Hall: The Case for Removing the § 501(c)(3) Tax Exemption for Nonprofits That Discriminate on the Basis of Sex
Stacey Lyn Hall 
Nonprofit organizations in the United States typically qualify for a significant federal income tax exemption under Internal Revenue Code § 501(c)(3). While this exemption is beneficial in many instances, it also means that nonprofits that discriminate on the basis of sex or gender identity receive the same substantial tax benefits as non-discriminatory nonprofits. To remedy this issue, the United States should implement a system to disqualify nonprofits that discriminate on the basis of sex from receiving the § 501(c)(3) tax exemption. Other scholars have addressed different forms of discrimination in the context of § 501(c)(3) nonprofits, including discrimination on the basis of race and sexual orientation. However, there has to date been little discussion of discrimination on the basis of sex and gender identity in the nonprofit sector.
This article will examine the history, meaning, and dynamics of the § 501(c)(3) tax exemption and illustrate the need for action through the examples of nonprofits engaged in sex discrimination when hiring employees, particularly for leadership positions. It will also propose an amendment to the IRC and the formation of a committee to investigate complaints of sex discrimination. Finally, it will discuss public policy and First Amendment arguments surrounding the issue
Lloyd Mayer