Could the South Carolina State Museum provide free office space to its nonprofit foundation?

Plain-English summary

In 2000, an assistant South Carolina Attorney General considered a proposed House appropriation proviso that would let the State Museum Commission provide office and administrative space without rent reimbursement to the Museum Foundation's chief executive and staff. He concluded that the arrangement would not appear to violate state law or the constitution if the General Assembly passed the proviso.

The conditional point mattered. Earlier opinions had rejected a university's transfer or loan of public funds to a private foundation because there was no statutory authority for it. Passage of the museum proviso would supply that authority. The author also reasoned that the foundation, organized solely to support the State Museum, served the museum's valid public purpose. The letter identified itself as an informal opinion of the assistant attorney general.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the opinion say the Museum Foundation could get free office space even without the proviso? A: No. Its conclusion assumed the General Assembly would pass the proposed proviso, providing statutory authority for the arrangement.

Q: Why did earlier foundation opinions reach a different result? A: The opinion described earlier university-foundation arrangements as lacking statutory authority. It said the proposed museum proviso would remove that problem if enacted.

Q: Why did the author consider rent-free space a public purpose? A: He quoted the foundation's bylaws, which said it existed to benefit and carry out the State Museum's purposes, including supporting its programs, education, and research.

Background and legal framework

Representative Herb Kirsh asked whether the proposed proviso was permissible. The opinion addressed both the need for statutory authorization and the state constitutional prohibition against pledging or loaning public funds to a private entity. It applied prior Attorney General reasoning that a contribution to a private nonprofit can be constitutional when used to promote a valid public purpose. The conclusion was expressly conditional and specific to the Museum Foundation described in the letter.

Citations and references

• Proposed House appropriation proviso: quoted in the opinion; the opinion did not establish whether it was enacted.
• Attorney General opinions dated May 21, 1993, August 10, 1973, and May 13, 1996: prior reasoning described in this opinion.

Official title

Asking whether a proviso contained in the House Appropriation Bill is permissible under state law.

Requester

The Honorable Herb Kirsh, Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/may-1-2000/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/00may1kirsh.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLI E CO NDON
ATTOR NEY GEN ERAL

May 1, 2000
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The Honorable Herb Kirsh
Member, House of Representatives
Box 31
Clover, South Carolina 29710

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RE:

Informal Opinion

Dear Representative Kirsh :
You have asked whether a proviso contained in the House Appropriation Bill is permissible under state law. The proviso reads as follows: "[A]ppropriate office and administrative space for the South Carolina Museum Foundation Chief Executive Officer and staff may be provided by the Museum Commission without rent reimbursement." You advise that you "remember a few years ago all foundations that used colleges and universities had to pay rent and the college could not subsidize them. I believe this was the opinion of another Attorney General, and I think that was a good policy. " This Office has previously concluded that a university may not transfer or loan public funds to a private non-profit foundation. Ops. Any. Gen. dated May 21 , 1993 and August 10, 1973. This conclusion was reached because no statutory authority existed which permitted a university to enter into such an arrangement. In the Museum Foundation ' s case, however, if the General Assembly passes the proviso, there will be statutory authority for the arrangement, thus alleviating the problem found in the university opinions. The only remaining question is whether providing rent-free office and administrative space to the Museum Foundation violates the constitutional prohibition against pledging or loaning public funds to a private entity. This Office has consistently stated that the state constitution is not violated when public funds are donated or contributed to a private, non-profit corporation, if the funds are used in the promotion of a valid public purpose. Op. Any. Gen. dated May 13, 1996. The purpose of the Museum Foundation, as stated in its by-laws, is as follows:
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The Honorable Herb Kirsh
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May 1, 2000

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The Foundation is organized and at all times shall operate exclusively for the benefit of, to perform the functions of, or to carry out the purposes of the South Carolina State Museum (hereinafter referred to as the "supported organization") by (i) assisting in the creation and continued operation of a State Museum, (ii) promoting the program and welfare of such State Museum, (iii) furthering education and research, mobilizing expert professional advice, and utilizing all available resources in order to accomplish the purpose for which the supported organization has been established, to with: '"including but not restricted to the history, fine arts, and natural history and the scientific and industrial resources of the State .... " Since the State Museum operates for a valid public purpose, it would seem that a private, non-profit corporation established solely to benefit the State Museum would also operate for a valid public purpose. A contribution or donation of public funds to a private, non-profit corporation which serves a public purpose is constitutionally valid. Therefore, it would not appear that the constitution or state law would be violated if the Museum Foundation is provided rent-free office space. This letter is an informal opinion only. It has been written by a designated assistant attorney general and represents the position of the undersigned attorney as to the specific questions asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With best personal regards, I am

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Paul M. Koch
Assistant Attorney General