Even for those of us who don’t watch much network TV, Andy Rooney was a gift to television journalism. Do realize, however, that he started in print journalism, including being an “embedded” reporter (without that term) during World War II, and writing for Stars and Stripes. So he could write just as expertly as he could offer curmudgeonly television commentary. Sometimes his commentary provoked anger, including from those who assumed they would like what he says. He was notoriously cranky about charity, for example, and claimed to be no fan of giving things away. A culture writer at Mother Nature Network found a 1983 article Rooney wrote on charity that reflects both Rooney’s charmingly cantankerous persona and some hard-to-acknowledge truisms.
In “Charity Is Never Easy”, published in 1983, Rooney acknowledged pangs of guilt for “drop(ping) some letter asking for a contribution into the little wicker wastebasket.” The reason, he said, is because “there are so many people and organizations that need and deserve help that it’s more than I can stand to think about sometimes”—and this from a guy who professionally found things to think about and write about that many of us would have let pass without commentary (remember Joe Piscopo’s famous “Did you ever wonder why” impersonations of Rooney, using a line that Rooney never actually used himself).
“One of the difficult things about charity is deciding whom to give to,” he wrote. “You can't give to everyone who asks and sometimes those who don't ask need help worse than those who do. I don't give to the person with the dog on the sidewalk outside of Saks Fifth Avenue because I'm not sure what's wrong with him.” For Rooney, giving to and through the United Way was a “partial answer,” though he acknowledged being “embarrassed to see how little I’ve given compared to how much I have.”
Although he offered a few of the typical excuses people use not to give—“We say to ourselves that we're suspicious of how this charity spends its money, or we don't like the new policy of this school or that organization”—he ended his essay with a very uncomfortable line: “Charity is never easy. So many of the people who need it don't seem to deserve it and that provides a wonderful excuse for all of us not to give much.”
It is characteristic commentary for a professional iconoclast who quit CBS for a time because it vetoed his critical essay on the Vietnam War (he read it on PBS instead, garnering a Writer’s Guild award) and came out early and consistently against the invasion of Iraq. It’s no surprise to us that he would raise questions about charitable giving.
We encounter opinionated people all the time who think that the world is hungering for the next installment of their musings but who lack the slightest familiarity with a pertinent fact or two—much less a thought or insight of real value. Somehow, by virtue of the accident of their position or power, they think, as Barry Switzer has said, that they were “born on third base and go through life thinking they hit a triple.” Andy Rooney was idiosyncratic, argumentative, and sometimes ornery, but his grouchy commentaries were worth listening to. That we will never hear another from Rooney reminds us of the dwindling quality of public discourse in American journalism.—Rick Cohen
Wednesday, November 9, 2011
Tuesday, July 5, 2011
Tax-Exempt For-Profits Avoid Paying their Share
This post was made by Rick Cohen from Nonprofit Quarterly. Be sure to click the link to read the full post. Rick's comments are right on and clearly illustrate the double standard confronting nonprofits everywhere. As Rick relates:
Let’s see if we get this right. Nonprofits are leeches on society, they don’t pay taxes, they take our money (your money) and fail to pay their own way, they pay their executives exorbitantly, they spend too much on administrative costs, and, oh yes . . . they don’t pay taxes. This is worth saying twice, since taxes have become the prime mover of politics in recent years.
The argument is so tiresome, so monotonous, and so ill founded. It’s time to correct the record, not in tabulating how much taxes nonprofits actually pay (and they do: as employers paying matching employees’ FICA, as service providers frequently paying registration and licensing fees, as property owners paying user fees for water and sewerage, etc.), but in terms of how many tax-paying entities don’t pay the taxes they are supposed to pay or receive tax rebates.
Nonprofits are hardly the only tax-exempt nongovernmental entities in the U.S. By happenstance, hook, and crook, for-profit corporations frequently don’t pay taxes, get legislative bodies to exempt them from taxes, and they often pay their executives at levels that leave entire nonprofit budgets in the dust.
Compared to the relatively small number of nonprofits with revenues and real estate, the for-profit sector’s multiple navigation strategies to avoid federal, state, and local taxes leads to a basic question – which sector is the real tax-exempt sector?
If you know the way, you don’t have to pay—at the federal level
The crushing burden of federal taxes seems to leave many corporations much less crushed than nonprofits being hit with Unrelated Business Income Taxes (UBITs):
. This past March, Senator Bernie Sanders (I-VT) provided a list of corporate tax evaders, several of which are among the nonprofit sector’s most trustworthy corporate philanthropic benefactors:
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.
7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.
8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.
9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.
10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.
Business Insidermagazine added additional big corporations, not necessarily those with the name recognition of those on the Sanders list, that are paying next to no federal taxes:
· NextEra Energy: Pretax profits of $8.572 billion, effective tax rate of 1.74 percent
· Xcel Energy: Pretax profits of $4.334 billion, tax rate of 1.78 percent
· Amazon: Pretax profits of $3.512 billion, tax rate of 4.33 percent
· Host Hotels and Resorts: Profits of $1.116 billion, tax rate 3.05 percent
· TECO Energy: Profits of $1.62 billion, tax rate of 2.31 percent
Note that several of these corporations actually received tax rebates, putting their effective tax rates into the realm of negative percentages. In several cases, such as Exxon Mobil and Bank of America, their zero tax rates in 2009 were simply an extension of the lack of taxes they paid the previous year. In fact, many corporations over the years have managed to make their profits immune to taxation. A 2008 Government Accountability Office study found that more than half of U.S. companies doing business in the U.S. had paid no income taxes for at least one year between 1998 and 2005 and 42 percent had not paid taxes for at least two years.
