Oregon recently passed a bill that punishes charities that spend less than 30 percent on programs and services.
HB2060 will eliminate state and local tax subsidies for charities that spend more than 70 percent of donations on management and fundraising, rather than programs and services, over a three-year period. Oregon is believed to be the first state to do this.
Oregon’s new law does not restrict a charity’s ability to fundraise. Rather, donors to those charities can no longer claim a state tax deduction, and charities will lose their local property tax exemptions.
Oregon and other states previously had laws prohibiting charities from soliciting donations if they were paying too much to themselves and their fundraisers. The U.S. Supreme Court overturned those laws in 1980 finding that restrictions to a charity’s ability to solicit donations violated its First Amendment rights.
State officials estimate that fewer than 100 of the state's 17,152 charities will be affected by the law in its first year.