Prohibits a charitable organization from using any charitable donations that the charitable organization receives to make any sort of payment that arises as a term of a confidentiality agreement or closed settlement agreement.
Summary
A07164 would amend the New York Executive Law to prohibit charitable organizations registered in the state from using charitable donations to pay amounts required under confidentiality agreements or closed settlement agreements. The bill defines those agreements broadly to include private or court-ordered settlements that restrict the possession, disclosure, or dissemination of information about any part of the agreement.
The measure applies to any such agreements or proposed agreements entered into on or after its effective date, and it would take effect immediately if enacted. In practical terms, it would restrict how charities may use donated funds when resolving disputes, particularly where settlements include nondisclosure or confidentiality terms.
Impact
The bill would add a new section 172-g to the Executive Law, creating a state-level restriction on the use of charitable donations by registered charitable organizations. It would not ban confidentiality or settlement agreements themselves, but it would bar charities from funding payments arising from those agreements with donated money, potentially affecting how nonprofits handle litigation, employment disputes, donor restrictions, and other confidential resolutions. Charitable organizations would need to segregate or otherwise avoid using donation funds for these payments, and the rule would apply prospectively to agreements entered into on or after the effective date.
Sentiment
Based on the bill text and the absence of recorded committee debate or votes in the provided materials, the overall sentiment appears to be precautionary and accountability-focused rather than overtly partisan. The proposal suggests concern about transparency and the proper use of charitable donations, implying support for greater oversight of nonprofit spending. Because no voting history or transcript is available, there is no evidence here of formal support or opposition from legislators, advocacy groups, or committee members.
Contention
The main point of contention is likely to be whether the bill unduly limits charities’ flexibility in settling disputes, especially where confidentiality is important to protect victims, employees, donors, or organizational reputations. Supporters would likely argue that donor funds should not be used to finance secrecy around settlements, while critics may contend that the restriction could make it harder for nonprofits to resolve claims efficiently or could interfere with legitimate privacy interests. Another possible issue is the breadth of the definitions, which could capture a wide range of settlement arrangements.
Same As
Prohibits a charitable organization from using any charitable donations that the charitable organization receives to make any sort of payment that arises as a term of a confidentiality agreement or closed settlement agreement.