Minnesota Senate Bill SF564

Minnesota 2023-2024 Regular Session

• Introduced: 1/23/23
• Refer: 1/23/23

Caption

Grants prohibition to nonprofit organizations with highly compensated officers or employees

Impact

The implementation of SF564 will require nonprofit organizations to evaluate and potentially adjust their compensation practices to ensure compliance with the new guidelines. The bill's annual adjustment clause, which ties the salary limits to the governor's salary and the Consumer Price Index, reflects an ongoing commitment to maintaining fiscal responsibility. By limiting grant eligibility based on compensation, the bill aims to promote a greater focus on nonprofit efficiency and effectiveness in fulfilling community needs.

Summary

Senate File 564 (SF564) is legislation aimed at regulating the eligibility of nonprofit organizations to receive state grants based on the compensation levels of their officers and employees. Specifically, the bill prohibits any nonprofit organization from receiving grants under economic or workforce development programs if it compensates any officer or employee at a rate exceeding 125 percent of the governor's salary. This stipulation emphasizes the pursuit of financial accountability among nonprofits, especially those that benefit from taxpayer dollars.

Contention

SF564 has sparked discussion regarding the appropriateness of setting such salary benchmarks for nonprofits, with some advocates supporting it as a means to ensure that public funds are not used to subsidize excessive compensation. Conversely, critics argue that the bill could disproportionately affect small nonprofits that may struggle to meet funding requirements while also paying competitive salaries needed to attract and retain qualified personnel. This point of contention raises broader questions about the balance between fiscal oversight and the operational realities faced by non-profit organizations.