Researchers have posted a new study concerning PILOTs in Boston.  Here is the abstract:

Municipalities are often unable to collect on the full taxable value of real estate due to property tax exemptions granted to nonprofits. Faced with declining funding and pressure to avoid tax increases, some municipalities are turning to nonprofits for voluntary payments called ‘payments in lieu of taxes’ (PILOTs). In this study, we examine the determinants and consequences of compliance with the largest PILOT program in the U.S., located in Boston, Massachusetts. Using institutional theory to develop our hypotheses, we find that compliance with PILOT requests is not associated with the nonprofit’s ability to pay or its financial performance. Instead, we find that lobbying efforts (i.e., reliance on political support) and the nonprofit’s vulnerability to potential tax exemption challenges are significant predictors of PILOT compliance. We interpret this evidence to mean that compliance with PILOT requests, although voluntary, are more likely to be driven by coercive institutional pressure, rather than normative institutional pressure. We document the consequences of PILOT compliance and present evidence consistent with a trade-off between PILOT compliance and mission-related spending as nonprofits (hospitals) that are more compliant with PILOT requests report lower program ratios (charity care ratios). The findings of this study should be of interest to nonprofit donors, management, and boards of directors, and to municipalities considering implementing or reforming an existing PILOT program.

Real life PILOTS, though, aren’t nearly as interesting as movie pilots:

dkj