What are the criteria for discerning whether a nonprofit is legitimate? For sure it is not whether the IRS has granted a 501(c) 3 status.
According to Wendell Potter in a Philadelphia Inquirer "rant" about Allyson Schwarz's new "nonprofit" advocacy group, the Better Medicare Alliance, here's what makes a nonprofit legitimate:
...listing of a physical address or phone number on its website; no mention of employees other than Schwartz; no board of directors (I wanted to know who actually hired Schwartz and who she answers to); no apparent way to reach anyone there other than through a generic email address. (The questions I submitted to the group last Wednesday have still not been answered.)
I agree in part that these indeed are worthy criteria for discerning nonprofit legitimacy. But these are not enough. I believe that there should also be some kind of work going on -- some activity that has measurable results as well -- something to be accountable for and worthy of nonprofit status.
But even without this added criteria, one does wonder what the IRS was thinking when granting exemption. Is it ok for the IRS to grant exemption for only a small part of the already privileged public? Alas, I believe that the law is written such that the answer is "yes". What are Ivy League Colleges such that they are designed to serve a small part of the privileged public. And, there are many such other examples while at the same time there are many examples of nonprofits that serve far more than the privileged public.
Is it time to revisit the criteria for nonprofit tax exemption? Do we really want to attempt to go down that road? I can't imagine good resulting from that trip.