Crisis Presents Opportunity For Nonprofits

The economic crisis has presented a unique opportunity, at least according to a columnist from The San Francisco Chronicle.  C.W. Nevius wrote in a column on Saturday that the city of San Francisco must encourage nonprofits it supports to either close or merge with another agency.  The city spends about $500 million a year funding local agencies, many of which provide shelter for the homeless, job training, and violence prevention. 

Although Nevius acknowledges these are worthy causes, he says that there is too much overlap among nonprofits in San Francisco.  For example, there are 10 agencies providing the exact same services as Homeless Employment Collaborative, which gives job training to the unemployed.  Money could be saved by simply having similar organizations merge together.  While it might seem difficult to get many of these nonprofits to accept such a proposal, Nevius reminds readers that it has been done before.  In 1967, Haight Ashbury Free Clinic (HAFC), which was on the verge of closing because of financial difficulties, merged with Walden House after a gentle nudge by the city.  Walden helpef HAFC get out of debt and gave them a medical presence.

San Francisco has been pushing these types of mergers for three years now, though not much has become of it as of yet.  You can read the full SF Chronicle piece over at their website.

Some California Nonprofits Denied Tax Exemption

Think your organization has it rough?  According to a recent report in The New York Times, a number of California nonprofits are being denied property tax exemptions because the state's chief tax collector says they aren't doing enough to help the state's residents specifically/directly.  It's not known how many nonprofits are being affected or why this is now an issue, though the report cites California's budget crisis as a possible reason.

Nonprofits clashing with government on tax exemptions is hardly breaking news.  The Times article brings up the case of Hawaii attempting to impose a 1 percent tax on nonprofit groups, or when Boston asked nonprofits to pay what amounted to a property tax.  There was also a report on our website about how most nonprofits paid some form of tax.

It is worth noting that the process to apply for tax-exemption in California is much different than other states.  The Times piece describes it as a "two-tiered system."  Applicants first have to apply to the Board of Equalization, which collects state-mandated fees and certifies whether you are eligible for an exemption.  The final decision, however, rests in the hands of assessors in the state's 58 counties.  They make their decision by determining whether the property in question will have a "primary benefit" to the state.  If that sounds vague, there is a reason for that.  The article quotes Anita Gore, spokesman for the Board of Equalization, as saying that some things nonprofits do can't be "quantified in that sort of easy way."

If you are interested in reading the full story, head on over to The New York Times.