Allegheny County has become the second local government this week to have its hand out for financial contributions from large nonprofit institutions.
On the heels of Pittsburgh Mayor Luke Ravenstahl calling for fees on nonprofits such as bed taxes for hospitals and higher water rates for the city's 2010 budget, county Executive Dan Onorato notified nonprofits he will be looking for $4 million from them for the county's 2011 budget.
While acknowledging that nonprofits contribute mightily to the public good, Mr. Onorato suggested it's time they contribute more than that.
Quick to note the difference between his and Mr. Ravenstahl's proposal to enforce fees on nonprofits, Mr. Onorato said, "These are two separate issues."
"And again, the city budgeted [for the revenue through nonprofits]. I didn't budget for it at all; it's not in my budget until 2011."
The county's plan is simple: Large nonprofits such as hospitals would make financial contributions to the county coffers in lieu of taxes. In return, Mr. Onorato said, the county could help the nonprofits gain some measure of recompense at the state and federal levels.
How these "contributions" would be made and what might constitute suggested amounts are still unclear. Mr. Onorato said his office is working with the state Department of Public Welfare in Harrisburg on the details, a process that has been stepped up recently.
State law enacted in 1984 prevents the taxing of nonprofit organizations. Mr. Onorato, in presenting the proposed $773.5 million 2010 budget to County Council earlier this week, mentioned plans to balance the 2011 budget through $30 million in new and consistent revenue sources.
This would include an estimated $4 million to $5 million in contributions from nonprofits, a number, he said yesterday, he viewed as conservative.
"If it's higher, all the better," he said.
The county will start with requests from hospitals, "because they're the largest [nonprofits] in the region. It doesn't mean we'll stop there."
The city already receives some funding from nonprofits through the Pittsburgh Public Service Fund -- $14 million from 2005 through 2007. It has offered $5.5 million for 2008-10, but City Council hasn't acted on that proposal.
The Rev. Ron Lengwin, spokesman for the Diocese of Pittsburgh as well as the Pittsburgh Public Service Fund, said he was unaware that the county was joining the city in requesting such contributions.
Unfamiliar with the county's proposal, he said he would decline specific comment, but added, "This should be an interesting discussion."
Peggy Morrison Outon, executive director for the Bayer Center for nonprofit management at Robert Morris University, has worked with nonprofits for more than 30 years.
She said the idea of requesting funds from nonprofits, no matter how large or seemingly prosperous, is a bit discouraging.
"Aren't they making a significant contribution in the form of medicine and education? The people who work in nonprofit care as much about the community as anyone.
"They have given their lives toward making a contribution toward the common good in a time when they are finding at every turn it is more and more difficult to raise funds."
