Sep 30, 2011
State Alert: Massachusetts Board & Executive Compensation
7.15.11 - We’ve reported that during consideration of the state budget, the Massachusetts Senate included a provision in their version of the bill that would have prohibited compensation of board members of public charities. This measure did not survive conference committee negotiations. Nonetheless, it remains a priority of the state attorney general as the Chronicle of Philanthropy notes. A stand alone bill (HB 3516) with the same language as the Senate budget amendment was also introduced this year; it is not currently moving.
6.30.11 - Previously, we covered the budget amendment banning board compensation and capping executive compensation for charities in the bay state. The Chronicle of Philanthropy reports that unless the legislature decides to remove the measure, it may go into effect as early as July 1, 2011 when the budget takes effect. At the time of this writing, we learned that a budget resolution had been reached but details not released. We do not yet know if the prohibition on board compensation is included. We will post updates on our website.
Relatedly, Andrew Schulz, Vice President of Government Relations and Public Policy at the Council on Foundations, voices disagreement with this and other legislative measures to ban board compensation explaining that they challenge the independence and flexibility of nonprofits.
5.26.11 - On Thursday, May 26, the Massachusetts Senate passed an amendment as part of the Senate budget to prohibit public charities from providing board compensation without prior approval from the state Attorney General. The amendment also provides that the AG may review executive compensation and, if the AG does a review, must report findings to the legislature. The provision on board compensation is similar to a bill sponsored by Senator Mark Montigny and Representative Martha Walz earlier in the session (see this week’s Consider This).
The definition of “public charity” in the Commonwealth of Massachusetts is broad and includes private foundations. We will continue to keep you posted of developments. Please contact Sue Santa (.(JavaScript must be enabled to view this email address)) with questions or concerns.
For more on this issue:
Consider This… Nonprofit Board Compensation & Executive Pay Under the Gun
News coverage:
7/6/11 Lawmakers in 2 States Strike Down High-Profile Bills to Regulate Nonprofits, Chronicle of Philanthropy
6/26/11 Mass May Soon Ban Pay for Trsutee Nonprofit Groups, Chronicle of Philanthropy
6/7/11 Mass. Foundations Consider Proposed Restriction on Board-Member Pay, Chronicle of Philanthropy
6/21/11 Massachusetts: The Propriety of Board Compensation, COF Interact
6/7/11 Mass. Foundations Consider Proposed Restriction on Board-Member Pay, Chronicle of Philanthropy
5/27/11 Senate Passes Rule Restricting Nonprofit Board Pay, Boston Globe
5/23/11 Pols Aim to Ban Money for Nonprofits’ Boards, Boston Herald
Additional resources:
Coakley Strikes Out , Reid & Reige P.C. Nonprofit Organization Report - Spring 2011
Taking Stewardship Seriously, Philanthropy Magzaine (July 2000)