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The Scoop on this Nonprofit Transparency Bill

Posted By Benjamin Bullock, Together SC, Monday, April 3, 2017

I can hear it now… “Not another report to file! We’ve already got so many! For-profit companies don’t have to jump through all of these hoops!”

But don’t fear! This bill is good for everyone, nonprofits and taxpayers, alike.

H. 3931 was introduced in the SC House of Representatives earlier this month, and has been making its way through the legislative process.

The bill, as originally written, would require any nonprofit organization that receives “public funds to submit a quarterly expenditure report to the awarding jurisdiction.” This applies to funds granted by state and local governments.

While this may sound like yet another burdensome report to file, there’s more to it than that. These reports would have to be made public by the public funder, not the nonprofit. In exchange, as long as the nonprofit files its reports correctly, it is exempt from the state’s Freedom of Information Act. What that means is, when an individual comes to your organization with a FOIA request, rather than drop everything you and your organization are doing, you may politely direct them to the public entity that granted the funds.

This is good news for nonprofits. South Carolina’s FOIA law is very ambiguous, and leaves nonprofits vulnerable to those who would stretch its application beyond the law’s original intent. Nonprofits are left uncertain about which FOIA requests are legitimate and which are not, when they receive requests for their private grant reports and donor lists. This bill would end that ambiguity by requiring a report of public funds only, and putting the burden of disclosure on the real public body.

This is also great news for taxpayers! As it currently stands, the ambiguity of FOIA means that interested members of the public don’t know to whom to direct their questions. Nonprofits and Governments can point at each other, and make it very difficult to determine who is responsible for disclosure. FOIA requests can tangle up for weeks and more, and this law would clear that away, but putting the burden where it belongs: on public agencies, not on private organizations.

This is great for accountability! When a nonprofit seeks a grant from a foundation, a responsible funder requires reporting, not just on financials, but on impact. Government should do no less, and Nonprofits should expect no less.  In Guiding Principles & Best Practices for South Carolina Nonprofits we ask you to ask yourselves, “Do we openly and honestly communicate with stakeholders and the public about our mission, activities, finances and decision-making?” This bill will help give clarity on how to be more accountable for taxpayer dollars.

Your Together SC staff has been hard at work at the State House these last few weeks. We’ve been working with other interested parties and the bill’s sponsor, Rep. Bill Herkerbsman (R-Bluffton) to amend the bill to make the reporting annual, rather than quarterly, to acknowledge that contracts for goods and services already have reporting requirements under procurement rules, and other changes to improve organizations’ ability to comply.

The bill currently rests in the House Ways & Means Committee. We encourage you to please contact your House Member, especially if they are on the Ways and Means Committee, and encourage them to support H. 3931.

 

For the Greater Good,

Benjamin Bullock,

Director of Operations,

Together SC

Tags:  accountability  Guiding Principles & Best Practices  H. 3931  public policy  transparency 

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