AG Opinion Freezes Payments to Virginia Nonprofits

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April 15, 2011; Source: Washington Post | In Virginia, attorney general legal opinions are supposed to be advisory, and not have the full effect of law. But, according to the Washington Post, unless lawmakers can find a way around Ken Cuccinell's ruling last January that the state's constitution bars grants to private charities, "groups that work with some of the state’s neediest residents" could lose millions of dollars in funding.

Although the Virginia constitution specifically prohibits the General Assembly from granting funds “to any charitable institution which is not owned or controlled by the Commonwealth,” lawmakers have traditionally overcome that restriction by classifying charities as “historical” or “cultural” agencies.

Things changed last January when, in response to the attorney general's ruling, the governor's office instructed the heads of all state agencies to submit for constitutional review the names of all charitable groups the General Assembly approved for funding in last year's budget. That process effectively stopped the state from sending money to many nonprofits, including those that have been receiving public funds for years.

Affected groups include the Virginia Association of Free Clinics, a network of 60 medical clinics that served 72,000 patients last year, and which is now waiting to see if the state will release $540,000 it had been expecting. Meanwhile CHIP of Virginia, which serves 3,000 low-income families and 500 pregnant women a year, fears that the state won't release the $283,000 it needs.

The Washington Post reports that a loss of that funding will force the group to close half its local branches and cut services at others. Lisa Specter-Dunaway, president and chief executive, says if that happens "more people continue in generational poverty." Currently the General Assembly is considering new language in the state budget that might permit state agencies to contract with nonprofits for services as a way to circumvent the constitution's restriction on making direct grants.

While that might work for some, it wouldn't be a universal fix. "There may still be some cases where they just can’t work that out, and maybe the organization would lose funding,” said Jasen Eige, the governor's counselor.—Bruce Trachtenberg

  • Carol Wolf

    Does this mean that tax deductions from our Virginia Income tax forms may not make it to their destinations? 😕