Activists press local nonprofits for payments in lieu of taxes

Protestors donned their finest festive sweaters to hand Mayor Martin Walsh 1,000 petition signatures last week, demanding Boston’s nonprofits meet contributions requests made by the city through a property tax exemption program.

After councilors Annissa Essaibi-George, Lydia Edwards, Ed Flynn and Michelle Wu delivered messages of solidarity, the group of about 40 demonstrators gathered in the Piemonte Room on the fifth floor of City Hall Dec. 18, proceeded to the office of “Mayor Santa Walsh” to deliver their petition and to perform a reworking of “The Grinch,” with Boston’s educational, medical and cultural nonprofits cast in the role of the miserly protagonist.

“We’re here today to tell Mayor Marty Walsh and Boston city councilors, many of whom are here with us, that all we want for the holidays this year is PILOT payments for our communities,” said Alissa Zimmer, an event organizer with the PILOT Action Group.

The Payment on Lieu of Taxes (PILOT) program grants nonprofits tax exempt status and in return these organizations, including some the city’s most prestigious universities, agreed to make voluntarily contributions, either in cash or through in-kind contributions that benefit the community and amount to 25 percent of the value of their real estate.

Money owed

Concerned community members said they were compelled to take part in the holiday-themed action last week by the fact that since PILOT’s inception, $77 million of requested contributions have not been paid, with $17 million missing from the PILOT payment pot this year alone.

“I’m concerned that there’s millions of dollars left on the table that the city is not going after,” said Karen Kirchoff, a volunteer with City Life/Vida Urbana who was at the protest last week. “There are a lot of needs in the city that really need to be paid for.”

Unpaid PILOT payments, activists argue, could go back into the communities from which institutions, like Northeastern University in Roxbury and Tufts University, with its medical center in Chinatown, draw important resources. They say the funds should be directed toward supporting education, housing and access to healthcare for all of Boston’s residents.

Flynn said that in Chinatown, part of District 2 which he represents, the number of women routinely screened for breast cancer is among the lowest in the city, despite Tufts Medical Center’s dominating presence within the community.

Aside from missed payments, protestors rallied last week against the type of in-kind contributions that some institutions prefer instead of making direct payments. According to the agreement, these may include providing pro bono legal or educational support, financing new facilities or hosting after-school programs for youth.

But, activists say, institutions often do not consult the community on how best to direct their resources. As a result, some of the programs and services offered as a substitute for cash PILOT payments do not address the community’s most urgent needs.

“Even though these nonprofits have programs, [they’re] not commensurate with the need that’s out there and what the comparable value would be if those payments were made,” said Kirchoff.

“The community should be defining what those benefits are,” said Edwards. If this fails to happen, she said, “[Then] those aren’t benefits, that’s just paperwork.”

Re-evaluating real estate value

Another criticism of the PILOT program is that nonprofits’ payments are calculated according to real estate values set in 2009, when the program’s guidelines were formed, and do not reflect the boom in property prices, particularly over the last nine years, in which time the total value of Boston land has shot up by 55 percent.

“We have the highest income inequality,” said Edwards. “At the same time we have incredible institutions that are world renowned for their education … and they’re doing this while they expand their footprint in Boston.”

Speaking to the issue of displacement, caused in part by rising property values, Edwards added, “We are a welcoming, growing city and many of us are finding it harder and harder to stay here so that we can grow our own families. And so we’re not telling [nonprofits] to leave, we’re telling them to be a part of equitable growth.”

Essaibi-George, too, said she was willing to work alongside institutions in improving the program. “I do hope that in this new year we can get our nonprofit partners and institutions back to the table to make sure they’re doing their part,” she said. “They need to be just a bit better of a partner.”

Edwards and Essaibi-George co-sponsored a hearing in August on the current PILOT agreement and intend to continue to pursue the issue in 2019.

Protester demands

Between musical interludes featuring politicized Christmas carols such as, “Jingle bells, jingle bells, PILOT’s on its way, oh what fun it is to go to fully funded schools,” Zimmer delivered four specific demands aimed at addressing what the activists consider PILOT’s shortcomings.

Firstly, they would like to see nonprofits pay all of the requested funds, including back-payment of money they have failed to contribute. For Northeastern, Boston University, Boston College and Harvard, PILOT Action Group has calculated that this amounts to $46.7 million so far.

Secondly, activists demand that any additional revenue from universities’ PILOT payments be placed into programs that directly address education, housing, income inequality and health care. To oversee where and how this money is spent, many called for the creation of a citizen stakeholder PILOT commission.

Protestors also said they want greater transparency on where PILOT dollars are being invested and ask that the total amounts spent be stated on the City of Boston website, alongside descriptions detailing the investment.

Lastly, petition signers and protestors have requested that all of the property owned and used by nonprofits be revalued. This will make their PILOT contributions more reflective of property values today, after the market changes over the last decade.

“This is a way for us to pressure the city to collect the payments and have transparency, accountability and a community process around it,” said Kirchoff.

Following a rendition of “The Grinch,” in which Dr. Seuss’ infamous, green grouch restored a little girl’s faith in the holidays by handing her a check for $77 million in PILOT back-payments, the petition signatures were handed to a member of the Mayor’s office staff, as Walsh was not in to personally receive the early gift.

Summing up protestors’ holiday message for the mayor and city councilors, sentiments likely to survive the season and be repeated in the new year, Zimmer said, “Hey big Boston nonprofits, don’t be the Grinch who stole funds from our communities.”