Category Archives: Public Policy and Governance

Defining Nonprofit

When I began this blog–nearly twenty years ago!–I would occasionally run out of likely subjects, and ask my husband to suggest something. That problem has vanished; today, the challenge is to choose which aspect of a tumultuous time to consider. I share this small dilemma because today’s post is centered on a problem that probably doesn’t rank high in the universe of challenges we face, but still deserves attention–and ultimately, a remedy.

That problem is the definition of nonprofit.

Back before I decamped from legal practice to join academia, I was aware that a good lawyer could often turn what was really  a for-profit endeavor into a nonprofit organization. Assuming an arguable existence of a public good, it was possible to create a corporation that didn’t have a positive bottom line. You would simply transfer amounts that would otherwise be taxable profits into overhead costs, mainly salaries and perks for those in charge, and avoid those pesky taxes.

That clever lawyering has given us (among other things) “nonprofit” hospitals paying executive salaries of over a million dollars a year (Hospital CEO’s are paid an average of I.3 million according to a recent study from Rice University.)

The effects of that blurry line between for-profit and nonprofit was the subject of a recent opinion piece in the Washington Post that called it a 2.8 trillion dollar tax shelter. As the author noted, a growing number of supposed “charities” have become big businesses.

Granted, many charities are authentic and truly benevolent, but it is also true that the nonprofit sector is dominated by  companies that are exempt from the tax obligations that burden their virtually indistinguishable for-profit competitors. According to the linked essay, “the commercial revenue generated by these nonprofits totaled $2.8 trillion in 2023, nearly three times the amount nonprofits receive from donations and government grants.”

In 1909, Congress exempted charitable organizations from the corporate income tax, intending to protect “small fraternal societies providing insurance to widows and tending to the poor.” But the exemption also applied to mutual lending and insurance companies, which opened the door to exempting other “businesslike” companies. As a result, the “past century of special-interest lobbying has transformed a modest carve-out into a sprawling network of billion-dollar enterprises that look, act and compete like businesses — while enjoying privileged tax status.”

Consider nonprofit hospitals and health care plans: In 2023, they generated $1.3 trillion in revenue and nearly $45 billion in tax-free profits. The largest, Kaiser Foundation Health Plan and its affiliated hospitals, recently announced over $127 billion in revenue in 2025 — more than many of America’s largest for-profit companies — yet paid no corporate income tax on more than $9.3 billion in net income. The justification? In exchange for their tax exemption, nonprofit hospitals are supposed to provide charity care for the poor. However, studies consistently find that tax-exempt hospitals don’t provide more free or discounted care to low-income patients than their taxpaying competitors.

Or take AARP, an advocacy group for older Americans, which earned $9.9 billion in tax-free royalties in 2024 by licensing the use of its name to for-profit companies. AARP signed a sponsorship deal last year with the Washington Nationals to place its logo on players’ uniforms. Hardly the action of your neighborhood nonprofit.

Other organizations that fall into that category include the PGA–which pays no income taxes on the hundreds of millions it makes from television or tournament sponsorships, and the U.S. Tennis Association, the U.S. Polo Association, the WTA Tour, the Breeder’s Cup and the National Hot Rod Association. The list also includes profitable award shows like the Academy of Motion Picture Arts and Sciences Oscars ($147 million tax-free in 2023), and the Grammys (nearly $93 million from TV, sponsorships and ticket sales in 2024.)

Then there’s the credit union industry, which was originally exempted to serve working-class people of “small means.”  They are now indistinguishable from commercial banks–in fact, over the past decade, they’ve purchased nearly 100 commercial banks, converting taxpaying businesses into tax-exempt ones.

We can exempt genuinely charitable endeavors like food banks, homeless shelters and others serving the needy from taxation, but it is long past time to distinguish between truly charitable endeavors and what the essay calls “commercial enterprises wearing nonprofit clothing. If it walks and quacks like a business, tax it like one.”

