100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5479

 

Introduced , by Rep. Daniel J. Burke

 

SYNOPSIS AS INTRODUCED:
 
805 ILCS 105/Art. 14A heading new
805 ILCS 105/114.50 new
805 ILCS 105/114.55 new
805 ILCS 105/114.60 new
805 ILCS 105/114.65 new

    Amends the General Not For Profit Corporation Act of 1986. Provides that the Secretary of State shall establish a system for grading corporations organized under the Act on the basis of the corporation's cost of fundraising, administrative expenses, and expenses for services for the corporation's designated clientele. Requires corporations to report to the Secretary information necessary for grading the corporations. Establishes minimum criteria for grading, including the corporation's cost of fundraising disregarding corporation revenue derived from investment income, sales proceeds, program service revenue, and other revenue derived as a result of activity other than fundraising. Provides that corporations failing to meet a minimum score shall be deemed ineligible for grants made available through the expenditure of State funds. Requires the Secretary to post the grading results on the Secretary's website.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5479LRB100 17404 JLS 32570 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The General Not For Profit Corporation Act of
51986 is amended by adding Article 14A as follows:
 
6    (805 ILCS 105/Art. 14A heading new)
7
ARTICLE 14A.
8
NOT-FOR-PROFIT GRADING; REPORTS

 
9    (805 ILCS 105/114.50 new)
10    Sec. 114.50. Purpose. It is the purpose of this Article to
11establish a methodology to enable the public to evaluate the
12performance of domestic and foreign corporations with respect
13to the use of money received by the corporation as donations
14and as grants from taxpayer sources. It is also the purpose of
15this Article to enable donors and grant providers to direct
16donations and grants to a corporation based upon the priorities
17demonstrated by the corporation's use of the donations and
18grants received and to enable the donors and grant providers to
19reduce donations and grants to corporations that expend a
20disproportionate amount of money on administrative costs.
 
21    (805 ILCS 105/114.55 new)

 

 

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1    Sec. 114.55. Not-for-profit grading standards.
2    (a) The Secretary of State shall adopt rules to establish
3grading standards to effectuate the purposes of this Article.
4The grading standards must, at a minimum, provide:
5        (1) a mechanism that requires the disclosure of the
6    corporation's cost to raise $100 of cash donations and
7    grants disregarding corporation revenue derived from
8    investment income, sales proceeds, program service
9    revenue, and other revenue derived as a result of activity
10    other than fundraising;
11        (2) a mechanism that requires the disclosure of the
12    corporation's expenditure on services to its defined
13    clientele per $100 of cash donations and grants received
14    disregarding corporation revenue derived from investment
15    income, sales proceeds, program service revenue, and other
16    revenue derived as a result of activity other than
17    fundraising; and
18        (3) a disclosure of the amount of money the corporation
19    expends for services to its defined clientele and the
20    amount of money expended for administrative purposes.
21    The grading standards shall provide for the grading of
22corporations on a scale of 0 points to 100 points with 0 points
23being the lowest grade and 100 points being the highest grade.
24The scale shall be divided into segments of 4 points.
25    The grading standards may include such other criteria as
26the Secretary of State deems necessary.

 

 

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1    (b) The Secretary of State shall make available on the
2Secretary's website the results of the grading of corporations
3under this Article.
 
4    (805 ILCS 105/114.60 new)
5    Sec. 114.60. Report to Secretary of State. A corporation
6shall report to the Secretary of State the information required
7by the Secretary of State for purposes of grading corporations
8under this Article.
 
9    (805 ILCS 105/114.65 new)
10    Sec. 114.65. Effects of grading.
11    (a) The Secretary of State shall place a corporation that
12receives a grade of at least 26 points and not more than 40
13points on probation for a period of 2 years, during which the
14corporation shall endeavor to increase its score to 60 points
15or better. A corporation that fails to increase its score as
16provided in this subsection is not eligible for the award of
17any grant made available through the expenditure of State
18funds.
19    (b) A corporation that receives a score of less than 26
20points is ineligible for the award of any grant made available
21through the expenditure of State funds for a period of 4 years.
22    (c) Corporations that receive a score of 90 or more points
23are eligible to receive additional grants made available
24through the expenditure of State funds that otherwise would

 

 

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1have been granted to corporations deemed ineligible under this
2Article. The additional grants, if made, shall be awarded in
3the following manner:
4        (1) 50% of the funds available under this subsection
5    for grants available through the expenditure of State funds
6    may be granted to corporations that receive a score of 96
7    points or more;
8        (2) 30% of the funds available under this subsection
9    for grants available through the expenditure of State funds
10    may be granted to corporations that receive a score of 91
11    points or more, but fewer than 96 points; and
12        (3) 20% of the funds available under this subsection
13    for grants available through the expenditure of State funds
14    may be granted to corporations that receive a score of 86
15    points or more, but fewer than 91 points.