In light of the looming Massachusetts deficit, Mayor Thomas Menino and other Boston officials are exploring unconventional ways to trigger a cash influx. So many of Boston’s nonprofit organizations and institutions are now being asked if they would consider making annual payments to offset their tax-exempt status, a bold move that could tap into some goldmines but also lead wreak havoc for cherished establishments.
Nonprofits are, by definition, organizations that utilize funding to self-regulate and self-run, such as charities and foundations. For good reason, these aggregations are usually considered “off-limits” in terms of government inference: they create fundraising events, build scholarships and give back to the community in countless other ways. It’s initially difficult to condone Menino’s plan to informally tax nonprofits because of what they stand for.
However, universities such as Boston University and Harvard University would be included in this group of “nonprofit” organizations that Menino is calling upon for help. Both colleges are sitting on reserves of money from tuition money alone and should be able to contribute to the initiative. President Robert Brown told The Boston Globe that his “primary goal in life is to make BU a better institution, but it can only be a better institution if the city thrives.” Because Boston is renowned for being a college city, it is appropriate that school administrators would invest in the upkeep of its financial status and services.
But while BU and other schools can afford to donate money to the good cause of ensuring municipal services – the police and fire department, transportation, emergency services – are adequately financed, it’s much more difficult for other “nonprofits” to find money for extraneous purposes. Some hospitals are being hurt by cuts in the federal budget and, in some cases, are being asked to alleviate cuts to Massachusetts financial aid when they themselves have less money because of similar cuts. Even though the 40 major organizations asked to donate have a $15 million or higher property value, the city’s desire to triple voluntary payments in five years could put a dent in those high numbers.
This year, BU made more than $5 million in voluntary payments. Schools such as Boston College and Northeastern University each made less than half a million dollars. Each of these private academic institutions, especially the latter two, should focus on uplifting Boston’s resources for the benefit of their students and citizens in general. If nothing else, it’s simply a good thing to do.
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