In a recent column, my friend and Herald Opinions Columnist Evan Tao ’27 argues that Brown must pay a fairer share to Providence by increasing its voluntary payments in lieu of taxation — payments the University makes to the city by choice since, as a nonprofit educational institution, it is exempt from paying property taxes. Although Tao’s column attacks the University’s philanthropy, it fails because it doesn’t consider the very reason that Brown is exempt from paying property taxes in the first place: Brown, like other private universities, hospitals and nonprofits, provides a public good to the city by merely existing.
While Brown’s PILOT payments indeed offset only 18% of the roughly $49.3 million the University would owe annually in property taxes were it a for-profit entity, Brown is not a for-profit corporation; it is a school. Brown’s mission is not generating revenue but cultivating knowledge. Our University impacts not only Providence, but our nation and humanity itself.
Like Brown, the tax-exempt status sector is older than the United States of America. In colonial times, early colonists formed charitable associations, such as hospitals, fire departments and orphanages, to address the social challenges of the day. This culture of voluntary association is so essential to the American ethos that the French philosopher Alexis de Tocqueville observed in his treatise “Democracy in America” that “Americans of all ages, all conditions and all dispositions constantly form associations.”
The charter establishing the University, granted in 1764 by the colonial General Assembly, begins by recognizing that “institutions for liberal education are highly beneficial to society, by forming the rising generation to virtue, knowledge and useful literature.” The charter goes on to explain that “for the greater encouragement of this seminary of learning,” the college and persons associated with it “shall be freed and exempted from all taxes, serving on juries and menial services.” This binding promise is a clear demonstration of how our state’s founders understood the value of Brown, the then colony’s first institution of higher education.
The government has long recognized the role of nonprofits to privately provide public goods by providing them with tax relief, an effective subsidy. Though the government provides some education and healthcare, the nonprofit economist Burton Weisbrod argues that nonprofit organizations fill unmet needs for a public good when individual preferences are too varied to be met by a one-size-fits-all government action. The government — in education and other sectors — provides services for the median, but leaves needs outside the median unmet. This is where nonprofits, like Brown, come in.
Brown contributes immensely to the common good by fulfilling its purpose of educating the future workforce and advancing academic research. Brown is a force multiplier — it takes the most motivated and intelligent young adults from across the world, and invests in them so they can go on to pursue meaningful careers. Furthermore, the University draws hundreds of millions in external research funding. This research advances our understanding of disease, brings clinical trials to Rhode Islanders battling disease, develops green technology and supports veterans with PTSD and active duty service members, among countless other projects.
Brown also has an outsized local role. In the healthcare sector, the Warren Alpert Medical School is Rhode Island’s only medical school, and 59% of all physicians in the state are affiliated with it. Several prominent Rhode Island politicians, such as Representative Seth Magaziner ’06 and and the likely next Mayor of Providence State Rep. David Morales MPA’19, are Brown alums. During the COVID-19 pandemic, the University provided its expertise to the Rhode Island Department of Health, building a dashboard to identify trends and make informed public health decisions. Furthermore, the University directly supports Providence students — it provides full tuition scholarships to up to 10 educators in training who agree to work in Providence Public Schools for three years, full scholarships to Providence Public School District students to attend Brown pre-College and policy recommendations through its Annenberg Institute.
Brown adequately fulfills its social responsibility to Providence by completing its academic mission — the reason it is tax-exempt. Any further contributions through the PILOT program are pure generosity.
Still, Brown makes such contributions. Brown has pledged to contribute $128.7 million to the city between 2024 and 2043, and an additional $46 million in voluntary payments to Providence between 2024 and 2033. Together, this represents a direct average annual investment in city finances of $8.7 million, more than double the amount stipulated in the previous memorandum of understanding. In exchange, the agreement stipulates that “the city shall agree to refrain from incremental requests for additional voluntary payments,” yet the city’s word does not appear to hold much weight for Morales, who calls on the University to increase its PILOT contributions.
Beyond direct cash payments, the University has also pledged to make at least $128 million in volunteer or in-kind contributions. These “community contributions” receive the bulk of Tao’s ire because they include work by student clubs (as well as the aforementioned education initiatives) and lack a clear methodology for how the value of volunteering is calculated. But even if Tao thinks the University’s pledge to make $128 million in volunteer or in-kind contributions is worthless, it doesn’t negate the fact that Brown is still voluntarily paying Providence $175 million directly.
Both Tao and Morales call for a return to the negotiation table over PILOT payments. However, I’m not sure there exists a number that Brown could pay that would satisfy its critics. Combined, the University’s direct PILOT payments and community contributions exceed the 25% that the Boston PILOT Task Force has recommended. These criticisms attack the very institution of a nonprofit, and are indicative of a predilection amongst progressive activists to instinctively castigate any large, private institution as parasitic, irrespective of its actual conduct. But in America, in many cases, nonprofits play just as important a role in the social fabric as the government.
While Tao claims a renegotiated pilot agreement could “substantially increase City Hall’s budget, but is a drop in the bucket compared to Brown’s annual budget,” I’m curious what he believes the University should cut. Brown does not have a magic money machine — money going one place is money not going elsewhere. Should Brown cut over 400 full scholarships to make up for the $41 million difference between Brown’s direct payments and its hypothetical tax bill? Should it lay off almost 350 staff members, who overwhelmingly live in Rhode Island? Or on the flip side, should the University raise tuition by several thousand dollars to raise this revenue? Such tradeoffs would jeopardize the main academic function of the University, which is the whole reason the government gives Brown and institutions like it tax-exempt status in the first place.
PILOT payments are charity. Volunteering and community contributions are kind gestures. The University’s responsibility to Providence, the nation and the world lies in its academic mission. Brown has no obligation to return to the negotiation table, nor should it.
Tasawwar Rahman ’26 MD ’30 can be reached at tasawwar_rahman@brown.edu. Please send responses to this opinion to letters@browndailyherald.com and other op-eds to opinions@browndailyherald.com.
Tas Rahman is an Opinion Editor and a member of the Editorial Page Board. He hails from Detroit, Michigan and is concentrating in Computational Biology and Judaic Studies. In his free time, you can find Tas hiking and reading the Atlantic (alongside the Herald).
