Nonprofit Law Prof Blog

Two recent news stories underline the importance of crowdfunding for supporting Ukraine and Ukrainians. The N.Y. Times reports that Ukrainian appeals to private individuals and companies have led to contributions of numerous items that have military applications, including drones, night vision scopes, body armor, rifles, and ammunition. The Chronicle of Philanthropy reports that the Ukrainian government is enhancing its crowdfunding efforts to keep support flowing even as the Russian invasion of Ukraine passes the three-month mark.

And even the incredibly busy IRS has taken the time to ease ways of supporting Ukraine. Notice 2022-28 provides guidance on how employers can adopt leave-based donation programs to aid citizens and residents or Ukraine, individuals presently in Ukraine, or refugees from Ukraine. Importantly it states:

Employer leave-based donation payments made by an employer before January 1, 2023, to section 170(c) organizations to aid victims of the further Russian invasion of Ukraine (qualified employer leave-based donation payments) will not be treated as gross income or wages (or compensation, as applicable) of the employees of the employer. Similarly, employees electing or with an opportunity to elect to forgo leave that funds the qualified employer leave-based donation payments will not be treated as having constructively received gross income or wages (or compensation, as applicable). 

Lloyd Mayer

May 21, 2022 in Federal – Executive, In the News, International | Permalink | Comments (0)

In Reserve Mechanical Corp. v. Commissioner, the U.S. Court of Appeals for the Tenth Circuit upheld the Tax Court's decision affirming the IRS' decision that the company did not qualify as tax-exempt status under section 501(c)(15). Here is the court's summary of the decision:

Reserve Mechanical Corp. appeals the decision of the Tax Court affirming the decision of the Commissioner of Internal Revenue that it did not qualify for an exemption from income tax as a small insurance company and that the purported insurance premiums it received must therefore be taxed at a 30% rate under I.R.C. § 881(a). We hold that the record supports the Tax Court’s decision that the company was not engaged in the business of insurance. The court had two grounds for deciding that Reserve was not an insurance company. First, it determined that Reserve had not adequately distributed risk among a large number of independent insureds—a hallmark of any true insurance company. Virtually all the insured risk was that of one insured, a company that had the same ownership as Reserve itself. To appear to distribute risk, Reserve entered into an insurance pool with other purported insurance companies, each owned by an affiliate of its insured, but the arrangement lacked substance and the pool itself did not distribute risk. Second, the Tax Court determined that the policies issued by Reserve were not insurance in the commonly accepted sense. For example, the premiums were not the result of arm’s-length transactions and were not reasonable, and Reserve was not operated in the way legitimate insurance companies operate. In addition, Reserve argues that if it was not an insurance company, the premiums it received must be treated as nontaxable capital contributions. We also reject that argument.

The decision is significant in part because there are number of other, similar cases, on appeal involving other companies, and the possibility of more IRS action in this area with this victory for the government to support them. For a detailed analysis, see this Forbes article.

Lloyd Mayer

May 21, 2022 in Federal – Judicial, In the News | Permalink | Comments (0)

The Minnesota Star Tribune reports that a state court judge has order the removal of one of the trustees for the Otto Bremer Trust, but has also refused the Minnesota Attorney General's request to remove two other trustees. The judge also held the trustees acted properly by considering whether sell the bank Bremer Financial (commonly known as Bremer Bank). The story provides a copy of the 103-page opinion. 

I have not had a chance to review the opinion - busy grading exams this week - but here is a helpful analysis from the law firm of Nilan Johnson Lewis.

Lloyd Mayer

May 21, 2022 in In the News, State – Judicial | Permalink | Comments (0)

District of Columbia Attorney General Karl A. Racine announced earlier this month that "the Trump Organization and Donald Trump’s Presidential Inaugural Committee (PIC) will be required to pay $750,000 to the District to resolve allegations that the PIC, the Trump International Hotel, and the Trump Organization illegally misused nonprofit funds to enrich the Trump family. Those funds will then be redirected to two nonpartisan nonprofit organizations – Mikva Challenge DC and DC Action – that promote civic engagement of youth in the District."

The payment settles a lawsuit filed by the AG alleging that Inaugural Committee provided improper benefits to the Trump Organization and Trump family members in a variety of ways, including by overpaying for event space, throwing a private party, and repaying a Trump Organization debt. The Consent Motion for the settlement includes language common to such docuoments stating that the resolution is made "without it being in any way deemed or construed as an admission of wrongdoing, unlawful conduct, or liability on the part of Defendants." 

