Ore. Law Ends Tax Breaks for Charities with High Overhead

Oregon’s legislature has adopted a measure to eliminate state income-tax deductions on donations to nonprofit groups that do not spend at least 30 percent of their revenue on their charitable missions, Portland radio station KGW and the Portland Business Journal report.

Starting in January, organizations that don’t meet the 30 percent mark must notify donors that their gifts are not eligible for state tax breaks. Such groups will face fines of up to $25,000 if they fail to so disclose. The law includes exemptions for circumstances that might temporarily push a nonprofit under the threshold, such as a major capital campaign or construction project.

“By far most of the state’s charities are solid citizens and easily exceed the 30 percent standard,” said Oregon Attorney General Ellen Rosenblum. “This new law will protect consumers from the handful of bad actors that consistently fail to do so.”

See a Chronicle of Philanthropy article about charity watchdog groups weighing in on the issue of overhead costs.