Autobiography - The Galindo Group

Ram Galindo THE MAKING OF AN AMERICAN Page 218
conflict. In fact, they have created a whole universe of so-called non-profit
organizations. But I have not yet met anyone working for these organizations who is not
in search of a profit, although they are careful not to mention the word.
In my life’s walk toward good citizenship, I found many examples of people and
organizations who “just used the system” to claim tax-exempt status. As a result, I am
not much of a contributor to tax-exempt organizations that paint themselves as “nonprofit”
charitable institutions. The efficiency of the contribution is much too low for my
taste. No doubt some of these organizations perform good work, but others are actually
a drag on the economy. However, “non-profits” have very powerful lobbies. At both the
state and federal levels, they are able to craft very favorable legislation to tilt the rules of
competition in their favor. The taxes they manage not to pay are simply shifted to other
taxpayers who ultimately carry the burden of this inequity - a most unsatisfactory
situation.
I know from personal experience that the fact they are exempt from most taxes does not
by any means mean they are not profitable. In fact, most of them crank up hefty yearly
surpluses. These surpluses are used to fund large executive compensation packages,
most generous retirement plans, provide secure career paths, bombard the public with
cunning advertising and to accumulate reserves for further growth. Rare is the taxexempt
organization that uses every dollar received as donation to directly aid the
intended beneficiaries. But propelled by their powerful lobbies, they smoothly sail on the
shoulders of other taxpayers. A small businessperson trying to bootstrap himself (or
herself) could never succeed with such low efficiency.
As I describe in the next section of this chapter, one of my volunteer tasks was to serve
on the board of directors of my community’s “non-profit” hospital. Following a one-year
lease of an existing private hospital in Bryan, the Catholic nuns of the Order of St.
Francis from Sylvania, Ohio, purchased the facility in 1936. St. Joseph Hospital has now
grown to be the biggest and most complete facility of its kind between Temple and
Houston. The market value of its assets approaches one quarter of a billion dollars but it
pays no taxes whatsoever to local governments. Two smaller hospitals in the
community pay local, state and federal taxes and have to compete for the same patient
base St. Joseph serves. Although, to my knowledge, a bona-fide comparison has not
been made, the amount of charity work given by the latter does not appear to come
close to its tax exemptions. It is a clear case of unfair competition.
Indeed they are some fields of human endeavor where overtaxed private enterprise
cannot succeed. Relief organizations similar to The Red Cross, Salvation Army, clubs
such as Rotarians, Lions, etc., and other purely charitable organizations should indeed
be tax-exempt, especially if they have limits on executive compensation. It is hard to
justify tax-exemption for proselytizing churches and their “spiritual” missionary
undertakings. It is harder to justify this benefit for organizations only remotely connected
with charity such as “Disease Societies”, “Think Tanks”, or other research-oriented
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