Coverage: NPR, Reuters, Washington Post.

Lloyd Mayer

May 21, 2022 in In the News, State – Executive | Permalink | Comments (0)

The BLM Global Foundation has recently attracted a steady stream of stories raising questions about its finances and transparency, especially after New York Magazine reported it had bought a $6 million house. The organization has now released its first Form 990 since obtaining IRS recognition under section 501(c)(3) and separating from its fiscal sponsor, which it first shared exclusively with the Associated Press. Numerous other news outlets have reported on the filing, including New York Magazine, the N.Y. Times, and the Times of London.

The filing reveals that BLM Global Foundation raised almost $80 million and spent a little under $38 million, including $26 million in grants mostly to other section 501(c)(3) organizations. Besides the house, it held the rest of its almost $42 million in assets in publicly traded securities ($32 million) and cash. It only had two employees during calendar year 2020 and only one voting member of its board of directors as of the end of its fiscal year on June 30, 2021. The above news reports state it now has three directors, which still is relatively small for a public charity with tens of millions of dollars in revenues, expenses, and assets, as well as a very high public profile. 

Not surprising given these small numbers of employees and board members, the Foundation paid numerous outside organizations for services. But as the above news reports detail, many of the organizations were owned and run by people with close ties to Foundation insiders, including over $2.1 million paid to a consulting firm owned by a now board member, almost $1 million paid to a limited liability company owned by the father of the founder and former executive director's child, and over $800,000 paid to a security firm owned by the brother of the founder and former executive director. While the Form 990 says a conflict of interest policy is in place, the Foundation would be well advised to also institute a bidding process for selecting vendors to ensure that ones with connections to insiders are not unduly favored (and improve the optics of these relationships).

The press coverage has attracted scrutiny from two state Attorneys General. In Indiana, the Indianapolis Star and other outlets report that AG Todd Rokita has sued the Foundation for allegedly failing to responding to requests for information. In Ohio, the above AP story reports that AG Dave Yost has also opened an investigation.

Lloyd Mayer

May 21, 2022 in In the News | Permalink | Comments (0)

Lynn D. Lu (CUNY) has published Who’s Afraid of Bob Jones? “Fundamental National Public Policy” and Critical Race Theory in a Delicate Democracy in the CUNY Law Review. Here is the abstract:

Calls to defund critical race theory aim to freeze civil rights progress where it stood decades ago with the formal prohibition of intentional race discrimination in federally funded programs. In the notorious case of Bob Jones University v. United States, 461 U.S. 574 (1983), the U.S. Supreme Court confronted the federal tax exemption for public charities and ruled that the Internal Revenue Service (IRS) properly withheld tax-exempt status from otherwise qualifying private religious schools that denied admission to students based on race. In particular, the Bob Jones Court recognized the “fundamental national public policy” against racial segregation as a compelling government interest outweighing any burden on private schools’ religious exercise. However, the Court left unresolved vital questions of how (or indeed, whether) to allocate public resources affirmatively to foster diversity, equity, inclusion, or accessibility in democratic society.

This Article examines the lessons of Bob Jones for civil rights advocates as informed by critical race theories that have developed amid a federal-court retreat from enforcement of antidiscrimination norms. It also explores the case’s symbolic value for conservatives motivated to prevent its expansion, even as the Bob Jones Court narrowly constrained its own decision’s impact by refusing to engage a number of crucial substantive questions: namely, the role of pluralism in enforcing civil rights against First Amendment claims, the viability of race-conscious remedies for racial discrimination, and the visibility of economic justice in civil rights claims. This Article ultimately concludes that the legal reorientation critical race theorists have helmed in the wake of Bob Jones remains crucial for identifying and challenging ongoing power disparities in and through every level of democratic government and society.

Lloyd Mayer

May 21, 2022 in Publications – Articles | Permalink | Comments (0)

The ABA Nonprofit Organizations Committee has announced its annual Outstanding Nonprofit Lawyer Award recipients.  They are:

Vanguard Award: Beth Kinglsey

Outstanding Lawyer Award: Samuel Maizel

Outstanding In-House Counsel Award: Lisa Johnsen

Outstanding Young Lawyer Award: Judith Kim

Outstanding Young Lawyer Award: Jason Qu

Congratulations to all of the recipients! You can read more about the awards and recipients here.

