Nonprofit organizations form the bedrock of civil society, representing a longstanding tradition of voluntary associations that operate independently from government control to meet community needs.
A constitutionally protected right to associate is part of the fabric of our society. The tax-exempt status of nonprofit organizations allows charities to operate with a degree of independence from government control.
Recent proposals to tax nonprofits like for-profit businesses overlook fundamental differences between the sectors, such as nonprofits’ mission-driven focus and reinvestment requirements and could harm smaller organizations providing vital services.
Nonprofits use their net income to build reserves, reinvest in programs, upgrade infrastructure, develop staff, repay debt, plan for future growth and comply with donor restrictions, all of which support their charitable missions.
Rather than imposing broad tax reforms on nonprofits, a more nuanced approach should focus on reviewing federal funding for large nonprofits with substantial endowments and reviewing existing community benefit standards for nonprofit hospitals.
From Insight to Impact: Examining Proposed Tax Changes for Nonprofits
