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Reforming Property Tax Exemption Policy in the Nonprofit Sector: Commercialism, Collective Goods, and the Donative Theory
Author(s) -
Grimm Jr. Robert T.
Publication year - 1999
Publication title -
nonprofit management and leadership
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.844
H-Index - 54
eISSN - 1542-7854
pISSN - 1048-6682
DOI - 10.1002/nml.9303
Subject(s) - commercialism , tax exemption , nonprofit sector , business , intellectual property , law and economics , public economics , public good , economics , public relations , law , microeconomics , political science
This article develops, critiques, and tests the donative theory, which bases the tax treatment of nonprofits on their production of collective or public goods, through twelve variations for determining property‐tax‐exempt organizations in five nonprofit industry groups. Using a case study of Indianapolis nonprofits, the results reveal that a significant number of organizations in the nonprofit sector and most industry groups would experience the loss of their property tax exemption. The author calls for nonprofit managers and scholars to give greater future attention to property tax exemption policy in the nonprofit sector.