Scott Hodges Pens Another Shameful Attack on Nonprofits

Scott Hodge is a tax and fiscal policy fellow at Arnold Ventures and president emeritus of the Tax Foundation.

The Congressional Budget Office’s latest economic report offers a bleak forecast of the U.S. government’s fiscal health. The study projects deficits surpassing $2 trillion for years to come, and the widening gap between federal spending and tax revenue means that the national debt will hit levels not seen even in wartime.

The menu of solutions to close this gap is just as depressing: slash benefits and services or raise taxes. But one option could generate substantial revenue while making the tax system fairer: ending the tax exemption for America’s massive nonprofit business sector [which was first established by an Act of Congress in 1894*].

Many "charities" have become big businesses. While numerous benevolent charities do wonderful work, the industry is dominated by some of the top companies in America operating largely free from the tax obligations that burden their for-profit competitors. The commercial revenue generated by these nonprofits totaled $2.8 trillion in 2023, nearly three times the amount nonprofits receive from donations and government grants.

To read Hodges' unfounded attack on the nonprofit industry in its entirety, please select this link.

^{*This remark was inserted by OSAP to assist readers and members of how long ago the U.S. government recognized the importance and value nonprofits often provide where government too frequently fails to serve communities' needs.}