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Nonprofit Arts Make an Impact
Nov 3, 2009; Daily Record | A major topic on everyone’s mind these days is how to stimulate the economy. We’re all looking very closely at how states are divvying up Obama’s stimulus money and who’s the most “shovel-ready.” Though the U.S. economy expanded at an annual rate of 3.5% in the third quarter, unofficially marking the end of the worst recession since World War II, with weak expansion and rising unemployment, the question remains: How do we jumpstart the sputtering economy? One sector of the economy not often thought of as a powerhouse turns out to have a significant economic impact according to a study conducted by the national organization, Americans for the Arts. In Jacksonville, Florida for example, the local nonprofit arts industry generates $184.7 million in economic activity annually, including 2,399 full-time equivalent jobs, $52.9 million in resident household income, $2 million in local government tax revenues, and $2.9 million in state government tax revenues. The study shows that nonprofit arts support more jobs than accountants and auditors, public safety officers, and even lawyers. How’s that for shovel-ready?—Aaron Lester
Affordable-Housing Help: Goldman’s Tax-Credit Talks Signal Revival in Key Market
Nov 4, 2009; Wall Street Journal | Here’s a policy quandary for the nonprofit sector. TARP-subsidized Goldman Sachs is making humongous record profits, setting aside billions in salaries and bonuses for its top executives, becoming a poster child for the failure of the U.S. government to establish some important controls and quid pro quos for Wall Street’s use of billions of taxpayer dollars. At the same time, because of those profits, Goldman Sachs is apparently planning to buy low income housing tax credits at a time when the tax credit market has dropped about as low as it has ever been. So nonprofit affordable housing developers might be able to look to Goldman Sachs (and newly profitable Citicorp) to revive the tax credit market that tanked when Fannie Mae and Freddie Mac, the nation’s biggest purchasers of credits, withdraw as buyers as the federal government virtually took them over in order to save their secondary market functions. Which is more important to the nonprofit sector, advocating for controls on the big Wall Street financial firms or benefiting from their new restriction-free profitability?—Rick Cohen
Where Credit is Due: Tax Breaks to Spur Hiring?
Oct 31, 2009; In These Times | Those who cannot remember the past are condemned to repeat it. That should be obvious in the new discussions of job creation tax credits (or Dean Baker’s proposal for a job retention tax credit, by having employers virtually share work—or workers, we assume—to stave off unemployment). They seem to forget the experience of past such tax credits which we used to refer to as the Burger King tax credits, giving low-wage employers a credit for hiring the low-wage employees they would have hired anyhow. The In These Times article falls prey to another problem, the idea that a tax credit could benefit for-profit and nonprofit employers. Unless they made the tax credit applicable to the payroll tax, that is, the FICA tax that nonprofits pay toward employees’ Social Security and Medicare, a tax credit does nonprofits no good because as nonprofits, they don’t pay income taxes the way for-profits do.—Rick Cohen