Can a Mississippi county lease a privately-owned building and let a local food-pantry nonprofit use the space rent-free?
Plain-English summary
A nonprofit food bank in Quitman, Mississippi, has been providing free food to needy residents of Clarke County since 1989. Funded by donations, grants, and food from the Mississippi Food Network, the nonprofit outgrew its current space. The County wanted to help by leasing space in a private building and letting the nonprofit use that space rent-free or at nominal rent.
The County's attorney asked whether this would be legal.
The AG said no. The structure, however well-intentioned, runs into Section 19-3-40(3) (prohibiting use of public funds for any private purpose or grant of donations) and Article 4, Section 66 of the Mississippi Constitution (prohibiting donations except by two-thirds vote of each chamber).
The AG distinguished prior opinions:
- MS AG Op., Ford (Nov. 27, 2018): A county can let a group use a county-owned community center rent-free if the board finds, on its minutes, that the event constitutes sufficient public service to constitute consideration to the County. The County owns the building. The "donation" is access, not money.
- MS AG Op., Gamble (Feb. 6, 2004): Counties may allow private, temporary use of public buildings under uniform policies if any user reimburses the county for utilities and custodial services.
What the County here proposed is structurally different. It involves the County signing a lease for private space and effectively absorbing rent costs that the nonprofit would otherwise pay. That is using public funds to underwrite a private operation. Section 19-5-93 lets counties donate to certain charitable and patriotic societies in narrow ways, but not in this manner.
What this means for you
If you're a Mississippi county or city wanting to help a nonprofit
The county-owned vs. privately-owned distinction matters. What you can do:
- Allow the nonprofit to use a county-owned building or space rent-free, after the board makes a factual finding (on its minutes) that the use constitutes sufficient public service to be consideration for the County. Document the finding specifically.
- Adopt a uniform policy allowing private, temporary use of public spaces with reimbursement of utilities and custodial costs.
- Donate under specific statutory authority where it exists (e.g., to chartered chapters of certain charitable organizations under § 21-19-67 for municipalities, or limited categories under § 19-5-93 for counties).
- Provide in-kind support that doesn't convert to a private subsidy: a county vehicle for transport (under specific authority), staff coordination, public notice, free use of meeting space, etc.
What you cannot do:
- Pay rent on private space for a nonprofit.
- Pay any operating cost of a nonprofit unless the law specifically authorizes it.
- Use creative structures (sublease, indirect payment, etc.) to achieve the same result.
If you're a nonprofit looking for help from local government
Recognize the legal frame. Counties cannot underwrite your private lease. What you can ask for:
- Use of county-owned facility space.
- Coordination with county programs that serve overlapping populations.
- Specific donations authorized by statute (consult county counsel about whether your organization qualifies).
- Help building support: county-led publicity, in-kind volunteer help, partnerships with other public-private programs.
- For long-term needs, consider partnerships with municipalities (which have parallel but slightly broader authorities under § 21-19-67) or with public school districts that may have specific authorities to coordinate with food banks for student-serving programs.
If you're a state auditor field examiner
A county lease for nonprofit space is a clean compliance flag. Look at how the lease is structured, whether the nonprofit is the actual occupant, and whether the County is paying. The structure violates Section 19-3-40(3) and the constitutional donation prohibition.
If you're a Mississippi legislator
The legislature has authorized targeted donations under § 19-5-93 (county) and § 21-19-67 (municipal), but these are narrow lists. If supporting community food banks is a policy goal, the cleanest path is to expand the authorized donation list. Without that expansion, this opinion stands as a clear "no" for the proposed structure.
Common questions
Q: Can the county donate funds to the nonprofit directly?
A: Only if a specific statute authorizes it. Section 19-5-93 lists categories (certain charitable and patriotic organizations), but the food-bank scenario in this opinion did not fit. Without specific authority, direct donation is barred by Section 66.
Q: What if the nonprofit pays fair market rent for the space?
A: Then the County is not subsidizing the lease, and the donation problem disappears. But the question becomes why the County is the leaseholder at all. If the nonprofit pays fair rent, why not rent directly?
Q: Can the county buy the building and let the nonprofit use it?
A: Owning a building and letting a qualified nonprofit use it as a public-service activity is a different scenario, governed by the Ford and Gamble line of opinions. The board would still need a public-service finding on its minutes, and the use would have to be of a public-purpose nature.
Q: Is there a way to structure this lawfully?
A: Possibilities to discuss with counsel:
- The County could buy or already own a suitable building, then let the nonprofit use it under the public-service-finding model.
- The nonprofit could become a contractor providing a service (food distribution to county residents who qualify under a county program), with the contract paying for the service. The "rent" would not be a donation; it would be procurement of a service.
- The County could apply for federal grants (e.g., CDBG) that fund nonprofit space and pass through the funding under federal rules.
Each path has its own legal complications. None of them is "lease private space and give it to the nonprofit."
Q: What about Section 19-5-93?
