The Financial Implications Of The Nonprofit Sector

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Over the past few years, there have been several developments regarding the financial implications of the nonprofit sector. Based on Kucinich (2012), one of those implications was a proposal in the 2012 presidential election by Republican candidate Mitt Romney that would have either eliminated or posed serious limitations to the charitable tax-deduction, and President Obama responded to the policy idea with, “if you eliminated charitable deductions, that means every hospital and university and not-for-profit agency across the country would suddenly find themselves on the verge of collapse. So that’s not a realistic option” (p. 1). Why exactly is there a political push to eliminate the charitable tax-deduction? Don’t nonprofits provide…show more content…
If nonprofits were producing substantial outcomes, then eliminating the tax deduction would not be “on the table.” Nonprofit executive compensation would likely not be placed under a “magnifying lens” with intense scrutiny. There are clear examples of “excessive” nonprofit executive compensation, but this perception that nonprofit executives are excessively compensated lies in public perception. Funk & Alexander (2015) cover the compensation of Franklin Graham at the Billy Graham Evangelistic Association and Samaritan’s Purse, and they state that his “2013 compensation from Samaritan’s Purse alone made him the highest-paid CEO of any international relief agency based in the United States” (p. 1). The authors note that three other family members are on the board of directors, that experts like a former CEO of Charity Navigator believe Graham’s compensation is “excessive,” and that the board and a compensation committee decide compensation packages for both organizations. It is highly likely that the Internal Revenue Service would see his compensation packages as excessive, but they would question the conflict of interest policies at these organizations too. Why should one person be able to have two “six-figure” salaried positions at two separate “faith-based” organizations? The fact that both are faith-based organizations with members of Graham’s family on the board
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