A new bill pending in the Illinois State Senate would require publicly-funded nonprofits to expose the pay their executives receive from private management companies.
The bill would accomplish this by closing a loophole that currently allows organizations to hide this data, according to a report in The Chicago Tribune. State Rep. Greg Harris (D-Chicago) filed the legislation after reading a series of reports in the Tribune that revealed that the nonprofit executive pay at 18 state-funded organizations rose at double the rate of the private sector in 2009 and 2010.
The report in question showed that nonprofits were able to hide their pay data by paying salaries through for-profit management companies they formed. The proposed legislation would amend Illinois's procurement code to specify that organizations would also need to reveal what executives are paid even if those salaries came through a private company.
This is the latest step in a series of efforts by the state to bring greater transparency to publicly-funded groups. In July, the Illinois Department of Human Services, which funds many organizations in the state, started requiring all tax-exempt organizations that received $250,000 or more to release the pay data for all employees, including those paid through private companies. This requirement will extend to any nonprofit receiving $250,000 or more in DHS funding.
Harris's bill will bring similar requirements to many organizations in Illinois, regardless of which agency is funding them. During Fiscal Year 2011, more than $9.8 billion was distributed to almost 6,000 nonprofits throughout the state.
You can read the full report in The Chicago Tribune.