logo
Donate
    • Membership
    • Donate
  • Social Justice
    • Racial Justice
    • Climate Justice
    • Disability Justice
    • Economic Justice
    • Health Justice
    • Immigration
    • LGBTQ+
  • Civic News
  • Nonprofit Leadership
    • Board Governance
    • Equity-Centered Management
    • Finances
    • Fundraising
    • Human Resources
    • Organizational Culture
    • Philanthropy
    • Power Dynamics
    • Strategic Planning
    • Technology
  • CONTENT TYPES
  • Leading Edge Membership
  • Newsletters
  • Webinars

PILOTs in the Recession

Rick Cohen
December 1, 2010

November 30, 2010; Source: Associated Press | The Lincoln Institute of Land Policy has just produced the definitive study of Payments in Lieu of Taxes (PILOTs) that are slapped on tax exempt nonprofits to help pay for municipal services. The report documents PILOTs in 117 municipalities in 18 states. The researchers say that Boston’s pilot program is among the nation’s most “revenue productive.”

So why don’t all municipalities eke PILOTs out of nonprofits? Well, they work best in municipalities that are heavily reliant on property taxes for government revenue and have a large amount of nonprofit-owned tax exempt property. The Lincoln Institute researchers note several significant PILOT problems and more generally tax-exempt property issues: the property tax exemption benefits nonprofits with the biggest holdings of valuable real estate “rather than those providing the greatest public benefit;” the cost of the property tax exemption is borne by the host community even if the nonprofit serves and benefits a regional or national population; PILOTs are often haphazard and calculated in an ad hoc manner, resulting “in widely varying payments among similar nonprofits;” and the methods used by taxing entities to negotiate PILOTs are often less than transparent and inconsistent.

The study isn’t against PILOTs and suggests for those municipalities with significant tax exempt property holders that they devise systematic PILOT programs that help create “horizontal equity.” The authors also suggest substituting user-fees for PILOTs in some cases. That is, having tax exempt property owners pay for some of the public services they consume and, as tax exempts, don’t pay for. And they laud states such as Connecticut that provide grants to municipalities that have sacrificed, so to speak, some of their tax base to tax exempt property owners.

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

NPQ has published its own treasure trove of articles and newswires about nonprofits’ experiences with municipal PILOTS:

  • Turning Tax Exemption on Its Head
  • Canadian Court Tells Feds to Pay Up
  • City Proposes 3-Year Tax Exemption to Business
  • Who’s on First? Who Cares, Give Us Your PILOTs
  • No PILOTs Yet for Philadelphia
  • Pittsburgh Promise Scholarship Raises $11.3 M in Year
  • Colleges and City Finding Common Ground on PILOTs
  • No Hurt, No Blues, No Service: Taxing Nonprofits in Oak Bluffs
  • Why Doesn’t City Hall Pay Taxes?
  • No PILOTs Yet for Philadelphia

These are just a sampling of our coverage of the PILOT story in 2010.

Supplementing studies like the Lincoln Institute report, NPQ’s stories track the politics of PILOTs in large and small communities and tell about what actually happens in negotiations between nonprofit property owners and revenue-starved local governments. Tell us what you’re seeing and hearing about PILOTs during this time of prolonged and unshakeable economic recession.—Rick Cohen

About the author
Rick Cohen

Rick joined NPQ in 2006, after almost eight years as the executive director of the National Committee for Responsive Philanthropy (NCRP). Before that he played various roles as a community worker and advisor to others doing community work. He also worked in government. Cohen pursued investigative and analytical articles, advocated for increased philanthropic giving and access for disenfranchised constituencies, and promoted increased philanthropic and nonprofit accountability.

More about: Nonprofit News

Our Voices Are Our Power.

Journalism, nonprofits, and multiracial democracy are under attack. At NPQ, we fight back by sharing stories and essential insights from nonprofit leaders and workers—and we pay every contributor.

Can you help us protect nonprofit voices?

Your support keeps truth alive when it matters most.
Every single dollar makes a difference.

Donate now
logo logo logo logo logo
See comments

You might also like
New Tariffs Will Likely Deepen Economic Burdens for Women of Color
Rebekah Barber
Black Imagination as Strategy: Reclaiming Creativity in Nonprofit Leadership
Coniqua Johnson-Reed
With Major Sponsors Out, Who Is Stepping Up to Support Pride?
Alison Stine
Liberation Stories: A Conversation with Shanelle Matthews and Marzena Zukowska
Steve Dubb, Shanelle Matthews and Marzena Zukowska
Using Narrative Power to Advance Liberation: Six Key Elements
Shanelle Matthews and Marzena Zukowska
Meet the Hidden Majority of Nonprofits: The All-Volunteer Organization
Jan Masaoka

Upcoming Webinars

Group Created with Sketch.
June 26th, 2:00 pm ET

From Performance Management to Mutual Commitment

Fostering a Culture of Joyful Accountability

Register
Group Created with Sketch.
July 24th, 2:00 pm ET

Organizing in Divided Times

The Relational Infrastructure We Need to Protect Democracy

Register

    
You might also like
Conservatives Attack Nonprofits on Capitol Hill
Isaiah Thompson
Glass-paneled exterior of the Microsoft building.
Microsoft Axes Free 365 Software for Nonprofits
Isaiah Thompson
US Capitol Building
Tax Provision Would Give Trump Administration Unilateral...
Rebekah Barber and Isaiah Thompson

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

  • About
  • Advertise
  • Careers
  • Contact
  • Copyright
  • Donate
  • Editorial Policy
  • Funders
  • Submissions

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.