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March 18, 2010; Nashua Telegram | How public is a nonprofit corporation? A New Hampshire court has ruled that when a nonprofit is largely paid for with government dollars, it has enough governmental DNA to make it subject to public agency—like Right-to-Know disclosure requirements.

For several years, the Local Government Center has resisted calls for disclosing its schedule of salaries. The LGC’s argument was that the organization is a private nonprofit organization and its salaries were not subject to public interest disclosure. The LGC is the home of the state’s association of municipalities and administers some benefits packages for participating municipal workers such as health insurance and workers’ compensation.

Charging that there was some financial misbehavior in the organization, the state’s firefighters union went to court asking for, among other things, a list of the organization’s salaries. The state supreme court just ruled against the LGC, concluding that while the LGC is not a government agency, the wages of its staff are paid for mostly by tax dollars and the work of the organization are programs for the benefit of taxpayers.

Gaining access to the salaried revealed that 21 of the LGC’s employees earn more than $75,000 a year and seven make more than $100,000. This is an interesting case for what might be possible precedental value. At what point does the proportion of a nonprofit’s budget that comes from governmental funds make the nonprofit subject to public sector right-to-know laws? What kind of activities might a nonprofit do that would be considered “the public’s business?”

On the other hand, what standards and thresholds should apply to largely government-funded nonprofits regarding the information that the public has a right to know about? As public agencies offload public functions to “quasi-public” nonprofits, shouldn’t the public have access to information about these nonprofits that would have been disclosed had the functions been maintained in public sector organizations?—Rick Cohen