Should Non-Profits Pay Taxes? Solving Christians’ Perception of the Problem

A Brief Intro to the Topic of Taxing Non-Profits: More and more, cities are near bankruptcy.  The fact that many cities are still dealing with the effects of the flight of the wealthy (some never have recovered), it has often been non-profits (colleges, churches, action groups, etc.) who have remained to serve those in the cities.  With less income, those who work at the restaurants and shopping galas and art communities in cities, tend to live off less income and have apartments that generate less revenue than a home would.

Since times are tough, the issue for cities is: “We Need More Money,” and how do we get it.  The first time I heard that a city was trying to find revenue from a non-profit, it was from the city of Worcester, MA seeking a tax on each college student within its boundaries.  Then, while in seminary in South Hamilton, MA (at Gordon-Conwell Theological Seminary), a local action group called “Enough is Enough” began a local paper to get their message out, and claimed the Seminary had an unusually high adverse impact on the community (considering the amount of families, some international, that lived on campus who had children that went to the local schools).  An impact study was done at the school, and cooperating with local town officials, the school determined that the school contributed millions in volunteer hours and economic spending to the community, and local school officials lauded the international presence as adding to the education of the local students.

A new article in the Wall Street Journal, highlighted the issue again, by talking about the city of Houston, seeking to impose water drainage burdens onto non-profits who operate within the city limits.  It seems practical and fair to the city, because nonprofits share in the benefits of upgrades that are often Federally mandated.  A local pastor was quoted saying that they will oppose the measures, and that nonprofits should not be taxed.   Historically, this is true – nonprofits have not had to pay taxes because they are seen as cooperating with the municipalities in providing services to cities (as stated in the article by the WSJ).

While normal struggling churches, colleges, and nonprofit action groups may not be able to pay, how should Christians view this dilemma, and how could this turn into a win-win situation for people who live in cities?

Assessing the situation off the bat, there are some facts we need to take into account that many ministers may not have thought through: (1) American culture is transitioning to a non-Christian mass culture that is not friendly to Christianity, (2) those who are Christian have very little knowledge of what Christianity is, and have little capability to turn around public perception, and (3) most religious institutions, which are the cultural support of many aging people, are often inappropriately perceived to be a drain on society (think about the amount of fundraisers your church does, and how that might be perceived by a non-Christian culture – we look like takers, not givers).  At one point in the past, religious news was in the paper regularly, then the religion news got relegated to a religion section, and now religious coverage is usually just the Christmas service schedules while the charity of the church is overshadowed by non-affiliated groups like The United Way and Toys for Tots – both of which receive front page coverage.

It is obvious that as people no longer understand Christians, the culture is becoming more hostile towards Christianity as a whole.  The values of Jesus, including peace, love, giving beyond expectations, and loving God and others with excellence are not common perceptions.  This is a sad state of affairs.

So how do we address the issue as Christians?

Our first line of action needs to be reversing the perception that Christians and their churches/colleges (nonprofits) are a drain.  Gordon-Conwell’s relational approach and direct leadership was a great step in the right direction.  By pointing out the positive impact, releasing press notes to the papers, and cooperating with town officials – the school was actually defended by writers in the local paper who lauded the fact that the seminary preserves green space that would otherwise be developed.  An engagement is necessary.

Second, churches need to find a way to be known for Generosity.  I once heard of a pastor who after realizing how many of his congregants were in a restaurant with him, went to a waitress who reported to him how bad tippers his church mates were.  He then gave a big tip to cover everyone, thanked her, and preached on it the next Sunday.  Christians who have been blessed should be known as big tippers and loving neighbors.  Do you know your waitress’s name?  Do you know your next door neighbor?  Have you invited them to dinner and listened to their concerns?  As Christians we are challenged to go beyond providing for our basic needs, and if we have, we are to give.  Churches could use a face-lift too, by giving generously to the community in various ways – church members show that they are not the lame holier than thous they thought we were.

Third, when a pastor is asked whether they would support the town by paying drainage fees, respond in a Generous way.   Don’t say, “We’ve never paid before,” rather, say, “The inter-church council is looking at how we can help the community rebuild their drains and make our home safer for everyone who lives here.”  Seriously! We build wells for people all over the world, can’t a part of the budget (not at the expense of missions) be apportioned to helping the city be a safe place to live?  The church who pledges to pay for even 1/10 of the repairs would be lauded, and if not so what.  Word of mouth spreads and people will know what you have done.

Conclusion: So while it should not be law that non-profits should pay taxes to the state, or be required to hand over cash – could the churches, in a move of sacrifice, find a way to love their community so much that they could rebuild the drainage systems at their own cost?  I would like to talk to the pastor of that church, and I would like to attend that church.  Politics aside, people live off the infrastructure, and the people are the ones who God loves, and who may or may not find hope through your representation of God’s Kingdom. Let’s get this going people!

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