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Do tax-exempt institutions contribute enough money to the city? Councilors want an in-depth review

Many tax-exempt institutions, including the Boston Symphony Orchestra, make contributions to the city under the "payment in lieu of  taxes," or PILOT, program.
Many tax-exempt institutions, including the Boston Symphony Orchestra, make contributions to the city under the "payment in lieu of taxes," or PILOT, program.Dominic Chavez

Boston councilors want to take a hard look at whether key tax-exempt organizations are making big enough contributions to the city.

For years, the city has asked dozens of major educational, medical, and cultural nonprofit institutions to make voluntary payments under a program called PILOT, for “payment in lieu of taxes.” But many of the institutions have fallen far short of the amounts the city has requested.

And city data show most of the contributions have not been in cash, but in community benefits, such as free summer academies for underserved students, discounted or free admission to events, scholarships, donated office space, or the construction of playgrounds.

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Some city councilors want to assess those noncash payments.

“We need a reboot and evaluation of how we do the community benefits offsets,” Councilor Kenzie Bok said during Wednesday’s City Council meeting, held virtually.

As of November, the “community benefit offsets” accounted for $52 million of the PILOT contributions last year, versus $34 million made in cash.

Councilors indicated they want to make sure the offset benefits are going to city residents, figure out how the benefits are assessed for their monetary value, and add a framework for the types of community benefits the city will accept.

“In sum, we need community benefit offsets to be targeted intentionally and directly at creating a more equitable Boston,” Bok said in a statement.

Under the PILOT, program, the affected institutions that are valued at more than $15 million are expected to make payments instead of property taxes, though the program is voluntary. Last year, 47 institutions were identified by the Assessing Department to participate in the program. The list included some of the city’s best-known schools, such as Boston University and Harvard University, the Museum of Fine Art and the New England Aquarium, and hospitals including Brigham and Women’s and Tufts Medical Center.

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According to councilors, when it comes to community benefit deductions, “there remains room for additional transparency and oversight including a clear and consistent methodology for assessing the monetary value of such benefits.” They also want more reporting on who is benefiting from such measures.

The city data show institutions vary widely in how much they paid the city and how much was in cash. Seven institutions, including Roxbury Latin School and the Joslin Diabetes Center, had not contributed as of Nov. 3. Others, like Dana Farber Cancer Institute and the Boston Symphony Orchestra, gave the full amount, split evenly between cash and community benefits.

Mark Volpe, the Boston Symphony Orchestra’s chief executive, said it’s committed to making a PILOT contributions each year but added “we hope that the Boston City Council will consider the serious revenue losses so many of Boston’s institutions are experiencing due to the impact of the COVID-19 pandemic.”

The BSO “has been in a live performance hiatus mode since March 2020, with an associated revenue loss of $51.5 million, so this would be a particularly difficult time to incur an increased PILOT fee for us and, we imagine, for many of the cultural organizations throughout the city,” he said in a statement.

Harvard met 79 percent of the amount request, but provided $6.6 million in community benefits, versus $3.8 million in cash, as of early November. In a statement, Harvard noted that it pays municipal taxes on nonexempt property and provides “critical community programs, initiatives, and outreach.”

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Boston College chose not to participate in the program, a spokesman said, but does make payments for fire protection services. And a spokesman said the school provides more than $30 million in community benefits each year through scholarships, jobs, volunteer outreach, community grants, and assistance for Boston public and parochial schools. The city said Boston College paid nearly $366,000 of the $4.4 million that had been requested through Nov. 3.

At Wednesday’s City Council meeting, the matter was referred to a committee that will hold a hearing on the PILOT program.




Danny McDonald can be reached at daniel.mcdonald@globe.com. Follow him on Twitter @Danny__McDonald.