A new state law that took effect on January 1, 2022 requires local government elected officials who serve on nonprofit boards to recuse themselves from decisions to provide government funding to those organizations. The law means that most local officials who serve on nonprofit boards won’t be allowed to vote on local government budgets that include funding for the nonprofits on whose boards they serve. The nonprofit funding provision in the bill only applies to cities, towns, or villages with more than 15,000 residents and to counties that have municipalities with 15,000 or more residents.
The Center has heard from nonprofits that some county and city attorneys are advising county commissioners and city council members to resign from nonprofit boards to ensure compliance with the new law. It is important to note that nothing in the law prohibits local elected officials from serving on nonprofit boards. However, the Center is concerned that the overly strict interpretation of the new law could force some public servants to resign from nonprofit boards. The Center continues to work with lawmakers, state officials, and local government advocates for a solution to this potential issue.
Let us know if local elected officials who serve on your nonprofit’s board have expressed concerns about continuing to serve your organization because of this new law.