Friday, July 12, 2013

New charity law punishes the “worst charities”

Oregon recently passed a state law that poses a significant threat to some of the state’s nonprofit organizations. The law targets nonprofit organizations that spend more than 70% of donations on management and fundraising in a three-year time frame.

The effect of the law is to eliminate state and local tax subsidies afforded to the “worst charities”—nonprofits that spend less than 30% of donations on the particular organization’s mission. Oregon is the first state in the United States to do this. The executive director of the Nonprofit Association of Oregon boasts, “We’re the first in the country, and we should be proud of that.”

Should other states fall in line with Oregon’s new law? What are the policy arguments in support and opposition of this law?


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