Nonprofits

Schools for Fair Funding Inc. has received more than $3.2 million in taxpayer dollars to successfully pursue increased public school funding through the Kansas Supreme Court. Since then the nonprofit organization itself has been sued by the Topeka Capital-Journal newspaper under the state's open records statute.

The paper wants to know how tax dollars were spent and, therefore, filed suit in July saying that Schools for Fair Funding Inc. was merely a front for the school districts that funded their successful lawsuit against the state. For that effort the paper has gained access to some but not all of the organization's financial records. Manhattan's school district was one of 20 contributing tax dollars to the organization.

In a somewhat related matter, an Episcopal Church in Pasadena, California is deciding whether to fight an IRS summons for church documents. The church is under investigation for allegedly making too much politics from the pulpit leading up to the November 2004 presidential election. At stake are their tax-exempt status and fines.

In Manhattan there are about 450 tax-exempt organizations valued at $750 million. They range from the K-State Foundation which funnels contributions to the university to fraternities, churches, the Manhattan Country Club and Chamber of Commerce.

So what's the point of all this?

These organizations contribute nothing to the revenue side of government, hence the term "tax-exempt." Yet they require police and fire protection, streets, water and all the rest. Their non-profit tax status exists solely because we understand and appreciate the need for their considerable contributions to our civil society.

With that said and unlike for-profit organizations, there is, however, a higher standard for nonprofits to be operationally transparent when it comes to public funding. For example, if tax dollars are in the mix, citizens deserve to know how that money is spent. None of us want legitimate nonprofit tax status compromised by the few who choose to make their own rules or by others who use the status for unwise purposes.

First published in the Manhattan Free Press, September 27, 2006.