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Charitable

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Today, I opened my email to find this

http://thefederalist.com/2013/10/04/taking-back-the-arts/

That’s a link to a conservative article on ending federal (and other government) money to the arts.

Originally, I didn’t think very much of it, except that I was mildly annoyed.  The person who sent it to me implied that I, of course, would be in favor of such government money to the arts, and gave me a set of reasons why that would be so.

It was one of those “For God’s sake, isn’t ANYBODY listening?” moments, because I’m on record several times on this blog as being opposed to such expenditure.

In fact, I’m on record at length.

The article itself was no sparkling font of originality and wisdom.  It says what these articles more or less always say, and I agree with it.

What caught my attention was something I already knew but don’t usually think of when I think of funding for the arts, and that I should.

And that is–that arts funding goes to non-profit organizations.

And that the big problem with non-profit organizations in this country is not that we don’t require them to be politically neutral, but that we don’t require them to behave like non-profits.

The part of the article that got me thinking about this was a short paragraph about how such non-profit and publically funded theater companies routinely charge $70 apiece for tickets, thus pricing most of the people whose tax money they are using out of the experience.

This would be the case even if they didn’t get money from the NEA or other government sources, because the money they don’t pay in taxes is money that is not available for other public functions.  This is especially true of property taxes, since property taxes are what fund public schools in most municipalities.

There are, of course, some kinds of tax exclusions that have other rationales besides public utilities. We don’t tax churches because, as Jefferson said, “the power to tax is the power to destroy.”  The free exercise of religion being our first and most important right, we don’t trust governments to tax churches (or synagogues or mosques or humanist chapels) fairly and without taking sides.

Most of the time, when we grant organizations and institutions non profit status, it is because we are convinced that they are providing an important service that we want to encourage.  We assume that such organizations will provide these services in such a way that will make them largely available to the general public.

In other words, we decline to take their taxes under the assumption that they will be operating at a loss so that more people can benefit from them.

Does this sound to you like the way major nonprofits operate these days?

At all?

Even a little bit?

Let us pass over, for the moment, the way in which many of these organizations pay their top administrators as if they were the employees of an investment bank.

The heads of such nonprofits as the Red Cross, Harvard College and the Yale-New Haven Hospital are compensated like any other members of the Major CEOs Club–at the lowish end of it, but only lowish.  A seven figure salary is a seven figure salary, and it doesn’t begin to unearth the perks of a first class benefits package.

What’s far worse is that most high-end  nonprofits are dedicating to charging the public whatever the traffic will bear. 

Yale University has an endowment large enough so that it could eliminate tuition for every one of its students.  It has vast property across the landscape of the city of New Haven, a minority-majority municipality that has persistant problems funding public schools and basic services.

All that property is untaxed, but far from providing education at a discount, Yale provides it at a premium. Not only are the sticker prices high–in the $60,000 range for tuition, room and board for a single year–but even its discounted prices are too high for most middle class families to cover without going into very significant debt.

Then there is the Yale-New Haven hospital, which not only charges the top end of everything for medical care, but also goes after “deadbeats” (read: sick people without the money to pay up, with no or insufficient insurance) just like any for-profit medical center. 

The question, for me, is–what are we abating these taxes for?

If nonprofits are going to behave like for profits, why accord them all these special privileges?

Why not insist that nonprofits earn their tax exemptions by behaving like nonprofits:  by charging less than a forprofit company would, by paying lower compensation than a forprofit would, by actually being charities?

And if theaters are going to have nonprofit status, with or without government money, why not insist that their ticket prices be low enough so that most people can actually afford them?

As far as I can tell, these days “nonprofit” has come to mean “need charismatic jobs for people like us, and the public be damned.”

 

Written by janeh

October 6th, 2013 at 11:42 am

Posted in Uncategorized

9 Responses to 'Charitable'

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  1. Uh, I’d like to see the length you were at on this Blog?
    I myself am so heretical, I think the Federal government should restrict itself to enumerated powers, and that maintenance of the welfare state would require a constitutional amendment, which ought to set limits on it. But so long as the Ruling Class thinks there is a “general welfare clause” authorizing it to “do good things for good people” we’re not going to keep them from passing our tax money to their friends and supporters.

