Editor’s note: The following is a guest post by Kyle Caldwell, chief executive of the Michigan Nonprofit Association.
We often talk about how states can and should be business friendly. We need for-profit enterprise to create jobs, expand our tax base, and deliver goods and services at a competitive price. To support this work, business calls for an open and competitive marketplace, fair tax policy that encourages growth, and regulatory policies that punish bad actors but provide flexibility for innovation. In short, they require a business-friendly environment.
But what about nonprofits?
We are small businesses that work for a mission rather than for a profit. We employ people, compete to deliver a good product, and pay taxes. Why shouldn’t nonprofits ask for the same treatment as for-profit businesses?
What would we ask for? How would we track progress? Where would we communicate our assessment?
I propose a nonprofit-friendly state report card. Imagine a public report card that we would use to track how our state’s regulatory, tax, consultation, and data-collection policies all line up to make for a climate in which nonprofits can thrive.
Here’s what I’d put on the report card:
Tax Policy
• Does tax policy preserve the charitable status of nonprofits?
• Does it promote nonprofit growth and reward charitable giving?
• Does it apply a consistent standard for determining which nonprofit operations are tax-exempt and which are not?
• Does the state ban payments in lieu of taxes that threaten charitable assets?
Public-Private Partnerships
• Do state and local governments contract fairly with nonprofits to provide services?
• Are the services paid for on time and at a rate that reflects the full costs?
• Are contracts and grants honored to the spirit and letter of intent?
• Are there easily accessible sources of data analyzing the scope, depth, and effectiveness of government-nonprofit partnerships?
Advocacy
• Do policy makers clearly understand and embrace the advocacy role of nonprofits?
• Do they involve nonprofits in decision making?
• Does the state government have permanent structures to ensure nonprofits are engaged with lawmakers and regulators?
• Do policy makers and nonprofits work together to ensure the healthy involvement of citizens in the decision-making process?
These are the policies I believe nonprofits need so they can thrive—and help their states thrive. Would you add any? How well would your state do on this report card? And what else would it take to make yours the best state for nonprofits to operate in?
Tell us what’s going on in your state. Contact Suzanne Perry to share your story.