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Nonprofits as Policy Solutions to the Burden of Government

Book Description

This book addresses a specific subset of nonprofits that are chartered with a single mission: decrease the burden of government. Designing and engaging nonprofits to lessen the burden of government requires a specific description and acknowledgement of the burden to be lessened, and these may include the provision of infrastructure, the relief of debt, or the provision of general public services that are not motivated by charity. It also requires the assignment of specific operating powers to the nonprofit including the power of eminent domain. This book explores these and other related topics including the avoidance of resource dependence on government when attempting to reduce its burden.

The book is addressed to the policy makers and rule makers who design policies that affect the ability of the nonprofit to effectively lessen the burden of government. It is also addressed to public administrators in search of innovative ways of implementing these policies consistent with the laws, and to the creative nonprofit managers who are charged with carrying out the mission often in collaboration with the government or other entities. To the advanced student in all related fields, the author offers not only material for discussion, but enables discovery of what is possible by giving key examples of organizations meeting the terms and objective of lessening a significant burden of government.

Table of Contents

  1. Cover
  2. Title
  3. Copyright
  4. Acknowledgements
  5. Contents
  6. Preface
  7. Chapter 1 – Purpose, Policy, Theory, Definitions and Context
    1. Purpose
    2. The Burden of Government
    3. Perspective, Collaboration, Competence
    4. Traditional, Nontraditional, Burden
    5. Organizational Design
    6. Prices, Profits and Nonprofit Motives
    7. The Context
    8. Dimension of the Problem in the United States
    9. Why the Nonprofit Option
    10. Toward a Supporting Theory
    11. Bibliography
  8. Chapter 2 – Designing, Empowering and Engaging the Nonprofit to Lessen the Burden of Government
    1. The National Trust for Historic Preservation
    2. Crafting the Intent to Lessen the Burden of Government
    3. Federal and State Designation of an Eligible Burden
    4. Classification of Nonprofits as Doers and Facilitators
    5. The Planks on Which to Design a Nonprofit to Reduce the Burden of Government
    6. Plank 1: Money
    7. Plank 2: Marketing and Persuading
    8. Plank 3: Membership and Public
    9. Plank 4: Management
    10. Plank 5: The Mission
    11. Plank 6: Collaboration and Cooperation
    12. Plank 7: Tax Exemption
    13. Plank 8: Powers to Act
    14. Plank 9: Accountability
    15. Plank 10: Legitimacy
    16. Summary and Preview
    17. Bibliography
  9. Chapter 3 – Empowering the Nonprofit to Lessen the Burden of Government
    1. The Creation of the Corporation
    2. Incorporation: Process, Purpose, Powers
    3. The Powers of the Nonprofit Corporation
    4. Prohibitions
    5. Financial Advantages and Disadvantages of Exemption
    6. Some Factors that Threaten the Loss of Tax-Exampt Status Under 501(c)(3)
    7. Summary and Preview
    8. Bibliography
  10. Chapter 4 – Nonprofits as Doers in Reducing the Burden of Government
    1. The Doers: Distinguishing Examples
    2. Categorizing 501(c)(3) Doers
    3. Doers Depending Mostly on Business Income
    4. Subsidiaries, Affiliates, and Holding Companies as Internal Facilitators
    5. Other Categories of Doers
    6. A General Comparison of Doers
    7. Lessening the Burden of Government: The Benefits and Justification of Tax Exemption
    8. Summary and Preview
  11. Chapter 5 – Nonprofit as Financiers and Facilitators in Reducing the Burden of Government
    1. Two Government-Created Examples: To Be Close But Not Controlled
    2. The Nonprofit Financers
    3. The Rules of Foundation Operation
    4. The Key Characteristics of the Facilitator
    5. Hybrids: Private Operating Foundations
    6. Summary and Preview
  12. Chapter 6 – Government Created Nonprofits to Lessen the Burden of Government
    1. Nonprofits Created by Governments to Lessen Their Own Burdens
    2. Qualifications of a Government-Created 501(c)(3)
    3. Public Authorities as Government-Created Nonprofits to Relieve Government Burden