Samuel D. Brunson

May 12, 2022 in In the News, Other | Permalink | Comments (0)

In the aftermath of the Dobbs leak, there has been a lot of discussion about what a post-Roe world would look like. Understandably, the vast majority of that discussion has surrounded women's autonomy and reproductive rights, and what other rights we might lose under Alito's reasoning.

It may be worth taking a look at who would be shaping a post-Roe world. And at least one major player, it seems, might be the Foundation to Abolish Abortion, a Texas-based 501(c)(3).

FAA seems to be a fairly new organization; it received its exemption in 2020. And for 2019 and 2020, it reported less than $50,000 in gross receipts.  It hasn't provided any significant amount of information to Guidestar or Propublica, but as best I can tell, it is exempt as an educational organization. (If anybody has a copy of FAA's Form 1023, I'd love to see it! I tried to submit a request, but I'm not clear on whether the request went through or not.)

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May 11, 2022 in Current Affairs, In the News | Permalink | Comments (0)

The recent Supreme Court ruling in Austin v. Reagan National Advertising was about billboard signs, but the majority had a lot to stay about regulation of charitable solicitation. The case here was about whether a law that distinguished between on-premises and off-premises advertising was content-based or content-neutral. Applying the Court’s decision in Reed v. Gilbert, the Fifth Circuit held the distinction was content-based—and thus subject to strict scrutiny—because it required the reader to determine who the speaker was and what the speaker was saying. The Supreme Court reversed, saying the key question is whether the government’s restriction is based on “substantive” content, and a location-based distinction doesn’t qualify.  Thus, the Court held that the distinction was content-neutral and subject only to intermediate scrutiny. Read more for what the Court said -- and didn't say -- about regulation of charitable solicitation.

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May 10, 2022 in Federal – Judicial | Permalink | Comments (0)

Yesterday, Fox 13 in Utah ran an exposé of Vanguard Academy, a public charter school in West Valley City, UT (which seems to be a suburb of Salt Lake City). The charter school is run by the Kingston family, a Mormon fundamentalist group.

(As a quick aside, Mormon fundamentalism has become a popular culture thing again, largely because of Hulu's "Under the Banner of Heaven." While this blog post is basically not at all about Fundamentalist Mormonism, it's worth noting that there isn't a single fundamentalism; there are disparate groups. Moreover, it's a distinctly modern thing---fundamentalism arose as aa direct response to modernism. Finally, though the polygamy aspects of Mormon fundamentalism swamp discussion of other aspects, honestly, the economic system many of these groups adopt is at least as interesting.)

Continue reading

May 9, 2022 in Current Affairs, In the News | Permalink | Comments (0)

For some reason the issue of a nonprofit art museum selling some of its collection off resonates at a high level for me. Sometimes, they sell off in order to generate working capital. Probably never really a good idea because you are not solving the long term problem of a sustainable future for the museum. 

The Toledo Museum of Art in Ohio just announced it is selling off a number of Impressionist works in order to diversify it's collection. Of course the fascinating question remains how do you best diversify - by the folks who come to your museum and are included, or by the story your art works tell? I'm not sure of the answer and it is probably a bit of both, but it's a fascinating and important question to ask. Obviously a Museum needs to grow and change over the years and so curating its collection is key.

From the story in Hyperallergenic: 

"The Toledo Museum of Art (TMA) will send three works by Paul Cézanne, Henri Matisse, and Pierre-Auguste Renoir to auction next month. Proceeds from the sale, an estimated $60 million, will be used to build a more diverse collection with the goal of “broadening the narrative of art history,” the museum said in a statement.

The TMA will deaccession Renoir’s “Nu s’essuyant (The Bather)” (1912), Cézanne’s “Clairière (The Glade)” (c. 1895), and Matisse’s “Fleurs ou Fleurs devant un portrait” (1923). The works will be offered as part of Sotheby’s Modern Evening Auction on May 17."

Museum leaders say its collection is already strong in that area and this opens up resources to expand its collection in other ways.

Philip Hackney

April 29, 2022 in Current Affairs, In the News | Permalink | Comments (0)

Representatives Betsy McCollum and Fred Upton introduced a bill on Tuesday to replace the Form 1023EZ. The bill is entitled the Nonprofit Sector Strength and Partnership Act of 2022.

