House Committee Plans to Scrutinize Charities and Foundations

In the first clear sign that congressional scrutiny of nonprofit organizations will continue now that Democrats control Congress, the chairman of the House Ways and Means Committee has revealed plans to hold hearings on nonprofit organizations.

Rep. Charles Rangel, a New York Democrat who chairs the Ways and Means Committee, wants nonprofit organizations to show why they deserve to be tax-exempt and what they do to help the poor and elderly, according to the committee's staff members.

However, at the same time the committee will look at the problems that charities face as they attempt to fulfill their missions, committee staff members say.

Charities will find the Ways and Means Committee — which oversees tax-exempt groups — more "sympathetic" to charities than it was under Republican leadership, said Karen McAfee, a tax lawyer for the Ways and Means Committee.

Ms. McAfee said the committee plans at least two hearings on the nonprofit world and that they could start in a few weeks. One will be an overview of charities and foundations, while the second will focus more specifically on the services that urban and rural organizations provide to their communities. Charities will be invited to provide their views at the hearings, she said.

The committee's former chairman, Rep. Bill Thomas, a California Republican, held several hearings on nonprofit issues during his tenure. He raised the question of what groups deserve tax-exempt statusand specifically looked at whether hospitals deserved their status.