• Why does the government grant non-profits “exempt” status? What value does that reflect?

The exempt status refers to taxation. Nonprofits are exempt from paying income or corporate taxes. The main reason is that Nonprofits receive their funding from a multitude of places. That includes donations, grants, fund raisers and so on. Because of the nature of this income it is hard to determine which part of annual revenues should be considered as income. For that reason, it is easier to grant an exemption to these organizations. Nonprofits also tend to fulfill a pubic need. That can be in education, the arts, social advocacy and public awareness. Granting tax exemption allows for these organization to better serve their intended purpose. Religious organizations are also granted the same tax exemption. This is in keeping with the separation of church and state. Overall, it is assumed that nonprofits pick up from where the government falls short. They deliver services that are needed by society while relieving the burden from state and local governments. Nonprofits also give corporations are chance to give back to the community. Given that the profit margins at nonprofits can be narrow or non existent, there is not much leeway to cover a tax bill. Having a tax exemption leaves more funds for social endeavors.

• What role do non-profits play in our society? Do social service non-profits replace core government functions?  Does the sector serve as a counter-part to the for-profit sector? Do non profits push government and/or business to be more responsive and efficient?

Nonprofits work closely with local communities to meet a need. That can be anything such as food services, homeless aid, training programs, minority rights advocacy and so on. Nonprofits work with a mission to meet a need, not to make a profit and deliver to investor expectations. For many people, access to nonprofit services provide a lifeline where no other option is available. Social service nonprofits compliment core government functions, not replace. Nonprofits tend to be closer and more sensitive to the unique needs of a particular community. For example, Meals on wheels delivers hot meals to disabled and elderly citizens. This organization has offices located in the community and staff that can adapt to changing needs rapidly. A large chunk of funding comes from the government. But the knowledge and labor come from Meals and Wheels. With this business model, the responsibility of assessing and delivering to the needy is performed by a nonprofit. In some cases, a for profit such as Ford, will set up a non profit with private funds from the company and in turn make grants to social initiatives and individuals. Nonprofits try to act as a middle man for government initiatives. They determine a gap or misalignment of funds and try to reallocate those funds by obtaining government grants. It is hard to say that the nonprofit sector can drive increased responsiveness and efficiency from business and governments.