The BDN Opinion section operates independently and does not set news policies or contribute to reporting or editing articles elsewhere in the newspaper or on bangordailynews.com
Austin Reese is a second-year master’s degree student in global environmental policy at the University of Maine. After graduation, he plans to attend law school, focusing on environmental administration and antitrust law in climate-compromised regions.
We hear the word “nonprofit” and we tend to relax. It sounds like a group that must be doing good, since after all, nobody’s getting rich off it, right? That comfort may be misplaced, however, because “nonprofit” isn’t a character reference — it’s a tax category. Its meaning tells you how a group is structured, not necessarily whether it’s actually helping anyone.
To get that status, a group mostly just needs a stated charitable purpose, limited lobbying, no campaign activity, and public disclosure of where the money goes. Nothing on that list demands any real bar of public good be met, and even when there’s a public good we’d all agree on, the label doesn’t guarantee anyone’s actually providing it.
Take the Boy Scouts of America. NPR reported the organization filed for Chapter 11 bankruptcy in February 2020 while facing roughly 300 lawsuits from men alleging sexual abuse as Scouts, with the organization’s own national chair admitting in an open letter that “there were times when volunteers and employees ignored our procedures or forgave transgressions that are unforgivable.”
By the time the bankruptcy wrapped up in 2023, more than 82,000 people had filed abuse claims, leading to a $2.4 billion victims’ fund, one of the largest sexual-abuse settlements in American history. And yet the Boy Scouts stayed a tax-exempt charity the entire time, sitting on $1.4 billion in assets the year before it filed.
That’s the system working exactly as designed.
Maine has a smaller version. After the 2023 Lewiston shooting, $1.9 million meant for survivors went to 29 nonprofits instead, a split the Maine Community Foundation said it disclosed. Either way, Maine’s Government Oversight Committee is seeking clarity on whether it may even legally review it. The IRS’s “operational test” for tax-exempt status only checks whether an organization is fulfilling its purpose, not where that money goes per se.
Meanwhile, the federal government has built a penalty system for executives who pay themselves more than their work is worth. Under IRC Section 4958, “intermediate sanctions” slap a 25% excise tax on anyone who takes an “excess benefit,” jumping to 200% if they don’t pay it back, plus a 10% tax on any board member who signed off. A great plan, if it weren’t so toothless, since almost nobody checks.
The IRS’s own fiscal year 2024 Accomplishments Letter shows the agency closed examinations on just 1,955 exempt-organization filings that year, out of roughly 1.9 million tax-exempt entities nationwide, and proposed revoking status for only 87 of them. That’s about a tenth of 1% of the entire sector getting a real look. A 2026 Treasury Department inspector general report found exam closures actually fell 15% between 2021 and 2025, with the agency blaming resource constraints.
Part of why few demand better is that nonprofits get treated like referees when they’re really just more players on the “political field.” We’re often told they sit above politics, neutral and trustworthy, but people trust the nonprofits on their own side and rage at the ones on the other. That selective outrage means scrutiny can become a partisan weapon instead of a basic civic habit, so there’s no real pressure on the IRS, or on state regulators, to actually dig into anyone’s favorite charity, including our own.
None of this means nonprofits are a scam, however. Many do amazing work; I consider Maine Family Planning’s Bangor clinic as one. Instead, it means the label can tell you far less than you think it does, and the systems meant to catch the bad ones are stretched too thin to catch much of anything.
So, look up the public tax filings of the nonprofits you support. Ask actual questions when you get the chance to talk to a board member. And keep pushing genuinely public problems toward government accountability, even when the “neutral” nonprofit lane feels easier; both are needed for public goods.