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In defense of nonprofits
They are not a 'drain' on government; they are invaluable government partners
Wednesday, June 18, 2008

Allegheny County nonprofit organizations last year provided food to more than 120,000 people -- more than a third of them children -- free access to books to more than 2 million library visitors, safety to more than 5,200 women and children, and utility-bill relief to more than 12,000 residents. These are just some of the compelling examples of the work of local charities, many of them staffed by dedicated volunteers, who increasingly struggle under growing financial constraints to deliver much needed services to the needy, the disadvantaged and the underrepresented.


Amy Hart is chair of the Greater Pittsburgh Nonprofit Partnership and president of the Center for Hearing & Deaf Services, Inc. (hdscenter.org).Diana Bucco is president of the Forbes Funds (forbesfunds.org).

It is disconcerting, therefore, that rather than being celebrated for the crucial contributions our nonprofits make to the well-being of our community, they instead are labeled a "drain" on government, according to media reports of discussions at Allegheny County Council and the Pennsylvania state Senate questioning the validity of the tax-exempt status accorded the nonprofit sector.

Nonprofits are tax-exempt because they provide many critical services that government is unwilling or unable to provide, such as educational programs, food for the hungry and medical care for the uninsured. They relieve government from the need to care for our most vulnerable citizens -- this is the basis for their tax exemption.

The nonprofit sector also employs more than 630,000 individuals across the commonwealth and in 2007 leveraged $7.94 billion in foundation and individual giving to better serve the needs of the poor, making the case that, far from being a "drain," the nonprofit sector is a significant government partner in helping the citizens of our region.

Nonprofit organizations are integral to our social fabric. Organizations like North Hills Community Outreach in the North Hills, Human Services Center Corp. in the Mon Valley and the Greater Pittsburgh Community Food Bank in Duquesne provide services and food to the most vulnerable in our communities. Others like Goodwill of Southwestern Pennsylvania provide resources and job training to help our neighbors, particularly in tough economic times. Health-related organizations provide services to the uninsured. Nonprofits like the Greater Pittsburgh Arts Council improve the quality of life in our region through the arts. The Riverlife Task Force ensures the health and beauty of our riverfronts.

Nonprofits are integral to our region's economy. There are nearly 2,700 in the Pittsburgh metro area, with revenues of more than $12 billion. The average operating budget is about $500,000 per year and the vast majority operate on lean margins; 90 percent on budgets of less than $1 million per year. Nonprofits consistently achieve much with very little.

Current discussions in the state Senate and the Allegheny County Council suggest that tax-exempt organizations should pay their "fair share" for services rendered by the government through service fees imposed at the municipal level. But any funding redirected to government must be diverted from community needs, and with such fees would come increased administrative burdens to assure compliance with regulations, further diverting resources from important missions that serve the community.

Even as nonprofits provide services that government cannot or does not provide, some still make voluntary contributions to support our city government. The 100-plus organizations that have joined the Pittsburgh Public Service Fund already give the city of Pittsburgh more than $13 million and have pledged to give more. There are countless other agreements between organizations and municipalities across our region that highlight the generosity of the nonprofit sector.

We understand that imposing service fees on nonprofits is not meant to punish these important and necessary organizations, but rather to ensure that local municipalities can continue to provide needed services in tough economic times. But imposing service fees on tax-exempt properties would paste a Band-aid on this more deeply rooted problem. Furthermore, it would dishonor nonprofits, the donors and volunteers who support them, and the communities they serve for this to be rationalized with unfounded descriptions of charities as a "drain" on government.

First published on June 18, 2008 at 12:00 am