July 20, 2017; Times Free Press (Chattanooga, TN)
Earlier this month, a county board of commissioners in Tennessee had to backtrack on a resolution designed to exert inappropriate control over independent nonprofits receiving county funding. In addition to requiring nonprofits that receive county funding to adhere to various government purchasing and travel policies and expense reporting, the county board insisted that groups designate one of their board seats to a county commissioner.
This overreach by a government entity gets at the heart of the importance of nonprofit self-governance—the power of independent nonprofits to name their own board members, who then bear responsibility for overseeing adherence to bylaws and articles of incorporation.
While their efforts were aimed squarely at the Chattanooga Convention and Visitors Bureau (CVB), an agency bringing in around $8 million annually of county funds, the resolution as initially passed would’ve required the same constricting demands on many other nonprofits, including numerous local volunteer fire departments.
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Both the CVB and the Humane Educational Society pushed back against the resolution. While unaffected by the new rules, the Dallas Bay Volunteer Fire Department also responded to the new oversight measures, citing the need to clarify its commitment to transparency.
It is reasonable for government funders to want transparency and accountability of public funds released to nonprofit partners; however, exerting governance control over separate sector players is not. Greg Martin, a county commissioner who voted against the resolution both times, realized the implications and potential unintended consequences of this move. “I don’t have a problem with transparency, but I believe we have added another layer of government to these nonprofits with this resolution.”
This is an area where nonprofits must remain vigilant and exercise advocacy. According to the Urban Institute’s 2013 report on nonprofit-government contracting, a full third of nonprofit revenues in the U.S. flow from government coffers. While nonprofits and government historically have partnered to deliver important services to communities, it is vital that the concepts of self-governance remain intact.— Jeannie Fox