    4. Ports and Powers
    5. Are Authorities Doers or Financers?
    6. Summary and Preview
    7. Bibliography
  13. Chapter 7 – Decision-Making and Governance Structure in Lessening the Burden of Government
    1. The Board
    2. Interlocking Directorates
    3. Conflict of Interest, Independence, and Board Members
    4. Dealing With Possible Conflicts of Interest
    5. Dealing With Non-Independence
    6. Standards at the Root of All Trustee Actions
    7. Excessive Economic Transactions and Due Diligence
    8. Duty of Organizations to Trustees and Their Rights
    9. Liability of Trustees
    10. Annual Disclosures of Involvement of Current and Past Trustees and Senior Management
    11. Summary and Preview
    12. Bibliography
  14. Chapter 8 – Financing the Burden through Contributions
    1. A General Picture of Contributions and the Sector
    2. Requirements of a Tax-Deductible Gift
    3. Problems of Accepting Gifts Subject to Debt
    4. Summary, Responsibility, and Preview
    5. Bibliography
  15. Chapter 9 – Financing the Burden through Business Earnings
    1. Business Activity as a Source of Money
    2. Definition of Related and Unrelated Nonprofit Businesses
    3. Excess Profits: A Distinction Between Related and Unrelated Income
    4. Integration of Business Operations Into a Conglomerate Structure
    5. The Organization of an Unrelated Business
    6. Tax Treatment of Different Types of Business Income
    7. Key Points on Entrepreneurial Income in Nonprofits
    8. Summary and Preview
  16. Chapter 10 – Financing the Burden through Debt
    1. The Need for a Charter and Other Documentary Powers
    2. Terms of Debt
    3. Non-Deductibility and Taxability of Interest
    4. Debt as Credit Facility
    5. Covenants, Default, Bankruptcy
    6. Strategies for Treating a Loan Due
    7. Borrowing from the Securities Market
    8. Borrowing from Nonfinancial Sources
    9. Preparing to Borrow
    10. Debt Limits and the Nonprofit
    11. Subsidized Infrastructure Debt Available to Nonprofits
    12. Long-Term Debt tor Infrastructure Used by the Nonprofit
    13. Long-Term Debt Issued by Nonprofits on Behalf of the Government for Public Purpose Infrastructure Called 63-20 Debt
    14. Issuing of Debt (Bonds) by an Authority
    15. Debt Through Tax Increment Financing
    16. Long-Term Lease Arrangements of Property
    17. Summary and Preview
    18. Bibliography
  17. Chapter 11 – Establishing Cash Flows for Sustainability
    1. The Trust
    2. Endowments: Perpetuating a Gift
    3. Specific Long-Term Assets In an Endowment: Trusts
    4. Specific Long-Term Assets for Endowments: Life Insurance Policies
    5. Gifts of Iras, Gift Annuities, and Other Such Contracts
    6. The Power of a Will
    7. Summary and Preview
    8. Bibliography
  18. Chapter 12 – Corruption and Control: Protecting the Assets for Lessening the Burden of Government
    1. Corruption
    2. Types and Effects of Corruption in Nonprofit Organizations
    3. Sources and Opportunities for Corruption
    4. Managing the Risks of Corruption and Fraud
    5. Controls: An Accounting Approach
    6. Controls: A Transaction Approach
    7. Controls: A Flow Approach
    8. Controls: Organizational Lines of Defense
    9. A Comprehensive Approach to Corruption
    10. The Discovery of Corruption
    11. The Protection of Sources and Records
    12. Insurance Against Corruption
    13. Classification and Treatment of Certain Costs
    14. A Tool of Cost Control, Avoidance of Cost Overruns, and Detection of the Risk of Inefficiency or Fraud
    15. Summary and Preview
    16. Bibliography
  19. Chapter 13 – Discussion and Dialogue
    1. Levels of Lessening the Burden of Government
    2. Types of Nonprofits Lessening the Burden of Government
    3. The Authority to Perform
    4. The Nature of the Promise to Lessen the Burden of Government
    5. To Exercise Authority the Nonprofit Needs Powers
    6. The Power to Finance and the Motive for Action
    7. Governance Structure
    8. Accountability and Disclosures
    9. Types and Range of Collaboration
    10. The Conflict Between Collaboration and Control
    11. Sources of Legitimacy
    12. Growth and Competition
    13. Debt and Off-Balance Sheet Financing
    14. Who Subsidizes Whom
    15. Tax Exemption as Price and Incentive
    16. The Rationale for This Direction
  20. Index