Professor Norman I. Silber was quoted in the following New York Times article.

Nonprofits Paying Price for Gamble on Finances
By STEPHANIE STROM
The New York Times
Published: September 23, 2009

EXCERPT:
In many cases, charities used the money from bonds to buy real estate and build facilities. Prep schools added golf courses, pools and observatories. Colleges bought entire neighborhoods and put up labs and sports facilities. Museums erected new wings, and symphonies added thousands of seats to their concert halls.

These nonprofits gambled that income from donations and investments would more than cover their debt service. But the recession turned that logic inside out.

Norman I. Silber, a law professor at Hofstra University who has done extensive research on the problem, calls the rising debt of nonprofits a “calamity.”

“If my analysis is correct,” said Professor Silber, who is also a member of several nonprofit boards, “over the next several years nonprofits across the country will have to renegotiate bond covenants, reduce services, cut staff or actually default and face foreclosures, repossessions, and in some cases, even bankruptcy.”

Before 1986, only nonprofit hospitals were allowed to float tax-exempt bonds, which they used to build new facilities. Then Congress amended the tax code to allow all charities access to the credit markets, and now even the tiny Family Service of Greater Boston has tax-exempt bond liabilities.

To be sure, the assets at nonprofits grew faster than bond-related debt. In the dozen years that ended in 2006, the value of assets held by nonprofits grew to $1.37 trillion from $347 billion (adjusted for inflation to 2006 dollars), thanks to more large gifts, increased property values, rising stock prices — and the explosion of tax-exempt debt.