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November 23, 2020
Forty Nonprofits Paid Boston in Lieu of Taxes in FY 2020
PILOT Payments

November 5, 2020 — Forty major educational, medical, and cultural Boston-based nonprofits paid $34.39 million in cash and gave $52.91 million in benefits to the city in lieu of property taxes during the most recent fiscal year, up marginally from the year before, but still short of the amount requested, according to a report released by the City of Boston on Tuesday.

Eleven of the organizations contributed 100% of the payments in lieu of taxes—called PILOTs—in FY 2020, which ended June 30. They were:

  • Beth Israel Deaconess Medical Center
  • Boston Children’s Hospital
  • Boston Symphony Orchestra
  • Dana-Farber Cancer Institute
  • Mass Eye & Ear Infirmary
  • MASCO (Medical Academic and Scientific Community Organization)
  • Massachusetts College of Pharmacy
  • New England College of Optometry
  • Showa Institute
  • Tufts Medical Center
  • WGBH

While the city made PILOT requests of 47 institutions, seven of the nonprofits made no contribution of any kind in FY 2020, up from four organizations from the year before. They were

  • Bayridge Center
  • Catholic Memorial School
  • Hebrew Rehabilitation Center
  • Joslin Diabetes Center
  • Roxbury Latin School
  • Shriners Hospital
  • Winsor School

The remaining 30 organizations made partial payments or received benefit credits, ranging from 23% to 91% of the PILOT request. For example, Boston College met 23% of the city’s request, while Boston University met 87%; Harvard Vanguard met 38%, while Franciscan Hospital met 50%;

Nonprofits by law are exempt from paying federal, state, and local taxes, but, starting in 2011, the city began seeking PILOT payments to offset the cost of municipal services they receive, such as street maintenance, snow clearing, trash removal, and police, fire, and related emergency services.

The city focuses on nonprofits that own property valued in excess of $15 million, requesting larger nonprofits to contribute 25% of what they would be paying if their properties were on the tax rolls. Institutions can offset 50% of their payment with a “community benefit” that is supposed to target residents of the city.

When grouped by category, during FY 2020:

  • 21 educational institutions gave 73% of the requested PILOT, including $14.76 million in cash and $27.62 million in benefits.

  • 16 medical organizations contributed 89% of the requested PILOT, including $19.18 million in cash and $23.23 million in benefits.

  • 10 cultural organizations gave 59% of the requested PILOT, including $445,500 in cash and $2.06 million in benefits.

Participation rates and amounts given in cash and benefits across the three sectors was essentially unchanged from the year before.

More than half of Boston’s land is owned by either nonprofit institutions or government bodies, both of which are exempt from municipal property taxes.

In recent years, more Massachusetts municipalities have considered adopting PILOT programs, but the move has not gained much traction.

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