Nonprofits Increasingly Pay Local and State Taxes, Study Finds

Nearly two-thirds of nonprofits say they pay some type of local or state tax, user fee, or other compensation to local governments to finance services and benefits supported by tax-paying entities, according to a new study.

The survey was conducted by the Johns Hopkins Center for Civil Society Studies, in Baltimore, as part of the Listening Post Project, a research effort to examine issues facing tax-exempt groups.

Of the 358 groups that provided data, 63 percent reported making payments to state or local government agencies. In many cases, those payments were small parts of their budgets.

The median amount paid to government agencies by the nonprofit groups surveyed was 1 percent of annual operating expenditures. The average of the taxes, fees, and payments was 2.6 percent of the total operating expenses.

The report’s authors said local governments have been stepping up efforts to charge nonprofits fees for services to help make up for state and local fiscal shortfalls. Others are increasing the amount already charged.

Few nonprofits are fighting against the proposals to impose new fees. Only 15 percent reported that they had joined with other nonprofits to fight such proposals, and 11 percent reported having visited a government official to talk about fees.