When tax-exempt nonprofits detract value from society

Gamble, Edward; Muñoz, Pablo

doi:10.5465/amp.2018.0027

When tax-exempt nonprofits detract value from society

Gamble, Edward; Muñoz, Pablo

Authors

Edward Gamble

Professor Pablo Munoz pablo.munoz-roman@durham.ac.uk
Professor

Abstract

Nonprofits receive tax exemptions in return for social value creation and delivery. While the outcomes of these tax exemptions are often positive, there are value-detracting situations in which the cost of granting the tax exemption is likely to exceed its benefits. To date, explanations for these value-detracting situations remain scattered and discipline-centric. Therefore, the purpose of this paper is to clarify the conditions under which tax-exempt nonprofits detract value from society. We survey 15 years of tax-exempt nonprofit scholarship, across nine disciplines, and identify three value-detracting conditions: policy-making and regulation intemperance, nonprofit management and governance distraction, and detection and prosecution inconsistencies. These three conditions interact and reinforce each other, compounding the value destruction to society. Overall, our findings offer important policy insights regarding the unintended consequences of tax exemptions, and our framework can be used to identify negative-return situations.

Citation

Gamble, E., & Muñoz, P. (2022). When tax-exempt nonprofits detract value from society. Academy of Management Perspectives, 36(1), 50-92. https://doi.org/10.5465/amp.2018.0027

Journal Article Type	Article
Online Publication Date	Feb 8, 2022
Publication Date	2022-02
Deposit Date	Jul 9, 2021
Publicly Available Date	Feb 8, 2023
Journal	Academy of Management Perspectives
Print ISSN	1558-9080
Electronic ISSN	1943-4529
Publisher	Academy of Management
Peer Reviewed	Peer Reviewed
Volume	36
Issue	1
Pages	50-92
DOI	https://doi.org/10.5465/amp.2018.0027
Public URL	https://durham-repository.worktribe.com/output/1239968