The Board of City Directors has approved a proposal that will allow Pasadena's estimated 600 nonprofit organizations to contribute a total of $250,000 to the city instead of being taxed for it.

A recent decision by the board to include nonprofit organizations in the yearly business license tax met with vehement protests from the groups, who claimed that their inclusion in the tax base would set a precedent for levying other municipal taxes against them. Instead, representatives of the nonprofit organizations asked the city for permission to donate $250,000, which is the amount that would have been raised during the 1985-86 fiscal year by taxing the groups.

Under the agreement, the non-profit groups were given a deadline of Dec. 31 for collecting the money. If that deadline is not met, the organizations will be charged yearly business license fees, city directors said. The funds have ben earmarked by Pasadena for street repairs.

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