How Do We Value Nonprofits?

What links these 10 nonprofits?

• YMCA of the USA
• The Salvation Army
• United Way of America
• American Red Cross
• Goodwill Industries International
• Catholic Charities
• Habitat for Humanity
• American Cancer Society
• The Arc of the United States
• Boys & Girls Clubs of America

According to “The Cone Nonprofit Power Brand 100” 2009 report, they were, then, (and may still be now) the top 10 most valuable nonprofits brands in this country, with a value ranging from $6.4 billion for the YMCA of the USA to a low of $1.2 billion for Boys & Girls Clubs of America.  (I wouldn’t give money to most of these organizations, not because I don’t appreciate their missions, but because I don’t like how the organizations are run.  Brand value doesn’t necessarily correlate to well run operations.)

With the value of their brand determined, nonprofits know how to bargain with for-profit businesses looking to earn a little extra money with a nice cause-related marketing deal.  In other words, for-profit organizations value these nonprofits because they can make money off of the nonprofits.

Increasingly, I wonder just how our society values nonprofits—if it does at all.  More and more, it seems that our society values nonprofits for the money they can contribute to others’ coffers and not for their contributions of services, enhanced quality of life, care, and nurturing they give individuals and communities.

Take, for example, the growing push to collect PILOTS (Payments in Lieu of Taxes) from nonprofits by jurisdictions of all shapes and sizes all around the country.  Or jurisdictions that are taxing hospitals and colleges/universities,  based on the number of their dorm and patient beds, respectively, or a jurisdiction that imposed a 15% parking tax on every organization (Scranton, Pennsylvania) only to then say it will block zoning applications from nonprofits because it sees those nonprofits removing properties from the tax rolls.  Or Pennsylvania that has set aside the Act 55 test for establishing an organization as public charity and replaced it with a 1985 judicially established test.  Naturally, the latter test is harder to meet, which will fewer organizations qualifying as tax-exempt.

Nonprofits around the country that were ignored by their city and county councils, unable to get a dime from them, are now suddenly hot commodities because they can give dimes (times hundreds) to their struggling governments.  When the coffers are nearing empty and the cupboards growing leaner, suddenly nonprofits becomes important to their communities.  The same organizations that were providing vital services to populations that governments were unwilling, or unable to provide (like food, shelter, for example).

While I have gone on record supporting the notion that nonprofits should be responsible for the share of city services which they use, I have also gone on record saying that nonprofits are not the solution to others’ failed business planning.  Governments must find other solutions to their own financial crisis.

The brand of the “nonprofit sector” should be consistently, and highly, valued for what they are and not be used as a funding stream for for-profits and governments.