New Oregon Law Would Punish Charities That Spend Too Little

A recently passed law in Oregon is targeting nonprofits that spend too little on their mission, subjecting them to financial punishments.

According to a report in The Star Tribune, House Bill 2060, which was signed by Gov. John Kitzhaber last month, will eliminate state and local tax subsidies for organizations that spend less than 30 percent on program services over a period of three years. The bill not affect federal tax-exemption on contributions.

The law was previously reported in an earlier article in The NonProfit Times.

Jim White, executive director of the Nonprofit Association of Oregon, told The Tribune that the law is the first of its kind in any state. "We're the first in the country, and we should be proud of that," he said.

The state's Office of the Attorney General has already identified 20 charities that all spend less than 30 percent of their budget on programs and services. All of the organizations on the list are based in states other than Oregon include a Troy, Mich.-based "Law Enforcement Education Program" that spends just 2.7 percent of its $2.2 million in annual expenditures on programs and services. The names of these charities were not revealed in the AG Office's list.

Oregon and other states had similar laws in past years that stopped charities from soliciting donations if they were spending too much on themselves and their fundraisers. Those rules were overturned in 1980 when the Supreme Court ruled they were a violation of a nonprofit's First Amendment Rights.

A spokesman for the Department of Justice indicated that the law is not in similar danger, as it does not restrict a charities right to fundraise.

You can read the full story in The Star Tribune.

Georgia Bill To Allow Nonprofit Food Distribution

The Georgia House of Representatives unanimously passed a law today that would allow nonprofits to sell food for short-term fundraising events without a permit. The bill will now move onto the state Senate for consideration.

ABC affiliate WTXL reported that the measure, House Bill 101, was first introduced by Rep. Bubber Epps (R-Dry Branch) and sponsored by Reps. Tom McCall (R-Elberton), Rick Jasperse (R-Jasper), Susan Holmes (R-Monticello), Buddy Harden (R-Cordele), and Robert Dickey III (R-Musella). If the bill is passed by the Senate and signed by Gov. Nathan Deal, it would remove a key obstacle for nonprofits looking to hold fundraisers in Georgia.

“Churches and other nonprofit organizations throughout the state are trying to hold bake sales and other similar fundraisers, but are getting caught in a state permit requirement that is meant for restaurants,” said Epps in a statement. “This legislation will make it easier for non-profit organizations to hold weekend fundraisers without having to deal with the hassle of obtaining a food service permit.”

Current Georgia law requires institutions classified as "food service establishments" to have a food service permit. The definition of such establishment encompasses restaurants, coffee shops, and other private and public institutions. While fairs and festivals are exempt from the law, similar short-term events are not, which have made it difficult for nonprofits conducting weekend fundraisers.

House Bill 101 would amend that law so that any event sponsored by a nonprofit or government entity would be exempt from that requirement, so long as the event lasts 120 hours or less.

You can read the full story on WTXL's website.