donors by the Pride board. A representative of ESF remarked about the Pride investigation, “the seemingly greedy actions of a few individuals, who have nothing to do with our organization, may now negatively impact us.” Nonprofit executives and board members have to remember that when they mess up, it not only affects their own organizations, but other nonprofits in the same fields.  We owe ethical and accountable behavior not only to our own 501(c)(3)s but to the nonprofit sector writ large.—Rick Cohen



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