In January the blog noted in Threat to Tax Deductions that some believe that only those nonprofits that address the social good should have tax deductible status, possibly ruling out local historical organizations. In the most recent issue of The Public Historian (February 2008), the entire volume looks at “Sites of Conscience.” The forward cites a 1999 meeting of historic site directors that considered how museums could serve as new centers for democracy in action. They adopted the following statement:

“We hold in common the belief that it is the obligation of historic sites to assist the pulbic in drawing connections between the history of our sites and its contemporary implications. We view stimulating dialogue on pressing social issues and promoting democratic and humanitarian values as a primary function.”

How might this statement help satisfy those that want to see tax deductibility reserved for social justice nonprofits?

A recent article on MinnPost and last year’s Rainbow Ruling both deal with taxes and nonprofits. Thankfully neither have involved local historical organizations, yet. Scott Russell writes about “Expanded definitiion of fundraisers is puzzling nonprofits” on MinnPost. Russell details how the Minnesota Department of Revenue is treating art classes provided by the White Bear Lake Art Center as fundraisers rather than as programming designed to further its mission. The Rainbow Ruling from the Minnesota Supreme Court on December 6, 2007, disallowed property tax exemption for a nonprofit daycare. Both resulted in back taxes due. As America’s service-based economy is stressed by rising costs for everything, government servants seem to be caught between a rock and a hard place. On the one hand, citizens are reluctant to have taxes raised since they face similar rising costs. Yet, government needs to function well, but cannot without additional resources. Russell touches on the way public servants are solving government’s need for addtional money when he writes, “the state is trying to collect more taxes through existing laws rather than to pass new laws and new taxes.”

Have you experienced anything of a similar nature? What are some measures that nonprofit historical organizations might use to ensure they do not become targets for expanded taxation?

One of the concepts in business is that there is value in a good name or “brand value,” which is the difference between appraised value and purchase price. For example, the good name of sports franchise could be said to be worth $20 million, if the appraised value of the team was $200 million and it recently sold for $220 million. Nonprofit historical organizations likewise have good names that are worth something, but how might that value be measured? Can that value be measured in dollars? Could it be measured in other ways?

Policy Innovations believes there is untapped power in nonprofit brands. Local historical organizations often see results of their good name when people turn to it for all sorts of reasons: community events, genealogical questions, natural disasters, offering artifacts, and on and on. The brand value of a local historical organization can make the organization more than a department of civic life. As the value rises, the nonprofit historical organization becomes more central or meaningful to people’s daily life because they think well of it.  Robin Rusch writes more about this in “Do nonprofits have value?“  She concludes: “The more nonprofits understand the value of their brand, the better control they can exercise over how and when that brand gets used and the better they can put their donations to use in furthering their cause..”

How would you measure the value of your organization’s good name?

Here’s a potential scoring system based on Robin Rusch’s work. Measure for Brand Strength