The bill, among other things, would create a White House Office on Nonprofit Sector Partnership and an Interagency Council on Nonprofit Sector Partnership. 

From Rep. McCollum's press release: 

Congresswoman Betty McCollum (MN-04) and Congressman Fred Upton (MI-06) have introduced the Nonprofit Sector Strength and Partnership Act of 2022 to strengthen the nonprofit sector and its relationship with the federal government. The legislation will improve access to data about the nonprofit sector, and leverage the mission, knowledge, and impact of thousands of nonprofits to work together more effectively in pursuit of shared goals.

“In my home state of Minnesota, the nonprofit sector makes up nearly 14 percent of our workforce and generates $66 billion in annual revenue – which is why it is so important that the sector has a seat at the table when it comes to federal lawmaking,” Rep. Betty McCollum said. “Federal government, state, and local governments rely on the nonprofit sector and its ability to harness and direct the generosity, service, and volunteerism of the American people. Just as small businesses have the Small Business Administration (SBA) to facilitate access to federal resources, the nonprofit sector should be afforded this same level of support. I’m grateful to Independent Sector and other nonprofit leaders who have helped shape this idea into the legislation we’ve introduced today. Together, we can establish mechanisms that will enable nonprofits to better serve our communities.”

Philip Hackney

April 28, 2022 in Federal – Legislative | Permalink | Comments (0)

The Senate Finance Committee's Subcommittee on Tax and IRS Oversight, chaired by Senator Whitehouse, is holding a hearing on May 4 on entitled Laws and Enforcement Governing the Political Activities of Tax Exempt Entities. 

It's a little odd to report on this one, because I am one of the witnesses who will present testimony.

The witness list includes

Philip Hackney, Associate Professor of Law, University of Pittsburgh School of Law, Pittsburgh, PA

Bradley A. Smith, Chairman and Founder, Institute for Free Speech, Washington, D.C. 

Ann M. Ravel, Former Chair (2015), United States Federal Election Commission, Los Gatos, CA

Scott Walter, President, Capital Research Center, Washington, D.C. 

I will be posting my testimony soon. I will try to post the other written testimony as well.

Philip Hackney

April 28, 2022 in Current Affairs, Federal – Legislative | Permalink | Comments (0)

Harvard is the latest university to confront its role in slavery releasing a report entitled  “Harvard and the Legacy of Slavery”  and pledging $100 million for initiatives and an endowment to reckon with the findings in the report.

From the article: "Harvard is among the latest major universities to engage in a public reckoning with their role in slavery, a trend that emerged after Brown University published a soul-searching report in 2006 on its ties to the transatlantic slave trade. Georgetown University, the University of Virginia and William & Mary, among others, have also dug deeply into their slavery-stained past in recent years. A group called Universities Studying Slavery, based at U-Va., counts about 90 members (including Harvard) in the United States and abroad."

"The report recommended an expansion of partnerships with historically Black colleges and universities (HBCUs). Under this plan, Harvard would pay for HBCU faculty members to spend a summer, semester or school year in visiting appointments on the Cambridge campus, and Harvard professors would be able to do the same at HBCUs. The report also envisioned that HBCU students would be invited to spend a summer or one or two semesters at Harvard during their junior year — with financial aid from Harvard. Juniors at Harvard could spend time at HBCUs as well. Students in those programs would be known as Du Bois Scholars, honoring the civil rights leader W.E.B. Du Bois, who in 1895 became the first African American to earn a PhD from Harvard."

Philip Hackney

April 26, 2022 in Current Affairs | Permalink | Comments (1)

IRS issued a useful reminder last week that May 16, 2022 is the upcoming deadline for filing the Form 990 series and Form 4720.

IR-2022-93, April 21, 2022

WASHINGTON — The Internal Revenue Service today reminded tax-exempt organizations that many have a filing deadline of May 16, 2022. Those that operate on a calendar-year (CY) basis have certain annual information and tax returns they file with the IRS. These returns are:

• Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF)
• Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
• Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts)
• Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Mandatory electronic filing

Electronic filing provides fast acknowledgement that the IRS has received the return and reduces processing time, making compliance with reporting requirements easier.

