Kroger bill on nonprofits draws national spotlight

Oregon Attorney General John Kroger is getting national attention over his effort in the Oregon Legislature to clamp down on charities that don’t spend enough of what they receive on programs.

This week’s edition of The Chronicle of Philanthropy features a major article on the bill (available here for non-subscribers of The Chronicle). The bill has passed the Oregon Senate, but it may run into trouble in the House where Salem Rep. Vicki Berger co-chairs the Revenue Committee, which is now considering it.

Rep. Berger “does not like the text,” The Chronicle reports.

The bill (SB 40) would disallow charitable tax deductions for gifts to charities that spend less than 30 percent on programs, averaged over three years.

The Nonprofit Association of Oregon has come out in favor of the bill. A statement from NAO Executive Director Carrie Hoops said, “We know that the overwhelming majority of Oregon nonprofits are honorably run and effective stewards of the resources entrusted to them. Oregon nonprofits routinely accomplish a great deal with limited resources. That is why we support the Attorney General’s efforts to publicize the few organizations that don’t.

“While this problem is not widespread in Oregon, it is serious for those donors whose trust is abused by a few organizations. We don’t want the good work of Oregon’s nonprofits to be discredited by a few bad apples.”

[Updated Tuesday, May 31:]

The Oregonian weighed in Monday, suggesting that SB 40 may be dead in the water unless amendments can be made. See the article here.

[Updated Tuesday, July 12:]

The Oregon Legislature adjourned June 30 without taking final action on SB40. After passing the Senate 28-2, the bill was introduced in the House and referred to Rep. Berger’s Revenue Committee. The bill died there.

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