|Back to June Ed Reporter|
|NUMBER 269||THE NEWSPAPER OF EDUCATION RIGHTS||JUNE 2008|
|When is a Nonprofit Not a Nonprofit?|
Governments have also challenged the nonprofit status of some universities, especially those with large endowments. Massachusetts is considering a 2.5% annual tax on universities with endowments over $1 billion. The proposed tax primarily targets Harvard University's $35 billion endowment, the nation's largest by far.
Also in Massachusetts, local assessors attempted to tax Smith College in Northampton because it is a women's college. By the assessor's reasoning, the school should not qualify as a nonprofit because it practices sex discrimination against men.
The federal government has also raised questions about the tax-exempt status of some nonprofit organizations, especially hospitals, universities, and churches. Federal tax exemption means nonprofits pay no federal tax on incoming funds. The Senate Finance Committee is now investigating six evangelical ministries to reevaluate whether they qualify as tax-exempt nonprofits. Congress has also considered laws that would require universities to make minimum payouts from their endowments, in the form of scholarships or other charitable donations. (New York Times, 5-26-08)