One might read your Aug. 2 editorial, “A modest proposal for taxing nonprofits,” and think that nonprofits aren’t contributing to the cost of government. But they are, in large ways. Their contributions need to be at the forefront of this debate.
There are payment agreements between local nonprofits and local governments in more than 80 cities and towns across Massachusetts. The agreements, negotiated at the local level, reflect the challenges faced by nonprofits and governments at the community level. No two cases are alike. A top-down, one-size-fits-all approach wouldn’t work.
Nonprofits generate billions of tax dollars per year for state and local governments across Massachusetts. Their 529,000 jobs and more than $30 billion in wages and salaries produce billions of dollars of income, sales, and property tax revenues annually.
Nonprofits also provide billions of dollars in free or subsidized services each year that benefit local communities. From scholarships to local students, to health care provided at a cost greater than reimbursements, to a wide array of environmental, artistic, historic, and cultural programs, nonprofits make immense contributions that benefit governments and residents alike.
Those contributions add up to a social compact that is based on nonprofits’ charitable missions — addressing society’s most pressing needs. This social compact is the reason for nonprofits’ tax-exempt status, and the reason why it should stay in place.