Elm City Beat

By Andy Ross
New Haven leads the State in the number of registered non profit organizations according to Av Harris the Communications Director for the Connecticut Secretary of the State’s office. New Haven tops the list with 1187 non profit entities. Stamford has 802 while Bridgeport has 507.

Local tax records show that approximately $4.3 billion in assets located in this city are protected from paying property taxes thanks to the tax exempt status of their owners. According to New Haven’s tax Assessor Bill O’Brien (shown right) about half of that amount can be attributed to private colleges, while the city of New Haven itself accounts for more than $1 billion. Meanwhile, the United States government pays no taxes on its property – valued at $61 million – and area hospitals add an additional $600 million worth of tax-free property. The balance of the exemptions are distribute amongst a wide variety of non-profit groups such as state government owned properties, churches, cemeteries, railroads, and assorted charitable organizations.

But as Bill O’Brien, New Haven’s Tax Assessor, explains, non-profits contribute to the economy in their own unique and significant ways. “While we cannot tax these organizations,” he says, “we should recognize that they do play an important role in New Haven’s economy.”

O’Brien’s office – with its 10-person staff – handles many tax related responsibilities, including determining the legitimacy of applications filed by organizations seeking tax exempt status as well as monitoring the organizations that have already been awarded tax exemptions.

When a request for non-profit status is made, O’Brien’s office first gives them a long list of items they must provide for verification. “Regardless of its size,” O’Brien points out, “every organization seeking to become a non-profit is required to provide certain kinds of proof to satisfy both the federal government and the State of Connecticut. Those include, for example, a current copy of the most recent 501-C (3) designation – as well as a copy of their by-laws, mission statement and articles of incorporation,” explains O’Brien.

Verifying tax exempt status is one of O’Brien’s duties but so is making sure tax exempt organizations are in continued compliance. This sometimes means hitting the road for O'Brien. Many organizations lack staff or pay to close attention to reporting exemption status changes to his office so O’Brien will go out and physically check on them. “I usually take one of the real estate inspectors with me because usually the changes in their operations have to do with real estate use”. “As an example if a church operates under a tax exception and owns real estate and they decided to rent part this would trigger a taxable event”.

Indeed, the steps and procedures that any group must go through in order to become officially established as a non-profit can be both time-consuming and costly, says Harvey Koizim (shown left). As a retired New Haven attorney and former banker who were responsible for the recent creation of the Wooster Square Conservancy, Koizim has personally seen and dealt with both sides of the complicated legal process.


“The approval process can take 2-3 years or more,” Koizim explains. “First the organization submits a long and complex form 1023 to the IRS, together with a non-refundable fee of $750. Then the IRS either approves it or requests additional information, and I’ve seen cycles of request that went on for as long as five years.”

The long and sometimes frustrating or exhausting delays are one reason that lawyers representing applicants for non-profit status typically charge a minimum of $5,000 per application.

Once that sometimes arduous process has been successfully completed and a group is recognized as a non-profit or not-for-profit organization (the terms essentially mean the same thing and are interchangeable), the organization’s supporters can enjoy the benefit of eligible tax deductions for qualified contributions. Interestingly enough, however, although it would seem that tax deductibility would be a major motivating factor for people who are considering a gift of charity, which is not actually the case. The fact of the matter is that tax deductibility is actually irrelevant for most givers, because based on IRS records only about 30 percent of all eligible taxpayers itemize their deductions.

Many middle and lower-income citizens, for instance, don’t claim the deductions to which they are entitled. For some of those donors that choice makes practical financial sense to them because there is no clear advantage to using the itemized deduction option at tax time, when they can just take standard deductions and come out the same or even ahead in terms of what they owe Uncle Sam. Others simply give without any consideration of the tax advantages, and don’t worry about keeping tax records for filing their deductions with the IRS. Even among
households that earn more than $120,000 per year, only about 40 percent itemize their charitable deductions.

Regardless of those tax implications and potential perks, the presence of so many diverse non-profit organizations in New Haven plays a conspicuous and positive role in helping to enhance the quality of life and services offered to both locals and non-residents. And many of the organizations that are registered locally not only serve people in this vicinity but also provide services to populations well beyond the New Haven region. Local, regional, state, national, and even international not-for-profit groups – with outreach programs that reach virtually all points on the globe – are based right here in our own hometown.

That phenomenon is a big reason why the community of New Haven is so unique and special. We give to our non-profits, in other words, and they – in turn – give back generously to New Haven. The hard work and effort that is invested by members and supporters of New Haven’s non-profit organizations – from the executive directors all the way through the ranks to part-time volunteers – is immeasurable, and it does not go unnoticed.

During a successful Arts and Ideas Festival this summer Executive Director Mary Lou Aleskie came together with other people involved in Non Profits and thought it would be a good idea to help spread the good word about the positive impact New Haven’s non profits have on the general public. “This community has hundreds organizations providing thousands of services that enhance our quality of life and contributes to the local economy”. “It all just sort of came together at the last minute Says Aleskie. We came up the idea to print and pass around trading cards to raise the awareness of New Haven non profits and what they do. Stickers were also printed up that say “I Love New Haven non profits.

Joanne Sciulli is the Executive Director of New Haven based Solar Youth said “The goal was for the stickers and cards to inspire people to talk about the incredible value and importance of non-profit organizations to the New Haven community, creating a collective "buzz" that will build support for all of our work”. She also adds: “The goal was for the stickers and cards to inspire people to talk about the incredible value and importance of non-profit organizations to the New Haven community, creating a collective "buzz" that will build support for all of our work”.

It is without question that all year-round these groups put time and energy into big and small events to support the arts, health care clinics, book fairs, food drives, blood bank drives, literacy campaigns, and homeless shelters. We have our Cherry Blossom Festival, the Arts and Ideas Festival, the Gospel Festival, special historic preservation efforts, vital summer youth programs, and non-profits that provide essential services such as
transportation for the elderly.

Every day thousands of people are supported in a positive way as not-for-profit agencies and organization promote a generous and caring community spirit for the residents of New Haven – and for countless deserving beneficiaries and recipients of non-profit help and assistance worldwide.