Q&A: Nonprofits and the Open Door Law


From the Newton County Enterprise:

Q: Newton County Community Services is a non-profit private organization that uses public funds to operate. They have scheduled a by-law committee meeting closed to the public and have advertised it as such. Is that proper? What is the rule for these non-government organizations that use public funds as far as their board meetings? This has been an ongoing issue between county government officials and the agency. They’ve also scheduled their regular board meeting, which is open to the public, and have advertised that an executive meeting will follow, which will not be open to the public. The reason for the executive session isn’t given. 

A: Generally, nonprofit private entities are not subject to the state’s Open Door Law, but there are situations that can bring them under the scope of the statute:

• Was the entity created by the government? If so, you could be in business.

• Check to see how the board is constituted. Are they appointments made by governing bodies?

• Is their budget subject to approval by a public agency?

• Does a large part of their budget come from a subsidy from a government agency or agencies? A subsidy is different from a contract, where the nonprofit receives taxpayer dollars in exchange for a service done for or on behalf of the government agency. If the entity goes to the city council, for example, every year and asks for $10,000 to help fund their operation, which does wonderful things for the community, and the council agrees – that’s a subsidy because there is no requirement that the nonprofit do anything. In contrast, if the city council gives the local economic development corporation $20,000 to perform economic development tasks for the city, that’s a fee for services arrangement, not a subsidy.

Those are some items you have to look at to determine whether Newton County Community Services becomes a public agency under the Open Door Law.

The other option is that Newton County Community Services can voluntarily decides to abide by the Open Door Law provisions. Yyou couldn’t take them to court if they stray, but it could be a violation of their own procedures if they decided to make it their policy.

If they were subject to the Open Door Law, you’d have to look at the subject matter they intend to discuss behind closed doors to determine whether it would be illegal. Under the statute, notice of an executive session has to quote the code provision describing the subject matter that can be discussed behind closed doors.

It sounds like they are calling executive sessions without giving a legal basis for closing the doors. If they ARE a public agency that would be a violation. If they are NOT subject to the Open Door Law, when they meet in open or behind closed doors is up to them.

Contact Steve Key, HSPA executive director and general counsel, with media law questions at skey@hspa.com or (317) 624-4427.