There is serious money at stake. The essay points out that taxing the net business income of these faux nonprofits at the standard 21 percent corporate rate would raise $51 billion annually — and would do so without raising rates on anyone  currently being taxed.

It’s past time to treat these pretenders like the for-profit businesses they really are. Put this reform on your list of things we must do when we emerge from our current nightmare.

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Rewriting History

I went through grade school, high school, college and law school without ever hearing about the Tulsa riots or the Trail of Tears, among other negative episodes. My experience was not unique. It is only in the last couple of decades that a number of previously suppressed episodes showing the underside of our nation’s history have finally emerged into the public consciousness.

It isn’t a coincidence that Americans are only recently hearing about historical events involving women and people of color. The full history of women and Black and Brown Americans is finally emerging thanks to the civil rights movement and the women’s movement–movements that fostered the equal rights and recognition that MAGA despises as “woke.”

As the culture has changed, the backlash has become more ferocious. The Trump administration is trying to root out DEI–characterizing efforts to combat historic exclusion as “anti-White,” and mounting assaults on historic displays at museums and national parks. Meanwhile, Red states like Florida are re-writing curricula to ensure that their students will graduate with the same ignorance of history that I experienced.

The Washington Post recently reported on one aspect of the administration’s efforts.  An internal government database disclosed “the vast scope of the Trump administration’s ongoing effort to revise or remove information on African American history, climate change and other topics at hundreds of national park sites.” Park employees are under orders to eliminate displays that might “disparage” America, and a growing number of those displays are being “evaluated” to ensure that they are properly positive.

At the Emmett Till and Mamie Till-Mobley National Monument in Mississippi, the Trump administration is “reviewing” the exhibit on the teen’s brutal 1955 killing by White men— though the park’s staff warned that its removal would leave the site “completely devoid of interpretation.”

At the Harpers Ferry National Historical Park in West Virginia, the staff has asked federal officials “to decide whether a document that describes an abolitionist’s murder by a mob might “denigrate the murderers.'”

These displays and materials are among several hundred that managers have flagged at hundreds of national park locations since last summer in response to administration orders to scrub sites of “partisan ideology,” descriptions that “disparage” Americans, or materials that stray from a focus on the nation’s “beauty, abundance, or grandeur.” The submissions were compiled in an internal government database and reviewed by The Washington Post, which confirmed its authenticity with current federal employees.

The submissions are a troubling indication of the  scope of Trump’s effort to recast the history of the country–and to revise how–if at all– our national parks address such subjects as America’s history of racism and sexism, LGBTQ+ rights, climate change, and pollution.

The database became public when a group that described itself as “civil servants on the front lines” posted it to two public websites, explaining that it did so to show Americans how the administration is “trying to use your public lands to erase history and undermine science.”

You will not be surprised to learn that the Department failed to respond to reporters’ questions about the status of the reviews, the process for evaluation, or about the specific examples in the database.

One obvious effect of the administration’s new rules has been confusion.

Staff members identified a brochure at Cape Hatteras National Seashore, in North Carolina, for “possible disparaging of a prominent American” because it mentions that aviator and onetime Smithsonian Institution secretary Samuel Langley failed to achieve flight. A park staffer at Glen Canyon National Recreation Area in Arizona asks for clarification about whether displays on California condors’ return from the brink of extinction disparage hunters “or tell a success ??”

Others wanted to know whether books or displays about slavery and the black experience, or about Lincoln’s assassination–events that may or may not “disparage” historical figures, but that do cover “dark periods in American history”– are acceptable. What about displays that acknowledge Jefferson’s children with Sally Hemings?

As the report notes, many–if not most– National Park Service employees gravitated toward their work because they were passionate about telling true stories about history and science. A former superintendent of Shenandoah National Park was quoted as saying “It’s a real affront to the values that rangers have.”

Among the MAGA revisionists who have applauded Trump’s effort to redact inconvenient history is Indiana’s embarrassing White Christian nationalist Senator Jim Banks, who has written to officials at Interior and the Park Service over his concerns about “woke” projects that “cast America’s founding and history in a negative light.”

