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East Portland neighborhood associations operating illegally

LEE PERLMAN
THE MID-COUNTY MEMO

Are east Portland neighborhood associations all illegal? Technically, yes, says East Portland Neighborhood Office Executive Director Richard Bixby, but it is not their fault.

A handful of the City's 95 recognized neighborhood associations are 501(c)3 non-profit corporations, able to offer tax deductions for donations. Most of the rest fall into a different non-profit status. Because they handle relatively small amounts of money, they do not have to make yearly reports to the IRS - or did not until the year 2006, when the law was changed.

“They all had an automatic revocation of their incorporation,” Bixby says. “We just didn't catch it.” The office is now working to re-incorporate these groups.

EPAP is also, as part of a citywide effort by the Portland Office of Neighborhood Involvement, to correct discrepancies in bylaws. One that affects a few groups is the definition of a quorum for meetings. Some associations' bylaws say, in effect, “A quorum is whoever shows up.” As far as the City is concerned, this is not acceptable. Neighborhoods groups have wide latitude in this area, but a quorum must be “either a number or a formula that arrives at a number.” An example of the second case would be saying that a majority of current board members is a quorum for a board meeting. An example of the first case would be that 15 people eligible to be members is a quorum for a general meeting.

Nearly all neighborhood groups are and always have been in violation of state law with regard to their definition of membership, according to Cindy Comfer, an attorney and expert on non-profit regulations who recently conducted free workshops for neighborhood leaders.

ONI regulations say that, as a minimum, anyone who lives, owns property or owns a business within the boundaries of a neighborhood group is a member of that group. Some associations go beyond this and offer membership to people who work in the neighborhood; southeast's Richmond Neighborhood Association goes so far as to say anyone with “a demonstrated interest in the welfare of the neighborhood” is a member.
This does not fit the letter of the law for non-profits, Comfer says. To be counted as a member, a person must give his or her permission. Circulating sign-in lists at each meeting, and keeping track of these lists, can easily attend to this.
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