Can Virginia put money in the state budget for a private charity like a food bank or Operation Smile?

Plain-English summary

Delegate O'Bannon asked the AG to evaluate two proposed budget amendments in the Governor's 2011 budget: $500,000 for Operation Smile (a Virginia-based nonprofit providing reconstructive surgery to children with facial deformities) and $500,000 for the Federation of Virginia Food Banks (to support a Kids BackPack program for low-income children).

The AG concluded both appropriations were unconstitutional. Article IV, § 16 of the Virginia Constitution prohibits the General Assembly from making "any appropriation of public funds, personal property, or real estate . . . to any charitable institution which is not owned or controlled by the Commonwealth." That language is broad and the exceptions are narrow.

The exceptions Article IV, § 16 carves out:

• Appropriations to nonsectarian institutions for the reform of youthful criminals.
• Authorization for counties, cities, or towns (not the state itself) to make appropriations to charities.
• A separate constitutional provision permits state assistance to non-state institutions of higher education with borrowing for facilities construction, provided the Commonwealth is not on the hook for the debt.

The Supreme Court of Virginia has enforced the rule strictly. The Court struck down a law creating a relief fund for disabled firemen and the widows and dependent children of deceased firemen, and another law providing educational opportunities for orphans of veterans killed during World Wars I and II. The pattern: noble purpose, direct benefit to a charity, unconstitutional.

The AG noted that past Governors and General Assemblies have appropriated money to private charities anyway. The opinion lists examples from the prior dozen years: SERVE Homeless Shelter, Virginia Quality of Life, Virginia Waterfront International Arts Festival, Maryview Foundation Healthcare Center, and Special Olympics of Virginia. The AG did not bless any of those, just noted that the practice was not new.

The AG also pointed out the way around the rule. The Virginia Constitution does not block all payments to charities. A state program can be designed so that the appropriation goes to a state agency that, in turn, pays a charity for goods or services rendered under the program. For example, a state medical-care program for indigent patients could pay a nonprofit hospital for treatment delivered under the program. The forbidden pattern is the direct grant for the charity's general benevolence.

Finally, the AG referenced the 1968-69 Commission on Constitutional Revision. The Commission recognized that private charities often do work that would otherwise be done by public agencies, and that some appropriations would be in the public interest. But the Commission could not find a workable line between "selective and limited" appropriations and "opening the floodgates," so the people kept the ban essentially as it was.

Currency note

This opinion was issued in 2011. 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.

Article IV, § 16 has not been substantively amended, but later AG opinions and lower court rulings may have refined the line between a direct appropriation and a payment for services. Anyone drafting a current state budget item that benefits a private charity should test the structure against both this opinion and current authority.

Common questions

Why does this rule exist?

The historical concern was that public funds would be diverted to particular charities favored by the legislature in office, with no clear public oversight. The Virginia Constitution channels charitable work through either (a) state-owned institutions, (b) local governments that can answer to their own voters, or (c) state programs where the money is paid for delivered goods or services.

Did Operation Smile and the food banks lose their funding?

The AG opinion concluded the proposed amendments were unconstitutional. Whether the General Assembly proceeded anyway is a political and budget question that the opinion did not answer. The Virginia Supreme Court would have to actually strike down an appropriation for the prohibition to have real bite, and standing rules and the timing of any challenge would matter.

Can a city or county give money to a charity?

Yes. Article IV § 16 itself authorizes the General Assembly to let counties, cities, or towns make such appropriations. The ban is on direct state appropriations, not local ones.

What if the state buys services from a charity?

That is permitted. The example the AG gave: a state indigent-care program appropriates to a state agency, which contracts with a nonprofit hospital. The hospital is paid for delivered services, not given a charitable gift.

Why are higher education institutions treated differently?

A separate constitutional provision lets the state assist non-state institutions of higher education with borrowing for facilities, on the condition that the state is not liable for the debt. That is a narrow carve-out, not a general charitable exception.

Background and statutory framework

The constitutional prohibition:

• Va. Const. art. IV, § 16. "[T]he General Assembly shall not make any appropriation of public funds, personal property, or real estate . . . to any charitable institution which is not owned or controlled by the Commonwealth."

The exceptions:

• Same provision: appropriations to nonsectarian institutions for the reform of youthful criminals, and authorization for counties, cities, or towns to appropriate to charities.
• A separate constitutional provision: assistance to non-state higher education institutions for facilities, with no Commonwealth liability.

The Supreme Court of Virginia decisions described in the opinion (without case names in the reproduced text):

• The Court struck down a law creating a relief fund "to be used by disabled firemen and relief of widows and dependent children of deceased firemen."
• The Court struck down a law providing educational opportunities for orphans of veterans killed during World Wars I and II.

The Court's test: look at whether the purpose and effect is to provide a direct benefit to the charity. The Supreme Court of Virginia "does not hesitate to strike down the appropriation, however noble its purpose might be."

The historical record:

• The opinion recounts the 1968-69 Commission on Constitutional Revision's debate. The Commission noted that private charities often perform functions that "would surely have to be performed by public bodies at public expense," but could not draft a workable carve-out. The provision survived essentially intact when the people ratified the current Constitution.

The structural lesson: a direct appropriation to a named charity is the forbidden pattern. Designing the same money flow as a state program where a state agency pays for delivered services restores constitutional validity.