Actually, it’s people like Trump and Banks–people who want to rewrite history– who cast America in a negative light.

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Unanticipated Consequences

Official stupidity can do a lot of harm, as the daily examples from the Trump administration have made all too clear. (Official cowardice–can we spell Congressional Republicans?–doesn’t help.)

Trump’s “gut decision” to wage war on Iran, and the warrior cosplay of Pete Hegseth (who should never have been allowed near the grown-up’s table, let alone the Defense Department) will undoubtedly have multiple horrific consequences. We are already seeing some of them–along with obvious evidence that the “Peace President” consulted no intelligence personnel and engaged in nothing so pedestrian as planning before authorizing an assault that will destabilize the Middle East and quite possibly the world.

Just classify it as another  administration “whoops”–like the raging re-emergence of measles, and the “accidental” deaths of peaceful protestors….

But as Paul Krugman has reminded us, sometimes stupidity inadvertently teaches people a truth they’ve been trying to ignore.

It’s very obvious that Trump gave no thought at all about the huge importance of the Strait of Hormuz to America’s continued reliance on his beloved fossil fuels. And in just a couple of weeks, it has turned out that Trump’s war of choice has made a strong case for renewable energy.  We are suddenly being reminded that the wind and the sun don’t require transit through the Strait of Hormuz.

As Krugman notes, the policy folks who have been beating the drums for solar and wind power generally argue for renewable energy based upon its environmental benefits, and its role in moderating the damage caused by fossil fuels that have a major  role in  climate change and air pollution, the latter of which imposes significant damage on human health and reduces life expectancy. Trump’s “wag the dog” war has pointed to another reason we need to reduce dependence on fossil fuels: “In a dangerous world, it’s infinitely safer to rely on the sun and the wind than to depend on fossil fuels that must be transported long distances, from nations that are untrustworthy, often exploitative and located in regions that frequently devolve into war zones.”

Ya think?

Krugman tells us that approximately 20 percent of the world’s oil supply comes through the Strait of Hormuz. It isn’t just oil, either– the Strait is a “crucial route for shipment of liquefied natural gas and fertilizer.” When, as now, that passage is effectively closed, there are no good alternatives.

It is still very early in this unwise conflict, but consumers are already seeing rising gas prices. Krugman expresses surprise that crude oil prices haven’t increased even more steeply, but he is also surprised at how quickly retail gasoline prices have surged.

It isn’t only Americans who are feeling the effects. Not that Trump gives a rats patoot about our longtime allies, but Europe is being affected as well. As Krugman notes, and environmentalists know, most of Europe is far ahead of the US in renewable energy capacity, but it remains dependent on imported gas for a significant portion of its heating and electricity generation needs. Trump’s ill-considered war is hurting their economies. Meanwhile, Krugman tells us that Asian nations, “scrambling to replace their LNG imports from the Middle East, are driving up prices worldwide.”

Now, Trump hates renewable energy, especially wind power. He has tried to destroy hundreds of millions of dollars’ worth of investment in offshore wind turbines and sought to block land-based projects as well, although in some cases he has been stopped by the courts. He has also put pressure on other countries to go back to fossil fuels. On Tuesday he lashed out at the UK, calling the British “very uncooperative” and attacking them for having “windmills all over the place that are ruining the country.” But Britain would be in much worse shape right now if wind power weren’t supplying about 30 percent of its electricity.

And as Alan Beattie recently wrote in the Financial Times, U.S. stupidity has once again gifted China. “From the US you get forced into trade deals promising a future of burning fossil fuels whose price is subject to wildly destructive US adventurism. From China you get reliably cheap EVs and green tech to generate renewables.”

As Krugman concludes, Trump’s ill-conceived war against Iran ends up making a strong case for nations to seek energy independence. For many of those nations, that will means wind and solar and nuclear. The rising gas prices in the U.S. also bring that lesson home–justifying my devotion to my Prius.

