Whatcom, Washington Charter Amendments To Restrict Non-Profits

Whatcom County, WA has some interesting charter amendments being talked about by their charter review commission.

The Bellingham Herald has been covering the charter review process. From a recent article:

A conservative member of the Whatcom County Charter Review Commission seeks to restrict the county government’s funding of nonprofits. This would be the second such proposal put forward by the commission.

A county charter amendment by commissioner Wes Kentch that is scheduled to be introduced at tonight’s commission meeting in Ferndale would require nonprofit nongovernmental organizations seeking money from the county to complete an application. The county could not commit to funding a nonprofit longer than two years, and the organization must meet certain requirements to qualify for funding.

Text of the amendment:

Section: 6.91 – Non Profit NGO Request for Proposal Transparency
6.92 – Non Profit NGO Financial Statements Transparency
6.93 – Non Profit NGO Donor Disclosure Transparency
6.94 – Non Profit NGO Ineligibility When Legislating Through the Courts
Section 6.91 Non Profit NGO Request for Proposal Transparency
Any project involving any disbursement or receipt of monies, by Whatcom County, to or from any nonprofit NGO shall be initiated with a Request for Proposals (RFP) drafted by Whatcom County.
All agreements involving transmittal of funds between Whatcom County and any nonprofit NGO shall have a sunset clause based on the biennial budget. No sunset clause shall be extended without a new RFP process.
Any Local Integrating Organization funding passing through Whatcom County accounts to any
nonprofit NGO, excluded by law or custom from a Whatcom County RFP process, shall require full financial
disclosure by the nonprofit NGO to Whatcom County, as outlined In Section 6.92.
Section 6.92 Nonprofit NGO Financial Statements Transparency
Any nonp rofit NGO transmitting funds to or from Whatcom County shall provide full financial statements to Whatcom County, externally audited by a certified accountant, including statements of assets and balances, income and expenses, fund reserve allocations, and donors, from the two fiscal years prior to the date of RFP submittal, and for any interim year(s) while the submittal is processed, and for a period of two years following any transmittal of funds.
The penalty for falsified financial statements shall be return of 100% of funds qualified by the falsified information, and ineligibility to partner financially with Whatcom County for ten years from the date that such financial information is ruled falsified.
Section 6.93 Non Profit NGO Donor Disclosure Transparency
Any nonprofit NGO who may legally receive donations from non-disclosed donors shall be ineligible to transmit funds between themselves and Whatcom County.
Any nonprofit NGO who may legally transmit funds between themselves and another nonprofit NGO whose donors are legally non-disclosed shall be ineligible to transmit funds between themselves and Whatcom County.
Section 6.94 Non Profit NGO Ineligibility When Legislating Through the Courts
Any nonp rofit NGO initiating or supporting, with funding, legal briefs or official sanctions, litigation or citizen voter initiatives, impacting the Whatcom County Code or Charter in any way, or any other legislative codes binding on Whatcom County land and water planning processes, shall be ineligible for funding or project relationships with Whatcom County for a period of ten years after the date of final court settlement of such litigation.
Contractual agreements and projects in effect between Whatcom County and such a nonprofit NGO when such litigation or citizen voters initiatives are initiated or supported may be immediately terminated.

A previously proposed amendment would have banned outright county funding of nonprofits.

That amendment:

Title:   Shall the County Charter prohibit grants and expenditures to non-profit organizations unless the County is reimbursed by another organization or jurisdiction?
Section:   (new)
Section 6.74 Charitable AppropriationsAmendment:
Section 6.74 Charitable Appropriations The Whatcom County Executive and the Whatcom County councilmembers shall not distribute county funds via grants or expenditures, whether budgeted or non-budgeted, to charitable, educational, civic, homeowners, neighborhood, arts, trade, business, religious or scientific non-profit organizations or any other similar types of community organizations/groups not mentioned herein, unless the grant or expenditure is directly reimbursed by community, private, state, or federal grant agencies for the identical purposes for which the agency/government grant is provided.

There is opposition to this form of transparency. From Philanthropy Northwest:

The new proposal asks “shall the charter be amended to increase transparency in funding between Whatcom County and nonprofit non-government organizations (NGOs)?” It’s a seemingly benign question. After all, who isn’t for more transparency in the public sector? However, this proposal is clearly not about transparency. It is also not about best practice for all entities with which a county may conduct business. It’s about erecting barriers to the provision of “those types of services” by “that type of organization.” It also contradicts federal regulation.

First, in defining “financial statement transparency,” the proposal requires any nonprofit desiring to do business with the county to undergo an external audit. While an external audit is good business practice, it is widely understood to be both unnecessary and prohibitively expensive for the vast majority of nonprofit organizations.


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