N.C. Nonprofits Survive One Threat But Others Loom

Print Share on LinkedIn More

March 3, 2011; Source: Winston Salem Journal | The good news for nonprofits in North Carolina is that a bill that would have made it hard for many to receive public funding was killed this week. The bad news is that the bill's backer says nonprofits are still likely to face reduced support due to budget woes.

State legislator Larry Brown, a Republican, had introduced legislation that would have had a big impact on state-funded nonprofits. Codifying some ludicrous one-size-fits-all standards of nonprofit finance, Brown's bill would have limited nonprofit eligibility for state funds based on two robotic criteria: eligible nonprofits would have to have had at least 35 percent of their funds from private sources, and they would have had to devote less than 15 percent of their funding to administrative costs.

North Carolina nonprofits, including those in Brown's Forsyth County district howled, convincing Brown to relent. Backtracking as fast as he could find a political reverse gear, Brown said he didn't mean to "hurt" nonprofits and might have been clearer in his description of administrative costs. Maybe like King Derwin in Dr. Seuss's "Bartholemew and the Oobleck," he might admit that this idea was completely wrong-headed and say these "simple words": I’m very, very sorry.

But Bert Wood of the Partnership for a Drug-Free North Carolina, though happy that Brown pulled the bill, still has concerns about faulty ideas that were behind the legislation and wants to talk to Brown and other state legislators "about what nonprofits are doing well, and how the work we do is of high value and low cost."

Brown doesn't fully get the sorry principle. He says this proposal was meant to address "some abuse in nonprofits, such as very high salaries, with only a little of the state money going to programs that help citizens." He also used the canard that the bill would have increased transparency and accountability in nonprofits. If that was the intent, the bill was ludicrous.

Despite all of Brown's hemming and hawing, the bill seems to be one of many in states and localities that seem to aim at nonprofit budgets and programs as solutions to the states' budget crises, often motivated by a discernible animus toward nonprofits and their constituents or clients. The advocacy of the North Carolina nonprofit community should be applauded, but the problems go deeper than any one bill.—Rick Cohen

  • Tom King

    Actuallym, the governor’s 35% private and 15% admin are pretty generous compared to some of the foundations I’ve written grant applications to. In nosing around to find out what the real standards were, I discovered that with some larger funders 10% admin was the top and 50% funding from “other sources” was the real threshhold, no matter what the funder’s published minimums said. At least the state was being straight up about their requirements. And 15% admin is about right for most npo’s, except for the quasi-political ones that pay really nice salaries to hire six figure CEOs to do “education” work with legislators and the public.

    Sorry, I don’t see the governor as all that draconian in his demands and, to his credit, when made aware of some problems for npos that were not able to meet the standard, he did re-examine the issue. You can’t ask for more responsive than that from politicians, who normally backtrack at a glacial pace.

  • rick cohen

    Dear Tom: Some foundations, the admin allowed is a big time zero, as I’ve written in the past. I agree on that score. But I’m concerned with the idea that there’s a standard applicable to all nonprofits given the huge diversity of nonprofits by type, interest, topic, focus, geography, etc. Your concern about the “quasi-political” nonprofits that pay big salaries is interesting. I think you might find some big salaries among nonprofits that might not fit your quasi-political concern–and in any case, I don’t think that in most cases, a nonprofit exec is pushing the admin cap unnecessarily high. As North Carolina rethinks this issue, it should really come to grips with the complexity of the issues in front of it and resist coming up with the easier-to-implement one-size response, draconian or not. Thanks so much for your comment.