Donald Trump, hero of renewable energy? Talk about unanticipated consequences…

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When Idiots Wage War…

In how many ways is Trump’s “war of whim” harming the United States? Let us count the ways…

Or perhaps we should just take note of the fact that we have deeply unserious, profoundly ignorant people in positions that require deep reservoirs of knowledge and expertise. Instead, we have an assortment of pompous pretenders and religious crackpots who have launched a war without even agreeing on its purpose.

Newsweek, among others, has reported on military leaders who have been telling troops that the Iran war has been launched as part of “God’s divine plan”– that “Trump and Jesus” are executing a divine purpose. The Military Religious Freedom Foundation has received some 200 complaints from roughly 50 military installations about U.S. commanders expressly linking Christianity to the “biblically sanctioned” war in Iran.

If those pronouncements–suggesting a throwback to the Crusades–weren’t horrifying enough, a post by Rick Wilson at Lincoln Square details the consequences for American readiness we can expect when attacks are launched by people who lack any detailed understanding of military strategy, let alone of the geopolitical context in which they are operating. As he writes, we are getting “a masterclass in what happens when a man who thinks black and white World War II movies in his head from the 1950s are the reality of modern combat between technologically advanced nations.”

Wilson picks apart Trump’s recent assertion that America has a “virtually unlimited supply” of “medium and upper-medium grade munitions.”

That’s not how our production and inventory of ammunition, guided weapons, and everything that leaves the barrel or the rail works. That’s not how industrial production works. That’s not how physics works. That’s not, as the kids say, how any of this works.

The United States does not have an “unlimited” supply of anything except debt, MAGA bots, and Trump mentions in the Epstein files.

As Wilson points out–and as Trump clearly doesn’t understand–every missile, every bomb, every 155mm shell, every variety of munition–“requires a supply chain, materials, rare earths, propellants, explosives, electronics, trained labor, and years of planning. Wars are not fought “forever” even in Trump’s brainfog alternate reality. There’s no imaginary Indiana Jones warehouse full of missiles.”

And about that context…

Trump has also bragged that we have additional “high-grade weaponry” stored for us in “outlying countries.” The irony of noting our dependence on the alliances and overseas basing structures he has constantly threatened, insulted, or tried to extort rather obviously escapes him.

Wilson has much more detail about the current state of U.S. armaments, and the gross incompetence of withholding support from Ukraine, and I encourage you to click through and read the entire essay for those facts and figures. But the firehose of lies and boasts about readiness aren’t even the worst part of this fiasco. As Wilson writes,

Now let’s talk about the dangerous part: casually boasting about stockpile levels. There is a reason serious leaders don’t blurt out operational readiness claims on social media, as if they’re bragging about golf handicaps.

Even if the numbers were accurate (and spoiler alert: he doesn’t know, and we’re burning through long-lead-time systems like a drunken sailor on shore leave), publicly telegraphing assessments of readiness, sufficiency, and shortfalls is the kind of thing professionals handle with classified briefings, not all-caps self-congratulation.

“Wars can be fought forever.” No, they can’t.

Wars chew through materiel, money, alliances, and political capital. Ask the Romans. Ask the British Empire. Ask the Nazis (the old ones, not the new ones). Ask the Soviets in Afghanistan. Ask anyone who served from 2003-2021 in Iraq or Afghanistan.

The idea that modern, high-intensity warfare can be sustained indefinitely without economic, industrial, and human consequences is the strategic equivalent of saying your credit card has “virtually unlimited” funds because the machine hasn’t declined you yet. Those $30,000 Shahed drones getting knocked down by $3,000,000 Patriots is a bad exchange rate.

So here we are–Trump (and MAGA Jesus?) have made domestic American society meaner while dramatically undermining our international influence and authority.