Organizations filing a Form 990, 990-EZ, 990-PF or 990-T for CY2021 must file their returns electronically. Private foundations filing a Form 4720 for CY 2021 must file the form electronically. Charities and other tax-exempt organizations can file these forms electronically through an IRS Authorized e-File Provider.

Organizations eligible to submit Form 990-N must do so electronically and can submit it through Form 990-N (e-Postcard) on IRS.gov.

"To help exempt organizations comply with their filing requirements, the IRS provides a series of pre-recorded online workshops," said Robert Malone, Exempt Organizations and Government Entities Director. "These workshops are designed to assist officers, board members and volunteers with the steps they need to take to maintain their tax-exempt status, including filing annual information returns."

Common errors

The IRS also reminds organizations to submit complete and accurate returns. If an organization's return is incomplete or the wrong return for the organization, the return will be rejected. Common errors include missing or incomplete schedules.

Extension of time to file

Tax-exempt organizations that need additional time to file beyond the May 16 deadline can request a 6-month automatic extension by filing Form 8868, Application for Extension of Time To File an Exempt Organization Return PDF. In situations where tax is due, extending the time for filing a return does not extend the time for paying tax. The IRS encourages organizations requesting an extension to electronically file Form 8868.

Philip Hackney

April 25, 2022 in Current Affairs, Federal – Executive | Permalink | Comments (0)

Call for Papers
AALS Section on Nonprofit and Philanthropy Law
2023 Annual Meeting
January 4-7
San Diego, CA

Nonprofits & Philanthropy

The AALS Section on Nonprofit and Philanthropy Law announces a call for papers to be presented as works-in-progress in our committee session at the 2023 AALS Annual Meeting in San Diego, CA from January 4-7, 2023.

The Section seeks submissions on a variety of topics and methodological approaches related to Nonprofit and Philanthropy Law. Given the recent importance and novelty of state nonprofit law, we are especially interested in scholarship that illuminates, elucidates, and otherwise engages with the work states are doing in the nonprofit world, but are happy to consider any scholarship in the field. We are interested in all states of article development.

Eligibility: Scholars teaching at AALS member or nonmember fee-paid schools. We particularly encourage new voices in the field to submit.

Due Date: June 15, 2022

Form and Content of Submission: Submissions may range from early drafts to articles that have been submitted for publication, but not articles that will have already been published by January 7, 2023.

Submission Method: please submit papers electronically to sbrunson@luc.edu with “AALS Nonprofit and Philanthropy Law Submission” in the email subject line.

Submission Review: Papers will be selected for inclusion in the program after review by members of the AALS Section on Nonprofit and Philanthropy Law.

Additional Information: Presenters are responsible for their own expenses associated with the conference. If you have any questions, please contact the chair, Sam Brunson, at sbrunson@luc.edu.

April 20, 2022 in Conferences | Permalink | Comments (0)

Julia Ortego Bernardo (Universidad Autónoma de Madrid) has posted The interconnection between welfare services and the market in the United States with a focus on the elderly: the application of antitrust law to nonprofits. Here is the Background and Introduction section (footnotes omitted):

It is widely acknowledged that the US welfare system evolved differently from other industrialized countries’ welfare regimes. From a neutral standpoint, scholarly works evidence that the US social service framework cannot be compared to the welfare states implemented in Western Europe over the 20th century−which remain in place. This is due to the different approaches to welfare objectives. The prominent role of private organizations and nonprofits is one of the US system’s defining features, although public authorities’ action (or, better said, government intervention) has not been set aside completely.

The underlying rationale of the US welfare system largely relies on two premises: first, welfare benefits qualify as commodities that can be delivered by private entities (i) operating in the market; and thus (ii) able to meet the existing demand. Second, social service recipients or, where appropriate, welfare officials, have somewhat free choice to a certain extent regarding the services, which, also, would be available to anyone.

However, note that these ideas regarding the efficient operation of social service markets might not be true in practice. In fact, often there are market failures, i.e., the price, quantity or quality of the delivered social services may be unsuitable or simply not enough to meet society’s needs. The most common market failures in the field of social services, although not the only ones, are the so-called “informational market failures” or information asymmetries. If they lack information, welfare recipients can hardly assess the quality and value for money of welfare services. Ultimately, users are unable to choose correctly between services. These and other market failures trigger government intervention, which relies on two instruments: (i) regulation; and (ii) antitrust law. As for (ii), it is worth noting that it qualifies as a paramount example of indirect economic regulation. In the United States, the scope of antitrust law covers a wide range of social services, insofar as their provision is totally or partially subject to market conditions. By fining anticompetitive practices and behaviors, public authorities indirectly enhance the system, since the fines have a positive impact on the price and quality of services.

