Tuesday, May 29, 2012

State Senate Approves Nonprofit Board Pay Ban

The Massachusetts state Senate approved a bill on Friday that would ban public charities from paying their boards of directors.

The bill, which is attached as a budget amendment, would forbid boards of directors from earning hefty salaries, all while attending only a few meetings a year, according to a report in The Boston Herald. State Senator Mark Montigny (D-New Bedford), who created the amendment, said that the new law would only impact charities that are paid for by taxpayers.

The bill must now be passed by the House and signed by Governor Deval Patrick.

State Attorney General Martha Coakley had previously made it clear that she wanted this practice illegal. In March 2011, she blasted nonprofit board pay after a report in The Herald showed that Blue Cross Blue Shield of Massachusetts paid its boards of directors $90,000. The organization has since suspended that compensation. Coakley praised Montigny's bill in a statement and reiterated her objection to the practice of paying board members.

"Voluntary service by board members is the practice at the overwhelming majority of public charities, and for good reason," she said. "Compensation of board members raises concerns about maintaining board independence and ensuring the proper use of charitable funds."

You can read the full story in The Boston Herald.

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