Nonprofits are given donations, and that's money other people have already earned and paid taxes on.
If a nonprofit owns another for-profit business, taxes are paid on any such profits before the nonprofit receives them.
So you are saying that tuition and hospital bills are donations? That's an atypical way of looking at it.
Payments received by for-profit businesses are also money that other people have already earned and paid taxes on. There's an argument to be made for abolishing double taxation and shifting the entire tax burden either to businesses or individuals, but that would be even more off-topic for this thread.
Nonprofits sometimes engage in for-profit activities on their own, rather than through a separate business. If it's not related to their tax-exempt purpose, they pay Unrelated Business Income Tax (UBIT) on that.
Ken wrote: ↑Sat Oct 29, 2022 12:44 pm\
Whether the COVID reimbursement rates for hospitals were reasonable I have no idea. But there is no doubt that COVID emergency treatment at hospitals, especially during the first year of the pandemic, was far more costly to hospitals than any routine non-pandemic care in the pre-COVID era.
Yet despite this, the health-care industry earned huge profits - and is now 20% of America's economy.
Americans are sicker than ever.
Josh wrote: ↑Sun Oct 30, 2022 6:03 pmMost hospitals are nonprofits.
Josh wrote: ↑Sun Oct 30, 2022 7:18 pmWho exactly earns profits in a nonprofit?
That's entirely not allowed. The CEO can earn a salary, but nonprofit salaries are typically less than you can get in the private sector. Most nonprofit boards aren't paid at all.
Profits are not disbursed to the board. If a nonprofit tried to do that, they'd be reclassified as a for-profit company (and have hefty tax penalties to pay).
That's entirely not allowed. The CEO can earn a salary, but nonprofit salaries are typically less than you can get in the private sector. Most nonprofit boards aren't paid at all.
Profits are not disbursed to the board. If a nonprofit tried to do that, they'd be reclassified as a for-profit company (and have hefty tax penalties to pay).
So tell me again how the 3x payments to hospitals contributed to excess profits?
That's entirely not allowed. The CEO can earn a salary, but nonprofit salaries are typically less than you can get in the private sector. Most nonprofit boards aren't paid at all.
Profits are not disbursed to the board. If a nonprofit tried to do that, they'd be reclassified as a for-profit company (and have hefty tax penalties to pay).
So tell me again how the 3x payments to hospitals contributed to excess profits?
That's entirely not allowed. The CEO can earn a salary, but nonprofit salaries are typically less than you can get in the private sector. Most nonprofit boards aren't paid at all.
Profits are not disbursed to the board. If a nonprofit tried to do that, they'd be reclassified as a for-profit company (and have hefty tax penalties to pay).
So tell me again how the 3x payments to hospitals contributed to excess profits?
Is this a joke, or are you serious?
I'm serious. If it's impossible for the hospitals to be making a profit, where did the 3x payments go?
I'm serious. If it's impossible for the hospitals to be making a profit, where did the 3x payments go?
It's not impossible for them to make a profit, it just can't be disbursed to individuals for personal gain...
Non-profits can make enormous profits. Non-profit status is a tax status not a prohibition on earning profits. Which are simply net revenues on the balance sheet. They just do what most corporations do and plough their profits into re-investing in the institution and lavish salaries for those at the top. What they don't do is pay dividends to stockholders or plough profits into things like stock buybacks. Which most corporations don't do either.
In fact, there is very little difference between the behavior of a for-profit company that reinvests all of its profits back into growth. And a non-profit like a hospital chain or university that does the same thing. That is how we get monster corporations like Amazon that declare zero profits because they reinvest all their net revenue into growth. And monster non-profit hospital chains like Ascension Health that realize massive profits and do the same exact thing.
2 x
A fool can throw out more questions than a wise man can answer. -RZehr
