Letter: Mory’s should not be classified as a charity

While I am delighted to see that Mory’s is moving along toward reopening, its receiving from the IRS 501(c)(3) “charitable tax-exempt” status is a disturbing symptom of the essential corruption of our tax system.

Once upon a time, this status was reserved for charitable (entities that helped people in need), educational and religious organizations. Over the past half-century, the standard has shifted from charity to non-distribution: Any enterprise can now qualify as tax exempt as long as its purposes are not “illegal, impossible or impractical” and it does not distribute its surplus in the form of dividends.

Mory’s 501(c)(3) status raises the question of why taxpayers should subsidize through the tax exemption an enterprise that benefits only its members, rather than the general public.

Peter Dobkin Hall

Sept. 9

The writer is a senior research fellow at Harvard University’s Hauser Center for Nonprofit Organizations and a New Haven resident.


  • The Contrarian

    Well, in principle, I might agree… under the influence of strong drink and in the setting of a PU debate. That is, if the standard also applied to say, the Roman Catholic Church and Harvard, among others.

    No Private Clubs? No not-for-profit Theatres, Museums, Magazines…?

    I may not like many of the changes of the past half-century, but I don’t include the proliferation of non-profits in the category of “this change is Bad Change”.

  • In addition to Mory’s….

    The author of this letter would understandably be horrified to learn that other “educational” organizations such as RTA Inc. (a/k/a Skull & Bones) and the Whiffenpoofs (perhaps the most profitable college singing group in the nation) have been 501(c)(3) organizations for quite some time.

  • Peter Dobkin Hall

    Unlike Mory’s and other social clubs, performing arts groups (like the Whiffenpoofs and the Yale Rep) universities (like Yale and Harvard), churches, museums, magazines, broadcasters, and other charitable tax exempt organizations provide services for what the law terms “a substantial and indefinite class of persons” — that is, the general public. Historically, this has been one of the fundamental requirements for charitable tax-exempt status. Even membership organizations can qualify as charities if they offer programs and activities that benefit the general public (most trade associations, for example, are 501(c)(3)s).

    The Russell Trust Association (Skull & Bones), like other purely mutual benefit entities, is a 501(c) non-charitable organization. Like other non-charitables, it is exempt from federal corporate income taxation, but not state sales or local property taxes.

    Given the fact that the IRS Form 1023 (Application for Exemption) and Form 990 (the annual non-tax filing required of all charitables both require exempt organizations to demonstrate measurable public benefit, the agency’s granting 501(c)(3) status to Mory’s appears to be a genuine departure from past policies and practices.

  • Merav

    Corruption? Genuine departure? You seem to be obliquely suggesting that there’s some kind of favoritism/payoff involved. I get your point that the definition of a 501(c)(3) seems to have been stretched almost to the breaking point, but do you have anything to back up the quid pro quo subtext here?

  • Recent Alum

    Mr. Hall — Very interesting stuff. I am just curious, however: what really distinguishes the Whiffenpoofs from, say, the Dave Matthews Band? I would think only a small fraction of Whiffenpoofs activities benefit the general public, and lots of national bands also happen to host free concerts that benefit the general public every once in a while.