Sesame Workshop Misrepresented

To the Editor:

The unrecognizable portrait of Sesame Workshop in the Chronicle of Philanthropy (“The Business of Charity,” October 18) is at best an innocent misrepresentation and at worst a smear on the Workshop’s activities, along with those of other prominent nonprofit groups. The article implies that the Workshop (and others) somehow “avoid” the payment of federal taxes on their activities by misusing their tax-exempt status to operate in the world of commerce. This implication is wrong and insulting for the following reasons:

First, the Workshop is a public charity that is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, and from state taxation under comparable state tax laws.

Second, for over three decades since its founding, Sesame Workshop has complied with all tax laws, regulations, and IRS rulings.

It has, within those mandates, licensed the use of its trademarks and copyrights, to expand the reach of its educational programs, such as “Sesame Street,” to improve their ability to reach children and parents with educational messages for preschoolers for which the show (its related books, videos, live shows, CD-ROMs, etc.) has set the “gold standard” for quality and educational delivery.

Third, the royalties received from the sale of Sesame Street licensed products, which are explicitly exempt from tax, are plowed directly back into covering the costs of production as well as research for all of our projects. These royalties have enabled us to rely less on federal and state taxpayers to produce our content. In fact, the Workshop is often lauded as a role model for the nonprofit sector because it supports itself with public-private partnerships, and does not solely rely on taxpayer funding.

The article’s unfortunate description of our activities does a disservice to the many dedicated professionals who work tirelessly for our mission of using media to help children reach their highest potential.

At a time in which the not-for-profit sector is struggling for revenues necessary to pay the costs of producing the goods and services that serve the public interest, this sort of “implied attack” on exempt organizations that support their missions through entrepreneurial activities is most untimely and unfortunate.

Let’s hope the misperceptions spread by this article do not distract those in the nonprofit community, including the Workshop, from moving forward on their programmatic agendas at a time when our country needs their good work more than ever.

Gary E. Knell
President
Sesame Workshop
New York