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Pennsylvania House of Representatives
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: January 14, 2015 11:21 AM
From: Representative Anthony M. DeLuca
To: All House members
Subject: Prohibition of Nonprofit Board Compensation (HB 365 of 2013)

In the near future, I will re-introduce legislation (HB 365 of 2013) prohibiting the compensation of board members who serve on Executive Boards for not-for-profit Blues insurance entities, as well as Executive Boards for purely public charities and other nonprofit organizations. It appears counterproductive to the intent of nonprofits to financially compensate volunteers to work on a nonprofit organization or the board of a charitable organization. Compensation of board members creates unavoidable conflicts of interest and diverts resources otherwise focused on achieving the mission of the charity. These organizations enjoy significant tax and other benefits due to their charitable status.

After reading a news article detailing the compensation distributed to Highmark board members for their service on a not-for-profit board, I was left troubled. As we continue to see rate increases in the market place for health insurance, there is simply no sound justification for exorbitant dollars being doled out to individuals meeting only a handful of times per year. According to the Pittsburgh Tribune Review, the Highmark board compensation totaled a staggering $1.3 million in 2010. Given that many of our constituents are just trying to make ends meet, I consider these gratuitous payments to be disgraceful.

With many Pennsylvanians currently experiencing dire financial hardships, I find it difficult to understand the rationale for compensating board members in the nonprofit arena.

I invite you to join me as a co-sponsor of this legislation. Thank you.

Introduced as HB751