Nonprofits: Privilege or Obligation?
Published Feb. 19, 2020, 4:05 a.m. by djl
A nonprofit organization (NPO) is an organization dedicated to furthering a particular social cause. Nonprofits are charitable or tax-exempt under 501(c)(3) requirements, meaning they do not pay income tax and many other taxes. Furthermore, donations to nonprofits are usually tax-deductable for the donors. Nonprofits are not driven by generating profit, but they can, actually, have profits too…
However, with all these specific financial privileges, nonprofits bear few measurable obligations to their donors, volunteers, and the public.
What if a for-profit organization dedicates itself to good causes, makes profits with increased work efficiency via innovation, and pays competitive salary and tax as well? What if a nonprofit does not bring improvements to its dedicated field even with the financial subsidy from the society? Would a donor choose to donate to a good, efficient for-profit organization or individual instead of a mediocre, unaccountable nonprofit knowing that the donation made to the former is not tax-deductable?
Maybe we need to rethink our assumption that “doing good and doing well is incompatible”, and our subsidizing based on one’s name/format rather than one’s action/substance. In terms of good causes, the society need not discriminate any entity merely based on its tax-exempt status.
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