Southwest Virginia Population decline 2010-2018.

High Cost of the Non-Profits Industry

Under the Virginia State Constitution it's illegal to give public funds to non-profits - a law ignored at every level of State government.

Here in the Appalachian region of the Virginia non-profits are a big business racking up tens of millions dollars in government grants mostly under the guise of economic development. Most produce little for the public, but create jobs for themselves. We are not alone.

The number of organizations that can offer their donors a tax break in the name of charity has grown more than 60 percent in the United States, to 1.1 million, in just a decade. The $300 billion donated to charities last year cost the federal government more than $50 billion in lost tax revenue. The I.R.S. approves 99 percent of the applications for public charity in 2008 according to a new study at Stanford University.

My question is why should hospitals and educational institutions be tax exempt anyway? They charge fees and earn income - that makes them a business!

Representative Xavier Becerra a California Democrat says, "It's not free and so we need to do something to make sure taxpayers are getting a big enough benefit in return." Most of the article goes into the shear number of charities and how easy the process is. According to NYT the tax code defines public charities as organizations that are "religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international amateur sports competition or prevention of cruelty to animals."

How does the non-profit industry fit that here?

That could mean almost anything and "less than 5 percent of the applications for public charity status were turned down" even if they bother to check them out" according to the NYT. Even the IRS sates, "most new charities are more akin to the soccer group than the hospital." What that means in the Bristol Virginia and Southwest Virginia community is a massive public, but shadowy industry that evades millions in property and other taxes and delivers nothing to the average citizen. Many operate as an often closed mini-economy often economically and socially severed from the general community. Ref. New York Times December 6, 2009

History of Local Poverty

Ralph Stanley Museum.

"The most corrupt region is Southwest Virginia...more indictments for political and public office corruption have happened in this region than all other parts of the state combined." Larry Sabato, director of the University of Virginia's Center for Governmental Studies.

"It's a little-known fact that roughly 20 percent of the children in Southwest Virginia live below the poverty line and go hungry every night." Kevin Crutchfield, President Alpha Natural Resources, January 15, 2009

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