Document Type


Publication Date



Nothing is free, not even charity. In almost every case, a tax-exempt nonprofit organization must transact with profit-seekers to achieve the charitable goal for which the organization has been granted tax exemption. The organization will have to fund somebody's accession to wealth. It may be, for example, that a particular nonprofit organization need only hire one or two employees to deliver meals to elderly beneficiaries. Even in that circumstance, an organization must normally pay market rates for the labor necessary to achieve its charitable goal. Employees will profit; the law presumes as much, and we would be hard pressed to articulate an objection. In their daily pursuit of the public good, nonprofits nevertheless exist and must participate in the amoral, for-profit market just as any other consumer. They rent space, pay for transportation, and purchase labor and supplies, in most cases paying whatever the market demands and thereby conveying profit on a third party. The conveyance of profit on a third party for routine goods and services is an implicit condition precedent to the accomplishment of any charitable goal. Thus, nonprofits are not immune from market forces merely because their fiduciaries must personally disdain the profit motive. The point is so clearly axiomatic that it is almost unremarkable.

Included in

Tax Law Commons