October 24, 2011; Source: The Wall Street Journal | Straddled by chronic budget shortfalls, state and local governments have been desperate for new sources of revenue. Some are now eyeing nonprofits that have not only been long-term partners of governments but are struggling themselves with shrinking revenues and increasing demand.
Chicago Mayor Rahm Emanuel, for instance, is keeping his campaign promise to start charging nonprofits for water and sewage services. His proposed 2012 budget calls for a 25 percent increase in water and sewer fees and the elimination of water fee exemptions for non-profits. This move is projected to net the city $7 million in needed revenues.
This is nothing new. There are those who have been clamoring for nonprofits to pay their fair share, since they do not pay property taxes. Nonprofits are increasingly being asked for payments-in-lieu-of-taxes or PILOTs.
Nonprofits however do pay back, arguably more than they get. Nonprofits help governments provide services and goods at a discount, employ people in the community, pay payroll and sales taxes, and by New York City’s experience, rent office space that would otherwise remain unoccupied.
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The Wounded Warrior Project, an organization dedicated to assisting injured veterans returning from Afghanistan and Iraq, has doubled its space in midtown Manhattan to 9,400 square feet. The Roosevelt Institute, which helps run the FDR Presidential Library and Museum and manages the Four Freedoms Center, signed a major lease expansion of 10, 400 square feet.
As the Wall Street Journal points out, “nonprofit organizations have long been a mainstay of New York’s office market especially in older buildings in Midtown South, downtown and side streets in Midtown.” This year, despite hard times, at least 10 nonprofits have signed leases for more space than under their expiring leases
It is understandable that there are those who demand that nonprofits help carry the load, but perhaps they should be fair and tally as well how much these organizations give back. Nonprofits can also do a better job at tooting their horn and letting us all know how much they contribute to our collective well-being. – Erwin de Leon