May 23, 2011; Source: Boston Herald | An amendment has been attached to the Massachusetts state budget that will prohibit nonprofits from paying board members. Senator Mark Montigny apparently filed the amendment to speed up consideration of the bill, which had been proposed by the attorney general. A hearing is to be held later this week.
As NPQ has previously reported, the practice of paying board members came to Attorney General Martha Coakley’s attention when media focused on a massive $11 million severance package provided by Blue Cross of Massachusetts to a resigning CEO even while premiums were on a steep climb. Subsequent reports revealed the payments to board members of up to $90,000 a year. The firestorm that followed was intense.
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While it is not thought that the practice of paying board members is widespread in Massachusetts – the bill would apply to all charities. There is a provision in the proposed measure to apply for an exemption in exceptional circumstances.
“We are not going to let this drop,” said Coakley on Sunday, “We feel very strongly that not-for-profit boards should be voluntary and not paid . . . The issue goes to the root of what a not-for-profit is . . . The board’s loyalty is to the mission of the organization. Getting paid creates an appearance of a conflict of interest.”—Ruth McCambridge