Rhode Island House Bill H5454

Rhode Island 2025 Regular Session

• Introduced: 2/12/25
• Refer: 2/12/25

Caption

Requires nonprofit, as a condition for requesting state funds from the general assembly, to submit & post on their website, a list of10 of their highest paid director, officer & employee salaries & any forms of compensation provided to those individuals.

Impact

The implementation of H5454 is expected to significantly alter the relationship between the state government and nonprofit organizations. By requiring detailed salary disclosures, the bill aims to ensure that public resources are allocated transparently, potentially fostering greater trust in nonprofit operations. The expectation is that this transparency will help state lawmakers and the public identify how effectively nonprofits utilize state grants and funding. However, there may be concerns among nonprofits regarding privacy and the possible impact on their ability to attract talent due to public scrutiny of salaries.

Summary

House Bill 5454 introduces new transparency requirements for nonprofit entities seeking state funding in Rhode Island. Specifically, it mandates that these organizations must provide and publicly post detailed information regarding the compensation of their highest-paid directors, officers, and employees. This includes salaries, benefits such as health insurance and other forms of compensation, as well as a comprehensive account of all funding sources such as endowments and fundraising activities. The purpose of this bill is to enhance accountability and transparency in the utilization of state funds by nonprofits.

Contention

While the bill has been framed as a necessary step toward financial accountability, it may face opposition from nonprofit advocates who argue that such disclosure requirements place an undue burden on organizations. Critics may contend that the bill could discourage individuals from serving in nonprofit leadership roles due to the public disclosure of their compensation. Additionally, there may be debates about the implications of publicly available salary information, with some asserting it could lead to misconceptions regarding nonprofit pay structures and hinder their operational effectiveness.