If I can distill this disaster into a single lesson, a cautionary tale, it would be this: failing to distinguish between celebrity and  leadership is failure to understand how the world works, and voters who made that mistake–twice!–along with those who didn’t bother to vote, are responsible for the dire consequences of handing power to a clown car filled with people who haven’t the slightest understanding of their jobs, or the world they inhabit.

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The Costs Of Means Testing

Back in the day, when I considered myself a Republican, lots of people in the GOP described themselves (as I did) as “fiscal conservatives and social liberals.” Those days, needless to say, are long gone; today’s GOP is exactly the opposite: fiscally promiscuous and socially illiberal. 

The U-turn on social policy is hard to miss: Republicans today seem to delight in making life unbearable for trans people,  dangerous for women with problem pregnancies, and uncomfortable for every American who isn’t a straight White Christian male. But too little attention has been paid to the other part of the party’s reversal, a total abandonment of fiscal restraint.

Republicans who used to advocate for a government that funded its expenditures with tax dollars–not necessarily “balancing the budget,” but exercising responsibility when it came to “tax and spend” policies– are long gone. The GOP is now the party of extravagant tax cuts for the rich, lavish subsidies for fossil fuel companies, and billions spent on a bloated military (costs that are metastasizing thanks to Trump’s illegal and dangerous war on Iran.)

But hey–they’re “saving” money by cutting services to the folks who rely on those “wasteful” social programs like Medicaid and SNAP.

Which brings me to one of my multiple hot button issues–the insanity of America’s approach to the social safety net. In fairness, the stupidity of that approach has been, and remains, essentially bipartisan. 

As I explained in the speech I shared yesterday, American social policy differs from social policy in happier (and equally capitalist) countries. Yes, it is punitive and shortsighted–but it is also needlessly and enormously expensive. Not because we are generous to those in need–perish the thought!–but because in our zeal to make sure that no one receives a penny to which they are unentitled, we have erected a massive, costly and inefficient system to “weed out” suspected slackers–a system that just happens to enrich private enterprises.

A recent post from the “Can We Still Govern” Substack addressed those costs.

The post began by quoting the CEO of Equifax, who was celebrating passage of the budget reconciliation bill and cheering an expected windfall he described as “just massive”– new rules that will make it harder for millions of eligible Americans to receive healthcare and food benefits.

Those rules increase the frequency of eligibility redeterminations, added work requirements for Medicaid recipients, and tied  federal funding for SNAP to error rates and work requirements. The CBO has estimated that these rules will strip Medicaid coverage from over 7 million people.

But for Equifax and other government contractors, this maze of new rules means profit.

Equifax extracts over $800 million worth of contracts from the federal government and state governments each year. Much of that total is for access to its Workforce Solutions product, the Work Number, which provides data on workers’ income and employment. The Work Number’s basic business model is to purchase exclusive rights to worker data from employers and payroll providers (often without a worker’s knowledge) and then sell that data to banks, creditors, and governments for a profit.

Since the United States, unlike many of our peer nations, has opted to means-test core government programs like healthcare, the government has become a huge buyer of this income data. In order to prove that a person is eligible for Medicaid, an Affordable Care Act Marketplace subsidy, or any number of safety net programs, state governments and federal agencies pay Equifax for data to verify that person’s income.

Worse, different federal and state agencies often pay half a dozen times for the same piece of income data about the same individuals. Money that might make life a little easier for struggling families goes instead to the bottom lines of very profitable corporations.

The President’s “beautiful bill” supercharged this process, doubling the number of times state Medicaid agencies need to verify many individuals’ income each year, and adding other new requirements. As the post says, “If you had tried to find the most efficient way to transfer taxpayer dollars from healthcare to a databroker, you could not have done much better.”

As the Indiana Business Journal recently reported, the new Medicaid work mandates were promoted as a means to save money, but states will have to spend millions to comply. Most states will have to update both their aging computer systems and their methods of verifying information through various databases–and the IBJ reports that “Most will have to turn to private contractors to meet the time crunch.”

It turns out that the real  “welfare queens” are the companies profiting from money meant to provide health care and feed hungry children.

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