California Nonprofits Oppose Reporting Reforms
California Nonprofits Oppose Reporting Reforms
Dozens of California nonprofit organizations are lobbying against proposed legislation that would force nonprofits in the state to disclose more information to donors, review executive salaries more closely, and hire independent auditors to examine their financial statements, the San Francisco Chronicle reports.
The Nonprofit Integrity Act of 2004, which was introduced in the state senate in February and is expected to be voted on by the state assembly's judiciary committee in the near future, is endorsed by California Attorney General Bill Lockyer as a way to help curtail abuses in the wake of several recent charity scandals in the state. "We believe the current version of the bill provides strongly needed reforms that will protect charities, donors, and programs," said Lockyer spokesman Tom Dresslar.
But several nonprofit groups said the bill would place onerous restrictions on charities while doing little to protect donors or deter fraud. "We think the answer to the problems of accountability, disclosure, and transparency...can be solved by better information and training for board members," said Kenneth Larson, director of public policy for the California Association of Nonprofits. CAN also objects to a provision that would force nonprofit boards to review the salaries of chief financial officers, saying that duty should be left to the CEO.
Both sides acknowledge that significant changes have been made to the legislation in recent weeks, easing many of the strongest objections raised by charities in the state. For instance, the bill's original draft would have required nonprofit groups with $500,000 or more in annual revenue to hire an independent auditor, something many small organizations say they couldn't afford to do. The current draft requires only nonprofit groups that have $2 million or more in revenue to meet the requirement, a change that would exempt 95 percent of the state's 90,000 charities.
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