Sunshine Review has been following the difficulties in tracking taxpayer-funded lobbying associations. Tracking taxpayer-funded lobbying can be difficult because of the broad nature of lobbying. But it is the fact that these organizations have a complete lack of accountability to taxpayers which is a more insurmountable obstacle. The public has, as of yet, lacked the ability to demand transparency from them.
That may soon change. According to a New Hampshire court, when a nonprofit is largely paid for with government dollars, the nonprofit is subject to public agency disclosure requirements.
The New Hampshire firefighters union, concerned about potential corruption in a taxpayer-funded lobbying association, went to court asking for a list of the Local Government Center of New Hampshire salaries. The LGC is the home of the state’s association of municipalities, what Sunshine Review considers a taxpayer-funded lobbying association.
The association argued its salaries are not subject to public interest disclosure because it is a nonprofit.
In the end, however, the state supreme court ruled against the LGC, concluding the wages of the organization’s staff are paid for mostly by tax dollars and the work of the organization are programs for the benefit ultimately of taxpayers. Therefore, disclosure laws apply.
Transparency advocates should rejoice! It is, of course, perfectly reasonable that a nonprofit should try and keep the confidential information of its donors private. However, as far as keeping how taxpayer dollars are spent from the taxpayers, that is unacceptable. And New Hampshire citizens will now be able to do something about that.
Similarly, New Hampshire state legislator, Democratic State Representative Dick Watrous, had introduced a bill to compel the state’s nonprofits to affirmative disclosure. This would mean that taxpayer-funded lobbying associations would be included in state freedom of information act laws. The Watrous bill would have classified nonprofits as public agencies if they exceeded $100,000 in annual revenue and got half of their funding from state or local government. But the bill failed last week, with the New Hampshire House voting 214 to 80 to kill bill.
Nonprofits in New Hampshire were naturally united in opposition to the Watrous bill, declaring that the bill would have been a “huge burden” on nonprofits. Additionally, the associations stated:
*Nonprofits are “all about transparency,” making the bill unnecessary
*The disclosure requirements, including financial disclosure, would make people less willing to serve on nonprofit boards if they knew they could come under increased public scrutiny.
The Nonprofit Quarterly, the source of this news, states:
“All about transparency” counter-arguments don’t ring true about a sector that is as diverse as ours, particularly when some nonprofits are created or function to camouflage government activity.
By doing so, the journal brings back the focus on what we ought to be talking about: Right to know. All too often, government entities and, in this case, taxpayer-funded lobbying associations, use the inconvenience of delivering information as an argument against being held accountable. Hiding behind their 501(c) status, the associations feel as though their benign existence justifies their laziness in transparency.
However, it is clear that the activities of such organizations are largely funded by taxpayer dollars. Therefore, taxpayers have a right to know where this money is going. Perhaps these funds are being used in completely legitimate ways. But without having information that lets taxpayers know exactly what is going on with their money, there is no way of knowing.
The following questions have yet to be resolved, as listed in the Nonprofit Quarterly:
*When is a nonprofit organization sort of like a public agency for the purpose of levels of transparency and disclosure beyond what all nonprofits provide to the IRS in their Form 990s?
*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?”
We hope to find out the answers to these questions, and if other state courts repeat the decision made in New Hampshire, we as citizens may have the tools to do this without obstacles.