Charity Regulation On The Way?

by Gary Snyder

On the heals of Congressman Xavier Becerra (D-Calif.) at the House Ways and Means Committee’s Subcommittee on Oversight hearing stating that the “nonprofit sector doesn’t do as much as it can to police itself,” New York Governor Andrew M. Cuomo announced the release of proposed regulations to limit spending for administrative costs and executive compensation at state-funded not-for-profit and for-profit service providers.

The new regulations are applicable to organizations that get more than $500,000 from the state in a year and that count state funding as 30 percent or more of their total annual funding. Under the proposal, organizations would be able to exceed the $199,000 cap if they can provide funding for the amount they wish to pay beyond that from other sources, but only if the executive’s total pay falls below “the top 25 percent in the field, as determined by a compensation survey identified or recognized by the applicable state agency.” If a nonprofit wants to go down this path, the compensation must be approved by its board (with a certain number of independent members), which needs to show that it has conducted a review of salary data on comparable positions. The regulations also require nonprofits to spend at least 75 percent of state funding on program services.

The public comment period on the proposed new regulations begins May 30th. (link) (link)

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)