Report: More Cities Seeking PILOTs

A new report from the Lincoln Institute of Land Policy revealed that at least 218 local governments have received payments in lieu of taxes (PILOTs) worth $92 million per year from about 490 nonprofits.

The report, titled "Payments in Lieu of Taxes by Nonprofits: Which Nonprofits Make PILOTs and Which Localities Receive Them," surveyed local government officials in 599 jurisdictions with the largest nonprofit sectors in 2011. Authors Adam H. Langley, Daphne A. Kenyon, and Patricia C. Bailin acknowledged that while PILOTs can refer to many different types of payments, their definition "excludes any payments from for-profit companies or public entities (e.g., housing authorities) and any payments from nonprofits that are not voluntary, such as fees."

Findings of the study included:

• Although more than 90 percent of all PILOT revenue comes from "eds and meds," college payments are found to be more important than those from hospitals. PILOTs from colleges and universities accounted for about two-thirds of payments, while hospitals contributed only a quarter.
• The Northeast accounts for about 75 to 80 percent of PILOTs, with the greatest activity coming in Massachusetts and Pennsylvania.
• Most nonprofits make fairly small PILOTs while most revenue generated comes from a small number of multimillion-dollar PILOTs. As a result, the average PILOT for all nonprofits ($292,952) is nearly 10 times larger than the median ($30,000).
• PILOTs generate little revenue in most cities, accounting for less than 1 percent of total general revenue in 165 out of 181 localities that contributed to the survey.
• Most PILOTs go to cities and towns, but at least seven school districts and four counties also receive PILOTs.

The NonProfit Times has reported on PILOTs in recent years. Most recently, we reported that Brown University agreed to double its payments to Providence, R.I., increasing the university's payments to the city to $31.5 million over 11 years. According to the Lincoln Institute Report, Brown is one of 10 nonprofits that contribute the most money to cities. The other organizations on that list include Harvard University, Boston University, Massachusetts General Hospital, Dartmouth College, Brigham & Women's Center, Massachusetts Institute of Techology, and Yale University.

If you are interested in reading the rest of the Lincoln Institute Report, you can view the PDF here.