Within the field of US welfare, public action has been somewhat superseded by private entities’ initiatives (including both companies and nonprofits) and market-based management. This poses several challenges and concerns. Does the protection provided by antitrust law cover the activity of non-profit organizations? We will answer this question below. This paper examines (i) the development of strictly assistance-based services or benefits in the US (section 2.1); (ii) their current legal framework (section 2.2) with regards to other social services, particularly those catering to older adults (section 2.3); and (iv) the positive and negative outcomes (section 3.1) and oversight (section 3.2) of private initiatives, including not-for-profit action (section 3.3).

Lloyd Mayer

April 16, 2022 in Publications – Articles | Permalink | Comments (0)

Matteo Binfarè and Kyle Zimmerschied (both University of Missouri at Columbia) have posted Doing Good and Doing it with (Investment) Style. Here is the abstract:

We study the asset allocation, spending behavior, fees, and investment performance of U.S. private foundations, which have different economic objectives than other institutional investors. We find that large foundations generate positive risk-adjusted returns of about one percent per year and document considerable variation in alphas over time. Larger and more sophisticated foundations perform better and invest more aggressively. Foundations with concentrated stock holdings have higher returns, but also take on more risk. Because of the constraints imposed by the five percent minimum spending rule and accommodating monetary policy, private foundations also increase their risk-taking and reach for yield. Due to these constraints, a conservative asset allocation will decrease real wealth over time resulting in less charitable giving.

Lloyd Mayer

April 16, 2022 in Publications – Articles | Permalink | Comments (0)

Robert S. Goldberg (Adelphi University) and Mark S. LeClair (Fairfield University) have published A proposal for a new type of charitable-business structure: the donor-investor organization in the Journal of Sustainable Finance & Investment. Here is the abstract:

Non-profits redistribute assets in pursuit of a social goal, and for-profits organize assets to generate income and growth. While both organizations face a principal-agent problem, non-profits face unique challenges ensuring that managers adhere to the goals of endowers or donors. Regulations have failed to successfully address the principal-agent problem, and hybrid structures such as Benefit Corporations have profit as one of the objectives. We propose a new type of entity with both a business arm and a charitable arm, with a social purpose as the only objective, committing all profits to the entity’s charitable mission. Investors, both small and large, receive a stream of future tax deductions based on outlays for the organization’s mission, while retaining legal control of the entity’s operations. While not meant to replace all charities, the proposed structure provides a new way for investors, business people and non-profit professionals to work towards a social good.

Lloyd Mayer

April 16, 2022 in Publications – Articles | Permalink | Comments (0)

Peter Molk (Florida) has posted Where Nonprofits Incorporate and Why It Matters, forthcoming in the Iowa Law Review. Here is the abstract:

Nonprofit corporations account for over a trillion dollars of American annual GDP, employ twelve million people, and include some of the most well-known organizations in the world. Yet despite their significance, many core corporate governance issues about nonprofits remain a black box. This Article, using newly available data, begins to remedy this gap in the literature.

Using filing data from 300,000 charitable nonprofits, I examine the foundational issue of where nonprofits incorporate, a decision that determines both the law of nonprofit corporate governance affairs and public oversight apparatus for governance and compliance. Unlike publicly traded corporations, I find nonprofit incorporation choice is not a vigorously competitive race to the top or bottom, but instead is better characterized as a stroll. A nonprofit’s headquarters jurisdiction is the most popular incorporation destination - far more common than for publicly traded corporations. However, among those nonprofits that incorporate out-of-jurisdiction, Delaware is the most popular destination, with the District of Columbia a surprising second. The findings are consistent with nonprofits’ selecting weaker governance and oversight rules, suggesting a potential “stroll to the bottom” among nonprofits. Using these results, I offer evidence-based policy implications to improve governance of nonprofits, to reverse the potential stroll to the bottom, and to invigorate beneficial state competition for nonprofit incorporations.

Lloyd Mayer

April 15, 2022 in Publications – Articles | Permalink | Comments (0)