Be sure to read more here.
Let’s see if we get this right. Nonprofits are leeches on society, they don’t pay taxes, they take our money (your money) and fail to pay their own way, they pay their executives exorbitantly, they spend too much on administrative costs, and, oh yes . . . they don’t pay taxes. This is worth saying twice, since taxes have become the prime mover of politics in recent years.
The argument is so tiresome, so monotonous, and so ill founded. It’s time to correct the record, not in tabulating how much taxes nonprofits actually pay (and they do: as employers paying matching employees’ FICA, as service providers frequently paying registration and licensing fees, as property owners paying user fees for water and sewerage, etc.), but in terms of how many tax-paying entities don’t pay the taxes they are supposed to pay or receive tax rebates.
Nonprofits are hardly the only tax-exempt nongovernmental entities in the U.S. By happenstance, hook, and crook, for-profit corporations frequently don’t pay taxes, get legislative bodies to exempt them from taxes, and they often pay their executives at levels that leave entire nonprofit budgets in the dust.
Compared to the relatively small number of nonprofits with revenues and real estate, the for-profit sector’s multiple navigation strategies to avoid federal, state, and local taxes leads to a basic question – which sector is the real tax-exempt sector?
If you know the way, you don’t have to pay—at the federal level
The crushing burden of federal taxes seems to leave many corporations much less crushed than nonprofits being hit with Unrelated Business Income Taxes (UBITs):
. This past March, Senator Bernie Sanders (I-VT) provided a list of corporate tax evaders, several of which are among the nonprofit sector’s most trustworthy corporate philanthropic benefactors:
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.
7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.
8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.
9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.
10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.
Business Insidermagazine added additional big corporations, not necessarily those with the name recognition of those on the Sanders list, that are paying next to no federal taxes:
· NextEra Energy: Pretax profits of $8.572 billion, effective tax rate of 1.74 percent
· Xcel Energy: Pretax profits of $4.334 billion, tax rate of 1.78 percent
· Amazon: Pretax profits of $3.512 billion, tax rate of 4.33 percent
· Host Hotels and Resorts: Profits of $1.116 billion, tax rate 3.05 percent
· TECO Energy: Profits of $1.62 billion, tax rate of 2.31 percent
Note that several of these corporations actually received tax rebates, putting their effective tax rates into the realm of negative percentages. In several cases, such as Exxon Mobil and Bank of America, their zero tax rates in 2009 were simply an extension of the lack of taxes they paid the previous year. In fact, many corporations over the years have managed to make their profits immune to taxation. A 2008 Government Accountability Office study found that more than half of U.S. companies doing business in the U.S. had paid no income taxes for at least one year between 1998 and 2005 and 42 percent had not paid taxes for at least two years.
Be sure to read more here.
Saturday, June 11, 2011
Real Business Decisions by Nonprofits? Who Would of Thought It Possible?
The Daily Star, a small newspaper located in upstate NY, recently reported that the local Girl Scout offices in Oneonta and Norwich will close June 30. As the article states: The decision comes after a 21-member task group of volunteers and staff spent nine months gathering data, holding membership forums and reviewing the properties and office spaces held by the council after its merger of five smaller councils in 2009. GSNYPENN now serves girls in 24 counties in New York and two in Pennsylvania.
Feedback: Although for some this may seem a negative, especially in the local rural region, nonprofits need to increase efficiencies and strengthen their business operations to maintain services and be viable in the today's environment. These kinds of difficult decisions are needed and should be expected. Of course, there are implications here around rural versus more urban areas, but ultimately what needs to be remembered is that the bottom line is just as important in the nonprofit sector as in the for profit. People will disagree and take issue with decisions like this, especially anytime local ownership and presence is impacted, but with the economic downturn and significant competition for contributed revenue, this is now a regular part of doing business. "Businesses" lay off people everyday, and nonprofits have been forced to make the same, painful decisions. The difference is that unlike for profits that are truly focused on maximizing revenue for profit, nonprofits are making decisions, in most cases, that will allow them to maintain services, strengthen their organizations, enable them to fulfill their mission and most importantly, best serve their constituents with the programs and services they want and need. So, politicians, communities and consumers of nonprofit services, please remember these are business decisions, and they are taken with careful thought and due diligence by board members and staff that are your peers, neighbors and voters.
Feedback: Although for some this may seem a negative, especially in the local rural region, nonprofits need to increase efficiencies and strengthen their business operations to maintain services and be viable in the today's environment. These kinds of difficult decisions are needed and should be expected. Of course, there are implications here around rural versus more urban areas, but ultimately what needs to be remembered is that the bottom line is just as important in the nonprofit sector as in the for profit. People will disagree and take issue with decisions like this, especially anytime local ownership and presence is impacted, but with the economic downturn and significant competition for contributed revenue, this is now a regular part of doing business. "Businesses" lay off people everyday, and nonprofits have been forced to make the same, painful decisions. The difference is that unlike for profits that are truly focused on maximizing revenue for profit, nonprofits are making decisions, in most cases, that will allow them to maintain services, strengthen their organizations, enable them to fulfill their mission and most importantly, best serve their constituents with the programs and services they want and need. So, politicians, communities and consumers of nonprofit services, please remember these are business decisions, and they are taken with careful thought and due diligence by board members and staff that are your peers, neighbors and voters.
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