Does anybody else out there give money to pledge drives for public broadcasters?
I’m frequently subjected to Minnesota Public Radio pledge drives. As of today, I am predicting that within two months MPR will re-organize as a fully private operation or become the target of legislative changes to disrupt their public funding.
Here’s why.
For those of you who don’t know, a lot of the national programming to which you listen via your NPR affiliate is out of MN. Besides just the MPR stuff, PRI, a syndicator of original programming for NPR stations, is also HQed in MN. Because of this, I bought into the fact that the MPR mothership needed to coordinate lots of pledge drives to cover the costs of putting on these shows. I understood the rationale behind asking the listening public to pony up some kessev.
Then, about one year ago, MPR went out and bought a radio station. This wasn’t any little acquisition. It wasn’t a purchase of a local broadcaster to repeat the MPR signal in a rural area. Instead, they bought a radio station known for its alt-rock, funky approach. MPR put a lot of marketing behind it this station, including a huge billboard on the highway. I found this interesting, considering that MPR still was asking the public for money right after the acquisition went through. What kind of taxpayer-supported operation has the right to go out and make a splashy acquisition and then continue to ask the public and government for more money?
Through a newspaper editorial yesterday, the listening public was made aware that the top executive at MPR makes $551,144 in annual compensation. That’s just the top exec. The editorial was in support of a proposed law forcing all MN nonprofits that receive state funding to disclose the top 3 amounts of exec pay if the exec pay is greater than the pay of the Governor.
Now, I can foresee MPR people fight back against the scrutiny surrounding this law by pulling out comparable salaries to other media/radio execs. The problem with that argument (again, which hasn’t happened yet) is that those other execs work for public companies with shareholders that get to vote on exec pay and on who oversees the exec pay. This is why I absolutely support the law. Even though I am addicted to MPR/NPR, I don’t like the fact that my tax dollars are getting funneled to media operations that don’t disclose their exec pay, that make acquisitions and that ask for individual contributions from the very listening public that makes less than the nonprofit execs and don’t know where their individual contributions PLUS tax contributions are going.
“This American Life” is brilliant.
Non-profits which are profitable for employees
It’s interesting you brought this up, because I got into a similar discussion at work a few days ago. A co-worker maintained that 501(c)(3) status for most organizations (religions included) was a misnomer. The leaders of these organizations frequently make six-figure salaries, and the non-profit is very profitable… for them.
But a non-profit status really deals with whether or not the corporation is allowed to make a profit, and not whether or how much the employees make. I think that a few laws regulating them would be a very good thing:
That’s my two cents. Non-profit abuse is huge business in the USA, within both secular and religious organizations.
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Matthew P. Barnson
Nonprofit doesn’t mean ‘no profit’
Matt,
As the Treasurer for a 501(c)3 nonprofit made of members from across the country, I can write you that the nonprofit designation has nothing to do with whether a corporation does or does not earn a financial profit. The nonprofit designation menas that there are no shareholders who receive dividends/stock and that the corporation is exempt from certain taxes, such as income tax and state sales tax.
Forcing all 501s to disclose their budget and expenses isn’t likely because these companies are, in a sense, private companies, even though they receive public funding in the form of tax avoidance. There are situations in which 501s must get an audit and file an annual audit with the state. This occurs when the 501 operates as a charitable organization and professionally raises money. That is one way in which a budget and expenses is exposed.
Direct lobbying is not often a factor because it requires the nonprofit to enter a murky set of laws. Also, many nonprofits are community-based with members specifically against taking any political action. I could be wrong, but I guess that more than half the nonprofits in the U.S. do not cross the legal threshhold of having to file any lobby sheets on their tax return. This could be because lots of them belong to industry chains that lobby on their behalf, of course.
Semantics
Right. If we want to get more pedantic, it could be said that the nonprofit designation only indicates that an advanced ruling has been made. The advance ruling indicates that an organization has met all requirements according to statutes set forth in the Internal Revenue Code for classification as a non-profit corporation, and may or may not be deemed a charitable organization or foundation with federal tax exempt status under various provision of Section 501(c)(3) (or sometimes other nearby provisions) of the Internal Revenue Code.
It’s made my life exciting in volunteer work, because if you say the wrong thing (politically) without appropriate disclaimers, that status can be revoked if somebody complains. Keeps one on one’s toes.
—
Matthew P. Barnson
Case In Point
I think it was right before the last Presidential election when the NAACP President was giving a speech and gave an endorsement! Can you imagine if they got stripped of 501 status and had to pay all those taxes in arrears?…