Editorial: Proposed change on charities deserves approval

Sometimes a proposed change to Oregon law has everything to recommend it and still fails to see the light of day. That was the case two years ago when a bill to tighten rules on charities in Oregon sailed through the state Senate only to die a slow death in the House.

Lawmakers will have a second chance when they meet next year.

The measure aims to assure that money given to charities actually goes to the good works the charities espouse. It would give Oregon’s attorney general the power to end a charity’s tax-deductible status if less than 30 percent of what it spends actually goes to the cause it supports.

Thirty percent is not a high bar. Charity Navigator, the country’s largest evaluator of charities, says that any charities spending less than 33 percent of their budgets on their causes “are simply not living up to their missions.” It notes that 7 of 10 of the charities it rates spend at least 75 percent that way, while 9 of 10 spend at least 65 percent on their missions.

Meanwhile the bill contains safeguards that should protect a charity’s deductibility under some circumstances.

First, the 30 percent cutoff point would be figured on a three-year rolling average, so an agency faced with extraordinary circumstances for a single year would not suffer as a result.

Second, charities targeted by the attorney general’s office would have a right to appeal any decision to remove their deductibility. At that time, presumably, they could make a case for why their spending is so low.

Finally, nothing in the bill would affect a charity’s endowment, if it is lucky enough to have one. As proposed, the law would apply only to money spent, not to money set aside to assure financial stability in the future.

Giving money to a cause is an American tradition that this country could not live without. Giving the state’s taxpayers another tool to make giving more effective cannot be a bad thing. With luck, next year’s attempt to do just that will be more successful than the 2011 one was.

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