NYCON Featured on NPR's All Things Considered

NPR story, Amid Red Ink, Tax-Exempts Asked To Add To Coffers, features NYCON CEO Doug Sauer.

State and local governments, eager to close their budget gaps, are increasingly going after charities and other tax-exempt groups. Government officials are proposing new fees on nonprofits to help pay for services. They're also challenging the exemptions these groups get from sales and property taxes.

In Concord, Mass., for example, the Board of Selectmen sent a letter to the town's nonprofits earlier this year. It said that local property taxes were so high they were driving residents away. The board asked the town's private schools, hospitals, charities and churches if they could start paying their fair share.

"I guess we're just hoping that in times where people are economically really stretched, that to the extent that they're able, they can contribute," says board member Virginia McIntyre.

But the initial response was not what the board had hoped. One arts group offered to contribute $1,000 to the town, but most of the nonprofits responded — politely — that they contributed to Concord in many nonmonetary ways.

'A Slippery Slope'

Kathi Anderson is executive director of the Walden Woods Project in Concord. It preserves property including Walden Pond, made famous by Henry David Thoreau — who, she notes, went to jail rather than pay a tax he opposed.

"The land that is now protected is a wonderful resource, not only for people who live in the community, but for people who visit the community," Anderson says.

She says she feels the town's pain but that her group is hurting financially, too. She says it would be hard-pressed to come up with the $89,000 Concord says the Walden Woods Project would owe if it weren't tax-exempt. Even a "donation" to the town would send the wrong message, Anderson says.

"This is a slippery slope because if indeed a donation is made, then it implies that one supports the notion of having charities essentially pay taxes," Anderson says.

And that would fly in the face of the long-time relationship between government and charity — the idea that nonprofits fill a valuable community role and should be exempt from tax.

But increasingly that relationship is being challenged. Boston wants its universities, hospitals and nonprofits to pay 25 percent of what they'd owe if they weren't tax-exempt. Philadelphia is talking to its universities about similar payments. Kansas and Hawaii considered repealing tax exemptions for nonprofits as part of their budget debates. And Minneapolis has imposed a "streetlight fee" on nonprofits to help pay for electricity and bulbs.

Tim Delaney, president of the National Council of Nonprofits, says these moves couldn't come at a worse time.

"Corporate donations are down significantly. Individual giving is down. Foundation giving is down substantially," even though demand for charitable services is up, he says. Delaney says adding more costs will only hurt taxpayers in the long run because there's high demand for the types of services — such as health care and food pantries — that many nonprofits provide.

"When we can't [provide them], then there's greater needs in the community. And when the needs get so severe, then we're going to find people demanding that government step in. That is going to cost a whole lot more," he says.

Albany's Experience

But Frank Commisso, a council member in Albany, N.Y., says cities like his have little choice. More than half of Albany's property is tax-exempt because the city is home to so many state offices, hospitals and universities. But he says these institutions still rely on city services. Read more and listen to the story here.

Arts Groups See Mayor’s Budget Plan and Shudder

The NY Times reported that It has become a New York version of Washington’s cherry blossoms: the springtime tussle over the city’s culture budget. The mayor puts forward his plan for the coming fiscal year, as he did on May 6; arts institutions insist they will be ruined by the cuts to their allocations; and the City Council puts in additional funds — sometimes more than the mayor has taken out — to ease the pain.

This year, however, the doomsayers may have legitimate reason to fear the worst. Mayor Michael R. Bloomberg’s $63 billion budget for fiscal year 2011, which starts July 1, calls for a 31 percent reduction in financing for arts groups and a 25 percent cut for libraries — steeper than any such measures he has proposed at this stage of the budget cycle in the last eight years. And the City Council will most likely have to draw from a smaller pool of funds to help make up the difference than it has in the past.

“I don’t think I can remember a more difficult time for cultural institutions in New York City,” said Ellen V. Futter, president of the American Museum of Natural History, which she said would see its city financing decline under the mayor’s proposal to about $6 million from about $12 million in fiscal year 2008, when the appropriation to the Department of Cultural Affairs was at its highest point in the last decade. “Many are experiencing record attendance at the same time that funding from the city has been drastically reduced.”

The budget will not become final until its details are hashed out between the mayor and the council between now and the end of June. But institutions are already steeling themselves to make do with much less. The New York Public Library says that if the mayor’s proposed cut of $37 million — the harshest in the library’s history — goes through, it will have to close 10 branches, cut service across the system to four days from six, reduce staff by 36 percent and offer 25,300 fewer programs and classes for children and adults. Read more here.