Posted on December 5, 2005

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MacDowell Colony Faces Loss of Nonprofit Status

A battle over property taxes between the MacDowell Colony and the town of Peterborough, New Hampshire, has moved to court, the Keene Sentinel reports.

At stake is a $50,000 tax bill — a portion of the colony's total tax bill on its 450-acre compound — and MacDowell's status as a tax-exempt organization. That status, which the colony has had since it was founded in 1907 as a community of artists, has long been affirmed by the town's selectmen. The town recently changed its mind on that score, however, and in November town attorneys Robert M. Derosier and John J. Ratigan filed documents with the Hillsborough County Superior Court claiming MacDowell is not a charitable organization as defined by state law, which stipulates that such an organization can't make money from its services and must also perform a service of public good. MacDowell's services mostly benefit its own members, Derosier said.

Acknowledging the potential ramifications the case has for nonprofits across the state, MacDowell resident director David A. Macy said the colony meets the "public good" requirement because the artists who stay there produce works that are enjoyed by hundreds of thousands of people around the country. Over the next month, the organization will work on a formal response to the town's case, and the two sides may meet again in January, Macy said.

Peterborough began re-evaluating the tax-exempt status of local nonprofits more than a year ago, using such criteria as whether or not their charitable activities met essential human needs and whether their missions benefited the public good. Town administrator Pamela L. Brenner said most of the groups that did not meet the requirements either paid their bills or worked out an agreement with the town to pay a reduced bill. If MacDowell is deemed not to be tax-exempt, she added, it would owe the town $160,000, although the town has agreed to accept $50,000. The colony is required by the state to pay that amount before December 12. If, at some down the road, the court should side with the colony in the case, the town would repay MacDowell, with interest.

Haigh, Anna. “MacDowell May Face Big Tax Bill.” Keene Sentinel 12/01/05.

Primary Subject: Philanthropy and Voluntarism
Location(s): New Hampshire, Peterborough

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