Citations

• Va. Code § 2.2-505
• Va. Const. art. IV, § 16

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2011/11-002-O'Bannon.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

January 28, 2011

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable John M. O'Bannon, M.D.
Member, House of Delegates
P.O. Box 70365
Richmond, Virginia 23255-0365

Dear Delegate O'Bannon:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You inquire whether certain proposed budget amendments calling for appropriations to be made to two charitable institutions are permissible under the Constitution of Virginia.

Response

It is my opinion that the proposed budget amendments, while noble in purpose and salutary in effect, are precluded by operation of Article IV, § 16 of the Constitution of Virginia.

Background

The budget proposed by the Governor for the 2011 General Assembly includes an amendment to the state budget appropriating $500,000 for Operation Smile. Operation Smile is a nonprofit organization located in Virginia that is devoted to providing free reconstructive surgery and other healthcare to persons who suffer from facial deformities, such as cleft lips, cleft palates, tumors and burns. Operation Smile also trains local medical professionals and donates medical equipment. The proposed amendment

Provides general fund support for Operation Smile. Operation Smile is an international medical humanitarian organization dedicated to raising awareness of this life-threatening issue and providing lasting solutions that will allow children to be healed, regardless of financial standing, well into the future.

The Governor proposed another amendment to the current biennial budget to provide an additional $500,000 in state funding for the Federation of Virginia Food Banks. The amendment would be used to support the Kids BackPack initiative, which ensures nutritious meals for low-income children when school is not in session. This amendment

Provides funding for the Federation of Food Banks to purchase food, which will be distributed to needy Virginians through the Commonwealth's network of food banks. This support will assist food banks across the state meet increasing demands. It is estimated that Virginia's food banks are giving out over twenty percent more food than a year ago. None of the funding provided can be used for administrative or overhead purposes.

Such appropriations are not a new phenomenon. Past Governors and General Assemblies have enacted similar measures for some time. For example, in the last dozen years, the Virginia General Assembly has appropriated public funds for such groups as SERVE Homeless Shelter to provide food and shelter for those in need (FY 2007), Virginia Quality of Life to construct a center for medical and other services in rural Virginia (FY 2000, 2001, 2003, 2007), Virginia Waterfront International Arts Festival to promote the region as a cultural tourism destination (FY 2001), Maryview Foundation Healthcare Center for medical services and medication assistance for indigent and uninsured persons (FY 2007), and Special Olympics of Virginia for a year-round sports training and athletic competition (FY 1999, 2000, 2001, 2003, 2007).

Applicable Law and Discussion

The Virginia Constitution forbids the General Assembly from making "any appropriation of public funds, personal property, or real estate . . . to any charitable institution which is not owned or controlled by the Commonwealth." Several exceptions to this rule exist. The General Assembly can make "appropriations to nonsectarian institutions for the reform of youthful criminals and may also authorize counties, cities, or towns to make appropriations to any charitable institution or association." Furthermore, the General Assembly may assist non-state educational institutions of higher education with borrowing money for the construction of facilities, provided that the Commonwealth is not liable for the debt. The term "charitable institution" is not defined in the Constitution.

The purpose of Article IV, § 16, as its plain language indicates, is "to prohibit the appropriation of public funds . . . for charitable purposes." When an appropriation runs afoul of constitutional strictures, the Supreme Court of Virginia does not hesitate to strike down the appropriation, however noble its purpose might be. The Court invalidated a law that sought to create a relief fund "to be used by disabled firemen and relief of widows and dependent children of deceased firemen." It also declared invalid a law designed to provide educational opportunities for orphans of veterans killed during World Wars I and II. In each case, the Court looked to whether the purpose and effect of the appropriation was to provide a direct benefit to the charity.

Although the text of the provision and the cases interpreting it make it clear that appropriations to charities are not permitted, I further note that the Commission on Constitutional Revision in 1968-69 considered whether to redraft this provision. The Commission recognized that "[p]rivate charitable organizations often perform functions that, were they not the subject of private initiative, would surely have to be performed by public bodies at public expense." Therefore, "[a] reasonable argument could be made that at least some appropriations would be in the public interest." The Commission found that "the problem lay in fashioning a constitutional provision which would allow selective and limited appropriations in legitimate cases without opening the floodgates to demand by, and appropriations to, the vast number of private groups that would consider themselves equally entitled to share in the public largess." The Commission, and ultimately the people who ratified the Constitution, left the existing provision banning all such appropriations essentially undisturbed from the prior Constitution. Although one could, like the Commission, ponder whether this provision should remain in the Constitution, there is no escaping the fact that the provision was retained in the Constitution and is, therefore, binding.

The Virginia Constitution does not prohibit categorically all payments to charities from the State. The General Assembly can establish a program to provide services to its residents, and make appropriations to state agencies that, in turn, result in payments to charitable entities for goods purchased or services provided. For example, a state program designed to provide medical care for indigents could appropriate money to a state agency, which then pays a non-profit hospital for services it provided under the program. The budget amendments at issue, however, do not fit this paradigm. They are direct appropriations to a charity for benevolent purposes.

The question is not whether these proposed amendments serve noble purposes and that they would provide needed relief, unquestionably, they are and they would. The question is one of fidelity to the text of our constitution. And where the Constitution commands or forbids, the government must obey.

Conclusion

Accordingly, it is my opinion that the proposed budget amendments, while noble in purpose and salutary in effect, are precluded by operation of Article IV, § 16 of the Constitution of Virginia.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General