Taxpayer Funding and Planned Parenthood

By Vicki Evans

April 1, 2011

There is much information and misinformation swirling around the Pence Amendment and its potential to close down Planned Parenthood. To paraphrase Mark Twain, Planned Parenthood’s demise is greatly exaggerated, especially by Planned Parenthood itself.

The Pence Amendment is amendment No. 11 to the House appropriations bill, HR 1. It denies funding to Planned Parenthood of America and 102 of the organization’s affiliates. Related amendments to HR 1 would eliminate funding for Title X programs, ban federal and local appropriations to pay for abortions in the District of Columbia, ban funding for the U.N. Population Fund and ban funding for foreign nongovernmental organizations that promote or perform abortions as a method of family planning. These amendments were introduced because Americans, regardless of how they feel about abortion, are not often eager to subsidize it with their tax dollars – especially abroad and especially in this economy.

Planned Parenthood’s reaction was swift and intense. Pence’s proposal alone would cut off 48 percent of its patients, or 1.4 million people, from their source of health care, the organization said.

But let’s take a closer look at Planned Parenthood’s other sources of revenue and at the services it provides.

Planned Parenthood receives about a third of its revenues from clinic income, a third from contributions and grants and a third from government sources. According to its most recent annual report, it performed 324,008 abortions in 2008 – representing 27 percent of all U.S. abortions that year. Abortion accounted for $152 million, or 37.5 percent, of its total clinic income of $405 million. Abortion is Planned Parenthood’s most profitable activity. Contraception, sterilization, pregnancy testing, HIV and STD testing, cancer screening and a growing number of RU486 chemical abortions make up the balance of its clinic income.

The organization receives contributions and grants from the general public and large foundations such as the John D. Rockefeller and Bill and Melinda Gates foundations. Because Planned Parenthood is a nonprofit under the federal tax code, donations made to it are deductible as charitable contributions.

It is a popular misconception that nonprofits do not make a profit; they are simply not subject to income tax on their revenues in excess of expenses. Without shareholders, this excess is plowed back into operations. Planned Parenthood reported excess revenues of $63.4 million this year, down from $85 million last year.

In its most recent fiscal year, Planned Parenthood received $363 million from government sources. The greatest part was from two federal programs: Title X and Medicaid waivers.

Title X of the Public Health Services Act was passed by Congress in 1970 to control population growth by distributing contraceptives to low-income families. Planned Parenthood is the largest recipient of Title X funding.

The Medicaid waivers program began in 1993, when the Department of Health and Human Services waived, for purposes of receiving free contraceptives, its usual income limits for qualifying for Medicaid benefits. Medicaid is a program for eligible low income individuals and families that is jointly funded by state and federal governments and managed by the states. Although the law stipulates that funds from either program cannot be used for abortion, states remain free to use their own funds to pay for “medically necessary” abortions for Medicaid beneficiaries. A Guttmacher Institute report indicates that 20 percent of Medicaid recipients report having used Medicaid to pay for abortions.

As a practical matter, government funds awarded to Planned Parenthood for a specific, restricted nonabortion purpose like Title X spending, for example, result in other nonrestricted funds being freed up to support its abortion segment at its discretion. It becomes a matter of which pocket the dollars come from.

Government has helped Planned Parenthood grow into a billion-dollar enterprise over the past 40 years. If Planned Parenthood doesn’t continue to offer medical care to poor women, even without further government funding, it is because it won’t – not because it can’t. It has the resources to do so.

Vicki Evans is the Respect Life Coordinator in the San Francisco Archdiocesan Office of Public Policy & Social Concerns and a Certified Public Accountant.  She recently graduated from Pontifical University Regina Apostolorum in Rome with a licentiate degree in Bioethics. 

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