Not-for-profit organizations that own their buildings are receiving financial benefits not available to non-profits that rent space in the City of Victoria.
Coun. Geoff Young brought up the discrepancy during a lengthy debate about the city’s permissive property tax exemptions Thursday.
“We have the situation of very similar organizations, some of which have the ability to buy a building and which we’re giving a full exemption, and those that can’t (buy) the building are paying their full cost.”
In 2011, the city granted full property tax breaks to 105 non-profit organizations such as social-service agencies, arts organizations and churches. The exemptions totalled $1.7 million.
Meanwhile dozens of other non-profits paid property taxes indirectly, through rent paid to their landlord.
The Women’s Sexual Assault Centre is one of them.
“All non-profits struggle with their overheads and I think we all would like to see some relief in terms of tax exemptions,”said centre executive director Makenna Rielly. “We certainly have not ever been in a position to purchase property.”
Rent is very high in the Central Building at 620 View St., making it difficult to keep administrative costs down, she said. The centre pays $7,500 monthly for their 3,000-square-foot space.
This issue of equity is just one of many on the table as the city attempts to overhaul its permissive tax exemption program.
Applications from non-profits are evaluated on a basis of organizations’ accessibility, financial need and accountability. However, tax-break applicants are not scrutinized to the same degree as grant applicants.
In 2004, the city opted to reduce the tax exemptions for new applicants in the educational sectors, and for organizations that primarily serve people living outside the city. However, organizations already receiving full exemptions were grandfathered.
“It was a strong policy, (but was) somewhat weakly implemented,” said consultant Peter Adams, commissioned to examine the city’s policies.
Coun. Marianne Alto put forward a motion to limit the tax exemptions in several ways.
She recommended capping exemptions at approximately the current value, and phasing out grandfathered organizations over a “reasonable amount of time.”
“It’s a matter of fairness,” she said.
Alto also recommended excluding parking lots from tax exemptions. Mayor Dean Fortin, however, said it needs more thought.
“What’s the intended impact and what’s the unintended impact?” he asked. “Is our goal to say to a church, ‘you now have to charge for parking.’ Or are we saying ‘Get rid of your parking’?”
Coun. Pam Madoff also favoured postponing a decision and called for better engagement with stakeholders.
“With those who are most affected, we have to be really careful about the message we send,” she said.
Council tabled the discussion and requested more information from staff.
Non-profits get creative in challenging times
Non-profit organizations facing high rent are finding ways to partner with other agencies to cut back administrative costs.
Recently, the Women’s Sexual Assault Centre and the Victoria Women’s Transition House Society consolidated some functions, without fully merging.
Rielly said she is now looking to finding a new, cheaper lease for the centre. “We’re also looking at some co-location model.”
Co-locating is the new buzz word in the non-profit world. It allows non-profits to share rent, but also share other resources.
Big Brothers Big Sisters of Victoria recently started sharing a portion of its office space in Vic West with Need2.
“Because we have come to know and understand each other better, we’ve looked for opportunities to improve our work together,” said Big Brothers executive director Rhonda Brown. “They’ve been able to help support some of our more specific volunteer training through some suicide prevention training.”
BY THE NUMBERS
• City of Victoria 2011 tax exemptions by type:
Non-profits – $1.7 million
Heritage – $749,000
Revitalization – $2.5 million
• 2011 biggest tax breaks:
Craigdarroch Castle – $88,210
YM/YMCA – $86,801
McPherson Foundation – $81,191