New charity law punishes the “worst charities”

Oregon recentlypassed a state law that poses a significant threat to some of the state’snonprofit organizations. The law targets nonprofit organizations that spend morethan 70% of donations on management and fundraising in a three-year time frame.

The effect ofthe law is to eliminate state and local tax subsidies afforded to the “worstcharities”—nonprofits that spend less than 30% of donations on the particularorganization’s mission. Oregon is the first state in the United States to dothis. The executive director of the Nonprofit Association of Oregon boasts,“We’re the first in the country, and we should be proud of that.”

Should otherstates fall in line with Oregon’s new law? What are the policy arguments insupport and opposition of this law?

http://www.startribune.com/politics/national/213753471.html

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