This work addresses law for the nonprofit sector, including principles relating to governance and to the duties of governing boards and individual fiduciaries. Its scope includes state, federal and private regulation, as well as gifts.
Reporters:
Marion R. Fremont-Smith, Harvard University, Kennedy School of Government
Jill R. Horwitz, University of California, Los Angeles School of Law
Foreword xvii
Reporters’ Memorandum xix
Projected Overall Table of Contents xxiii
Chapter 3
Changes to Purpose and Organization
§ 3.05. Insolvency and Bankruptcy 1
CHAPTER 5
GOVERNMENT REGULATION OF CHARITIES
§ 5.01. Role of the State Attorneys General 15
CHAPTER 6
STANDING OF PRIVATE PARTIES
Introductory Note 35
§ 6.01. Standing of a Private Party to Commence or Intervene in a Direct Suit Against a Charity 37
§ 6.02. Standing of a Private Party to Commence an Action on Behalf of a Charity:
The Derivative Suit 51
§ 6.03. Standing of a Private Party to Enforce the Purposes to Which Charitable Assets are Devoted and Administrative Terms Governing Charitable Assets 70
§ 6.04. Standing of a Private Party to Commence or Intervene in a Cy Pres or Deviation Proceeding 89
§ 6.05. Definition of a Private Party with a Special Interest for the Purposes of Standing 99
Appendix A. Black Letter of Tentative Draft No. 2 117
Appendix B. Other Relevant Black-Letter Text 123
Tentative Draft No. 2 includes parts of Chapter 3, Changes to Purpose and Organization (§ 3.05. Insolvency and Bankruptcy) and Chapter 5, Government Regulation of Charities (§ 5.01. Role of the State Attorneys General), and all of Chapter 6, Standing of Private Parties. The draft was approved by the membership at the 2017 Annual Meeting, subject to the discussion at the Meeting and the usual editorial prerogative. Included in the draft are revisions that the Reporters made to the material after the draft was printed, but before the material was put to a vote. This material may be cited as representing the Institute’s position until the official text is published.
Foreword xvii
Reporters’ Memorandum xix
Projected Overall Table of Contents xxiii
Chapter 3
Changes to Purpose and Organization
§ 3.05. Insolvency and Bankruptcy 1
CHAPTER 5
GOVERNMENT REGULATION OF CHARITIES
§ 5.01. Role of the State Attorneys General 15
CHAPTER 6
STANDING OF PRIVATE PARTIES
Introductory Note 35
§ 6.01. Standing of a Private Party to Commence or Intervene in a Direct Suit Against a Charity 37
§ 6.02. Standing of a Private Party to Commence an Action on Behalf of a Charity:
The Derivative Suit 51
§ 6.03. Standing of a Private Party to Enforce the Purposes to Which Charitable Assets are Devoted and Administrative Terms Governing Charitable Assets 70
§ 6.04. Standing of a Private Party to Commence or Intervene in a Cy Pres or Deviation Proceeding 89
§ 6.05. Definition of a Private Party with a Special Interest for the Purposes of Standing 99
Appendix A. Black Letter of Tentative Draft No. 2 117
Appendix B. Other Relevant Black-Letter Text 123
Tentative Draft No. 2 includes parts of Chapter 3, Changes to Purpose and Organization (§ 3.05. Insolvency and Bankruptcy) and Chapter 5, Government Regulation of Charities (§ 5.01. Role of the State Attorneys General), and all of Chapter 6, Standing of Private Parties. The draft was approved by the membership at the 2017 Annual Meeting, subject to the discussion at the Meeting and the usual editorial prerogative. Included in the draft are revisions that the Reporters made to the material after the draft was printed, but before the material was put to a vote. This material may be cited as representing the Institute’s position until the official text is published.
Foreword xv
Reporters’ Memorandum xix
Projected Overall Table of Contents xxi
CHAPTER 1 DEFINITION, CHOICE OF FORM, AND AUTONOMY
Introductory Note 1
1.01. Definition of a Charity 2
1.02. Choice of Legal Form 23
1.03. Charities with Members 38
CHAPTER 2 GOVERNANCE
2.01. Fiduciary Defined and Scope of Duties 49
2.02. Duty of Loyalty 60
2.03. Duty of Care and the Business Judgment Rule 82
2.04. Modification of Fiduciary Duties and Exculpation of Fiduciaries 104
2.05. Definition and Duty of the Governing Board 118
2.06. Delegation to Board Committees 131
2.07. Fiduciaries’ Rights to Information 143
CHAPTER 3 CHANGES TO PURPOSE AND ORGANIZATION
3.01. Procedures for Changing a Charity’s Purposes in its Governing Documents and the Application of Existing Assets to New or Additional Purposes 155
3.02. The Doctrine of Cy Pres 176
3.03. The Doctrine of Deviation 193
3.04. Change of Structure: Fundamental Transactions 205
3.06. Termination and Dissolution 214
Appendix. Black Letter of Tentative Draft No. 1 221
Tentative Draft No. 1 contains Chapter 1, Definition, Choice of Form, and Autonomy (§§ 1.01-1.03); Chapter 2, Governance; and Chapter 3, Changes to Purpose and Organization (§§ 3.01-3.04 and 3.06). The draft was approved by the membership at the 2016 Annual Meeting, subject to the discussion at the Meeting and the usual editorial prerogative. Included are revisions the Reporters made to the material after the draft was printed, but before the material was put to a vote. This material may be cited as representing the Institute’s position until the official text is published.
Foreword xv
Reporters’ Memorandum xix
Projected Overall Table of Contents xxi
CHAPTER 1 DEFINITION, CHOICE OF FORM, AND AUTONOMY
Introductory Note 1
1.01. Definition of a Charity 2
1.02. Choice of Legal Form 23
1.03. Charities with Members 38
CHAPTER 2 GOVERNANCE
2.01. Fiduciary Defined and Scope of Duties 49
2.02. Duty of Loyalty 60
2.03. Duty of Care and the Business Judgment Rule 82
2.04. Modification of Fiduciary Duties and Exculpation of Fiduciaries 104
2.05. Definition and Duty of the Governing Board 118
2.06. Delegation to Board Committees 131
2.07. Fiduciaries’ Rights to Information 143
CHAPTER 3 CHANGES TO PURPOSE AND ORGANIZATION
3.01. Procedures for Changing a Charity’s Purposes in its Governing Documents and the Application of Existing Assets to New or Additional Purposes 155
3.02. The Doctrine of Cy Pres 176
3.03. The Doctrine of Deviation 193
3.04. Change of Structure: Fundamental Transactions 205
3.06. Termination and Dissolution 214
Appendix. Black Letter of Tentative Draft No. 1 221
Tentative Draft No. 1 contains Chapter 1, Definition, Choice of Form, and Autonomy (§§ 1.01-1.03); Chapter 2, Governance; and Chapter 3, Changes to Purpose and Organization (§§ 3.01-3.04 and 3.06). The draft was approved by the membership at the 2016 Annual Meeting, subject to the discussion at the Meeting and the usual editorial prerogative. Included are revisions the Reporters made to the material after the draft was printed, but before the material was put to a vote. This material may be cited as representing the Institute’s position until the official text is published.