    Non-profits No more than two or three weeks ago, we were at this from another angle. The Ruling Class expects to be “well-off” (i.e., filthy rich) and it’s generally in favor of hard work. But it thinks it’s tacky to get rich by providing goods and services to willing buyers and making an “excessive” profit. (They get to judge, of course–and who would know more about excess?) So seven-figure salaries for “activists” running non-profits if fine, but for profit schools are subject to special scrutiny even if the owner makes a fraction of the money paid an Ivy League administrator, and excess profits in health care are now illegal no matter what a bargain your services might be to the customer.

    Me? I’d throw the whole “charitable donation” concept out of the tax code–but I’d also seriously lower tax rates. I’d also tax non-profit real estate holdings, and get the IRS to decree that executive compensation or perks above a certain level WAS profit–or income–and tax accordingly.
    I’ll go further. Churches would remain untaxed for good constitutional reasons WHILE CARRYING OUT A RELIGIOUS FUNCTION, but at no other time. If the church takes up a city block and pays no property tax, that’s one thing. If they own a radio station to broadcast the good news, still OK. But if they start selling time on the radio, they pay the same taxes as anyone else. They will have left off preaching and gone into politics.
    Which is where much of our “non-profit” art community already is. Imagine a world in which writing a play, opera or ballet performance which would draw an audience was more important than writing one which would get a government grant.

    robert_piepenbrink

    6 Oct 13 at 2:16 pm

  2. One problem with the government funding the arts is that “the arts” tend to be in big cities. I find it difficult to understand why people in Arkansas should pay taxes to support an opera which never leaves New York City.

    I also dislike the situation where a donor receives a tax deduction but the charity never pays tax. How about leaving the deductions as they are but require the charity to pay tax at 1/2 the corporate income tax rate?

    jd

    6 Oct 13 at 7:48 pm

  3. Me too. :-)

    But, as an aside, perhaps there is hope that “charities” will be pulled into line sooner rather than later. I never thought I’d ever see the day when I agreed with Vladimir Putin about anything, but his charging those Greenpeace thugs with piracy just made my year.

    Mique

    6 Oct 13 at 9:17 pm

  4. Not just that, Mique. Putin warned us during the Kosovo business that supporting separatist movements was a game everyone could play–often with horrific results–and that we might come to regret an Islamist victory in Syria. I really hate it when the brutal semi-dictator seems more grounded in reality than the leadership of the democracies. Makes me wonder if we’ve missed something.

    robert_piepenbrink

    7 Oct 13 at 11:20 am

  5. Robert, a semi-dictator can ignore the bleeding hears who scream “People are dying! Do something!”

    jd

    7 Oct 13 at 2:47 pm

  6. Especially for those not in the US; the wonders of the bureaucratic state:

    http://www.realclearpolitics.com/articles/2013/10/11/1-800-t-o-t-a-l-f-a-i-l_one_mans_obamawreck_nightmare_120302.html

    Jane warned about this one. Please note the responsible Federal bureaucrat–as though Federal bureaucrats could be held responsible!–tells us registration not takes half as long as they did at first. But she won’t say how long that is, and won’t say how many people have successfully navigated the maze. Evidently those are not the sort of facts the most transparent administration in American history feels the people should have.

    robert_piepenbrink

    11 Oct 13 at 9:14 am

  7. Should be “now takes” rather than “not takes” of course. If I could spell and read I’d be dangerous.

    robert_piepenbrink

    11 Oct 13 at 9:15 am

  8. OK, cheating. But another Jane topic–the stubbornness of the human mind, and the abiding belief in certain circles in the blank slate.

    Behold Saki on the same topic c. 1913:

    http://www.eastoftheweb.com/short-stories/UBooks/ToysPeac.shtml

    robert_piepenbrink

    11 Oct 13 at 9:44 am

  9. I know nothing about Obamacare but did spend 40 years working with computers. From what I’ve heard, the system involved 100’s of millions of people, 100’s of insurance companies and 50 states. I would doubt that any IT professional would want it to go online all at once. Start with one state and gradually expand it over a period of 3 months or longer.

    Loved the Saki story!

    jd

    11 Oct 13 at 5:46 pm

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