June 1, 2011; Source: OregonLive.com | If charities don't spend a sufficient percentage of money they raise purportedly to do good work, should lawmakers make it harder for them to do business? Oregon's Attorney General John Kroger thinks so, and so do a majority of the state's senators.
Senate Bill 40, which passed by a 28-2 vote, would disallow donors from taking a deduction on their state taxes if they give money to a charity doing business in the state that spends less than 30 percent of its budget on services. The bill, however, is in limbo in the House, where a state representative is stopping it from having a hearing.
In an editorial examining the pros and cons of the bill, the Oregonian notes that the strength of the bill is that it would essentially choke off the money supply to so-called "fake charities" that "prey on the lonely and elderly" by forcing them to disclose to donors that they can't deduct their contributions on their state taxes. An example of one such charity that would be severely hampered if the bill becomes law is Shiloh International Ministries, which as the newspapers notes, "collects more than $900,000 a year, but spends less than 4 percent of it on actual services."
One of the reasons Rep. Vicki Berger says she is holding up action on the bill is her fear that bad publicity about unscrupulous charities could also hurt legitimate ones who need help.
The Oregonian's editorial suggests otherwise, and says a hearing on the bill "would showcase the fact that many nonprofits themselves champion the bill." The editorial goes on to say the bill should be passed because, "When fake charities squeeze money out of Oregonians, they are taking that money, in effect, right out of the pockets of legitimate organizations."—Bruce Trachtenberg