For over a century, lawmakers have exempted favored organizations, resulting in a tax-exempt nonprofit economy of 15% of GDP and $8 trillion in assets, with $238 billion in net income in 2019. Charitable donations make up just 12% of nonprofit income, with 501(c)(3) organizations generating most income from business activities like hospitals and universities. Proposed reforms aim to level the playing field between nonprofit and for-profit entities, with potential to raise $40 billion annually. Historically, tax exemptions were based on 19th-century social norms, leading to a massive untaxed economic sector overdue for review and reform.
https://taxfoundation.org/research/all/federal/501c3-nonprofit-organization-tax-exempt/