Charities fear competition with Ohio government for donors

COLUMBUS (AP) — Some nonprofit fundraisers are concerned they might be forced in the coming months to compete with Ohio state government for donations.

A last-minute budget amendment pushed by Gov. Ted Strickland would allow state departments to create and run their own nonprofit agencies to raise money and seek in-kind contributions.

United Way leaders and others say the state should stay out of their territory. Strickland says nonprofit dollars could help state government function more efficiently.

The provision sailed through the Democrat-controlled Ohio House in April but may have problems in the Senate, which has a Republican majority.

“It sounds to me like a conflict of interest to be doing those types of things within state agencies,” said Senate President Bill Harris, an Ashland Republican.

Catherine Turcer, director of Ohio Citizen Action’s Money and Politics Project, called the idea “a road map for taking advantage of the state of Ohio.”

She said the amendment could spur abuse and favoritism by enabling businesses to buy favors from state agencies that issue licenses and permits. For instance, a manufacturer needing permits to release chemicals into the air and water might try to speed up the process by donating to the Environmental Protection Agency’s nonprofit arm, she said.

“It would be another way that wealthy interests could affect policymaking,” she said. “It’s time to put the brakes on a really bad idea.”

Strickland spokeswoman Amanda Wurst said language was added at the suggestion of the state Ethics Commission to guard against conflicts of interest.

She said companies that do business with state agencies would not be able to donate to those agencies, and donors and employees of state-run nonprofits would be required to disclose potential conflicts.

“The state has the ability to turn money down if there are strings attached and to return money,” Wurst said.

United Way of Ohio has asked the Senate to remove the nonprofit language from the bill.

Michael Benz, president and chief executive officer of United Way of Greater Cleveland, said many nonprofits fear if Ohio enters fundraising, it will hurt their own ability to bring in donations.

He said a solicitation letter signed by the governor or another state official would carry significant influence.

“The pie is only so big, particularly in a difficult economy,” Benz said.

Strickland said he does not intend to compete with existing nonprofits.

“It’s a different kind of nonprofit activity we are envisioning,” he said.

For example, citizens and businesses concerned about slow regulatory decision-making could contribute to a fund that would expand training in the “kaizen process,” Strickland said.

Kaizen is a Japanese management system that streamlines efficiency by getting workers to help solve problems and reduce wasted time and paperwork. Strickland said the method has achieved good results so far in Ohio.