After Maine Gov. Paul LePage described nonprofits as “takers, not givers” and suggested they should lose their tax exemption, the Maine Association of Nonprofits launched a strong defense, saying the statement “unfairly maligns” the nonprofit sector.
The comment may have been an aside from a prominent politician basking in the glow of a successful reelection campaign, but for nonprofits in Maine, it felt more like a broadside.
Speaking to Portland-based WSCH-TV, newly reelected Gov. Paul LePage (R) outlined some of his plans for the next four years, including a push to end state income taxes. “We need to rethink income tax totally. I think there’s room to eliminate personal income tax. We have to do that if we have any expectations of being able to compete with the big states,” he said.
To help cover the revenue shortfall, LePage suggested that nonprofits should pay a tax or a fee of some kind. “They don’t pay their share,” he said. “They are takers, not givers.”
That line did not sit well with the Maine Association of Nonprofits.
Defending Nonprofits’ Value
In a blog post on Wednesday, MANP Executive Director Scott Schnapp shot back at the suggestion that nonprofits are “takers.”
“This kind of statement is misleading and feeds a public perception that is just not based on the facts,” he wrote. “It also unfairly maligns a sector comprised of highly valued organizations such as veterans groups, domestic violence prevention programs, churches, museums and theaters, hospitals, economic development organizations, educational institutions, land trusts, social service agencies, environmental organizations, and many others that not only play a significant economic role in Maine, but also enhance our quality of life.”
Schnapp’s stance is supported by ASAE research. Associations Matter: Associations by the Numbers [PDF], a 2012 study released by the ASAE Foundation and the Power of A campaign, reported that membership organizations employed 1.2 million workers in 2009 and created $47 billion in payrolls in 2010. In 2009, nonprofit organizations contributed $1.4 trillion in revenue to the U.S. economy during the period.
In Maine alone, Schnapp noted, nonprofits employ more than 84,000 people, pay more than $3.6 billion in wages, and contribute $10 billion to Maine’s economy.
And while they receive tax exemptions that businesses don’t, nonprofits do pay sales taxes, and, through their employees’ personal taxes, “most of the income passing through the nonprofit sector is and has already been taxed.”
“Our society has granted nonprofits the status as tax-exempt entities, and this exemption from taxation is good economic and social policy,” Schnapp added.