California governor vetoes one bill, signs another impacting philanthropy sector

• Date: 01 December 2019
• Published date: 01 December 2019
• DOI: http://doi.org/10.1002/nba.30689

NONPROFIT BUSINESS ADVISOR DECEMBER 2019

6© 2019 Wiley Periodicals, Inc., A Wiley Company • All rights reserved

DOI: 10.1002/nba

Industry News

California governor vetoes one bill, signs another

impacting philanthropy sector

California Gov. Gavin Newsom has taken action

on two bills that passed the state legislature with

ample support and that would have signicant im-

pacts on the state’s philanthropy sector.

First, Newsom vetoed a bill that would have

changed how charities operating in the state value

in-kind gifts after concerns were raised by several

philanthropic groups about the possible ramications

of the measure.

The bill—Assembly Bill 1181—passed the state

Assembly in spring 2019 and was approved by the

state Senate in the fall with bipartisan support from

legislators. It aimed to address, in part, what Cali-

fornia Attorney General Xavier Becerra has called

dubious valuations of donated pharmaceuticals and

other items by major gift-in-kind groups such as Giv-

ing Children Hope, the Catholic Medical Mission

Board, Food for the Poor and MAP International—

all of which distribute the donated drugs and other

humanitarian supplies to recipients overseas as part

of their programming.

In legal arguments, Becerra has said that the law

currently allows charities to attribute valuations of

donated drugs based on the U.S. prices regardless of

what they might actually be valued at in the country

or region where they are ultimately distributed—

a practice that is in line with generally accepted

accounting principles but that can also result in

valuations of donated goods far in excess of real

market value.

In a statement accompanying his veto, Newsom

acknowledged the problems addressed by the pro-

posed legislation but noted it would have the effect

of imposing an entirely new reporting and valuation

system for California—different from what charities

use anywhere else.

“I agree with the Attorney General that overvalu-

ation is a problem, and my Administration is open to

exploring less burdensome ways to address the issue,”

Newsom said in the statement.

Shortly after vetoing AB 1181, Newsom signed

into law a bill that will establish a new program aimed

at bolstering security within the state’s nonprot

sector.

Assembly Bill 1548, sponsored by Assembly-

member Jesse Gabriel (D-San Fernando Valley),

establishes the California State Nonprot Security

Grant Program to provide funding to nonprot or-

ganizations at risk of hate-motivated violence. The

legislation builds on an allocation in the state budget

of $15 million for security funding that was made

following the deadly attack at the Chabad Synagogue

in Poway, Calif., earlier in 2019.

(See LEGISLATION on page 8)

Alaskan funders partner to address homelessness

A consortium of health care providers, landown-

ers and nancial institutions in Alaska has pledged

some $40 million to address homelessness in the

state’s largest city of Anchorage. The funders in-

clude Premera Blue Cross Blue Shield of Alaska,

which pledged $5 million over three years; Provi-

dence Health & Services Alaska, which pledged

$15 million over ve years; and Weidner Apartment

Homes, which pledged $10 million over ve years.

These companies will partner with the Rasmuson

Foundation, a major grantmaker in the state, which

will contribute $10 million over three years to the

initiative. According to the groups involved, this is

the most signicant private investment to address

this critical issue in state history. The money will

enable more housing and other help for individu-

als and families, with a focus on fresh strategies

that have made a difference in other cities, such as

accurate tracking and follow-up of everyone who

is experiencing homelessness.

According to the groups, the work will bring in

new tools and build on existing resources that al-

ready save many lives: the shelters, meal programs

and case management services run by nonprots,

including Catholic Social Services, Bean’s Cafe and

Covenant House.

For more information, visit https://bit.

ly/2PsfApE. ■