A: Section 19-5-93 authorizes county donations to certain charitable and patriotic societies and causes. The AG specifically noted that "that authority does not extend to the type of donation in your request." So this nonprofit would not qualify under § 19-5-93.
Background and statutory framework
Mississippi law is structurally hostile to municipal and county donations to private entities. Three layers reinforce that posture:
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Article 4, Section 66 of the Mississippi Constitution. Bars laws granting donations or gratuities except by two-thirds vote of each chamber of the legislature. The provision was originally aimed at preventing legislative cronyism, but it applies to local entities too.
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Section 19-3-40(3). Prohibits counties from using public funds for any private purpose or granting any donation. This is the statutory backbone for the principle the AG applied here.
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Specific authorizing statutes. The legislature has carved out narrow exceptions: § 19-5-93 (county donations to charitable and patriotic societies), § 21-19-67 (municipal donations to specific organizations like Boys and Girls Clubs and the American Red Cross), some donations to volunteer fire departments, etc. These are exhaustive in their scope.
What the AG has built around this framework is a "use vs. donation" distinction. A board allowing a nonprofit to use county-owned space rent-free is not really donating money; it is letting an asset already owned by the public serve a public-related purpose. Structuring it that way (with a specific public-service finding) keeps the arrangement within constitutional bounds. But adding a step where the County leases space for the nonprofit converts the arrangement into a financial subsidy of a private operation.
Citations and references
Statutes and constitutional provisions:
- Miss. Code Ann. § 19-3-40(3) (prohibition on county donations and use of public funds for private purposes)
- Miss. Code Ann. § 19-5-93 (limited authority for county donations to charitable and patriotic societies)
- Miss. Const. Art. 4, § 66 (donation prohibition)
Prior AG opinions referenced:
- MS AG Op., Krohn (June 13, 2008)
- MS AG Op., Ford (Nov. 27, 2018), county-owned community center may be used rent-free with public-service finding
- MS AG Op., Gamble (Feb. 6, 2004), private use of public space subject to uniform policy and cost reimbursement
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2023/03/W.Hammack-January-31-2023-Lease-of-Private-Building-by-County-for-Nonprofit.pdf
Original opinion text
January 31, 2023
William C. Hammack, Esq.
Attorney, Clarke County Board of Supervisors
1724A 23rd Avenue
Meridian, Mississippi 39301
Re: Lease of Private Building by County for Nonprofit
Dear Mr. Hammack:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, a Mississippi nonprofit corporation with its offices in Quitman has provided free food for needy individuals in Clarke County since 1989. Funding for the nonprofit is provided by donations or grants, and food is provided by the Mississippi Food Network and/or purchased locally. You state that the nonprofit has outgrown its current facility, and the County is considering leasing space in a privately-owned building and allowing the nonprofit to utilize the space for its operations. The nonprofit is a private organization.
Question Presented
Is the Clarke County Board of Supervisors authorized to lease a privately-owned building or space within that building and allow the nonprofit to utilize the building or space for its operations rent-free or for nominal rent?
Brief Response
The County may not spend public funds to lease space in a privately-owned building and subsequently allow the nonprofit to exclusively utilize the private building or space for its operations rent-free or for nominal rent because to do so would amount to an unlawful donation.
Applicable Law and Discussion
Mississippi Code Annotated Section 19-3-40(3) prohibits counties from using public funds for any private purpose or granting any donation. See MS AG Op., Krohn at *2 (June 13, 2008). Additionally, Section 66 of the Mississippi Constitution prohibits the donation of public funds or property to private entities and provides: "No law granting a donation or gratuity in favor of any person or object shall be enacted except by the concurrence of two-thirds of the members elect of each branch of the Legislature, nor by any vote for a sectarian purpose or use." Id.
While Section 19-5-93 authorizes the County to donate funds to certain charitable and patriotic societies and causes, that authority does not extend to the type of donation in your request. We have previously opined that a county board of supervisors could allow groups to use a county-owned community center without paying rent if it finds on its minutes "that a community event constitutes sufficient public service to constitute consideration to the County. . . ." See MS AG Op., Ford at 2 (Nov. 27, 2018); see also MS AG Op., Gamble at 1 (Feb. 6, 2004) (opining that counties may allow private, temporary use of space in a public building so long as a constitutionally sound, uniform policy is implemented and any groups reimburse the county the cost of utilities and custodial services "so that the county is not contributing public funds toward a private purpose."). However, you are asking about the County's authority to spend public funds to pay for a lease in a privately-owned building and subsequently grant a nonprofit the exclusive use of the space without paying rent or at a minimum, paying a nominal fee. There is no authority for the County to do such.
Therefore, we are of the opinion that the County may not spend public funds to lease a privately-owned building or space within it and subsequently allow the nonprofit to utilize the building or space for its operations rent-free or for nominal rent. Such action by the County would amount to an unlawful donation.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Gregory Alston
Gregory Alston
Special Assistant Attorney General