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ERIE NONPROFIT PILOT PROGRAM

A high percentage of the land in the city of Erie is for nonprofit use. That means the city cannot collect all of the tax dollars from that property. Local nonprofit businesses and organizations have benefited from the lack of specific legislative standards defining the term “nonprofit entity.” The lack of specific standards has also led the five Hospital Utilization Project (HUP) standards used by the Erie County Tax Assessment Board to be applied on an inconsistent basis. This has led to increasing confusion and confrontation between the nonprofit entities and the public. It is imperative that the city of Erie create specific standards for nonprofit businesses and organizations that have assets greater than 10 million dollars in the previous fiscal year that reside in the city to follow so that everyone pays their fair share.

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  1. Advances a charitable purpose (Must meet 2 out of the 5 criteria)

    • Relief of poverty
    • Advancement and provision of education regardless of income
    • Advancement of religion
    • Prevention of disease and illness to low income individuals and families
    • Advancement of youth and senior centers
  2. Donates or renders gratuitously a substantial portion of its services (Must meet 2 out of the 3 criteria)

    • Purchase 75% of goods and services used from local businesses in Erie County
    • Minimum 66% of the net operating income to be used for goods and services for all regardless of their ability to pay
    • Minimum 20% of the net operating income to be used for the advancement of arts, music, or technology in the Erie community
  3. Benefits a substantial and indefinite class of persons who are legitimate subjects of charity (Must meet all of the criteria)

    • 40% of the employees are 35 years old or younger
    • 25% of the employees are 55 years old and older
    • 5% of the net operating income used for career fairs, job placement, and career advancement
  4. Relieves the government of some of its burden (Must meet all of the criteria)

    • Employees are paid 3% above the national average for their given profession
    • Annual cost of living increase equal to or greater than the annual cost of living allowance for social security
    • Dollar for dollar match up to 3% of the contributed amount to a health savings account
  5. Operates entirely free from private profit motive (Must meet all of the criteria)

    • Applies or reserves all revenue, including contributions, in excess of expenses in furtherance of its charitable purpose
    • Compensation, including benefits, of any director, officer or executive leadership, is not greater than 3% from the prior year regardless of financial performance of the nonprofit entity
    • Require all employees not to accept any goods or services for personal use from outside sources that are $20 or more in calendar year