Theft at the Public Till
can be felt but not seen. Power remains strong when it remains in the dark; exposed to the sunlight it begins to evaporate.” Samuel P. Huntington The tax-exempt thefts also exist in places we never would suspect - our charities. America’s nonprofit economy today has become a huge, virtu- ally unregulated industry. Within it, almost anything and anybody qual- ifies for tax-exempt status: Auto racing promoters. Collection agencies. Country clubs. Criminals. A half-billion-dollar defense research corpora- tion. Investment houses. Mail-order colleges. A polo museum. Retail stores. Professional surfers. An association of Druids. Foreign real estate investors. Space explorers. Even a chili appreciation society. The National Football League, that bastion of free enterprise and million-dollar quarterbacks, doesn’t look like a nonprofit organization. Then again, it doesn’t act like one, either. The NFL spends less than 1 per- cent of its $35 million budget on charitable activities, pays its commissioner $1.5 million a year, and spends another $1.5 million to lease seven floors of a Park Avenue office tower. Or take the Motion Picture Academy of Arts and Sciences, which spent $6 million to put on the dazzling Oscars show. Many nonprofits operate just like for-profit businesses. They make huge profits, pay handsome salaries, build office towers, invest billions of dollars in stocks and bonds, employ lobbyists, and use political action commit- tees to influence legislation. And increasingly they compete with taxpay- ing businesses. Executives at some large nonprofit businesses make more than $1 million a year. Of twenty-five thousand salaries of executives of big nonprofit organizations examined in a study by the Philadelphia Inquirer, nearly half were at least $100,000 a year. Many also received such perks as free housing, maid service, luxury cars and chauffeurs, and no-interest loans. Nonprofit hospitals, which originally were exempted from taxes because of their charity care, now devote an average of 6 percent of expenditures to caring for the poor. Meanwhile, more than $1 billion in hospital profits have been shifted to commercial spinoffs-hotels, restaurants, health spas, laun- dries, marinas, parking garages. Private, nonprofit colleges and universities have more than doubled their tuition in the last decade, even though their income from investments was doubling and tripling in the 1980s. Some
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