Non-Profit Law Update

News


Upcoming Programs & CLE
Reports
Committees
OCTOBER 2013

This update, which includes recent City Bar reports and upcoming programs in the area of nonprofit organizations, will be issued periodically to City Bar members who practice or have an interest in nonprofits.

Proposed Changes to New York's Not-for-Profit Corporation Law
The City Bar commented on provisions in the Transportation, Economic Development and Environmental Conservation Budget that would have significantly altered New York’s Not-for-Profit Corporation Law (N-PCL). The proposed amendments eliminated the word “type” in identifying the four different nonprofit corporations that can be incorporated under the N-PCL, while retaining the descriptions of each of the four nonprofit purposes. The Non-Profit Organizations Committee, while recognizing the problems that exist under the N-PCL’s current categories of “types” of nonprofits, argued that the proposed amendments would engender confusion while not addressing the underlying problems, and that any such extensive rewriting of the law should be subject to more study before passage. Along with other organizations, the Committee recommended it be removed from the budget and the proposed revisions were ultimately excluded. The Non-Profit Committee is continuing to study these issues and provide suggestions for how the N-PCL can be modernized and improved without placing unnecessary burdens on nonprofits.

Inaugural Non-Profit Institute
The City Bar Center for CLE recently hosted the inaugural Non-Profit Institute, an all-day program examining the current trends and ever-changing developments in the field of not-for-profit law. Legislative trends at the state and federal levels were covered including concerns over Governor Cuomo's executive order on compensation for state-funded nonprofits and ideas on how to reform New York's Not-for-Profit Corporation Law and New York's version of the Prudent Management of Institutional Funds Act. The program also discussed non-profit accounting, ethics, compliance, and best practice issues and featured a diverse range of panelists from regulators to government and non-profit officers to accountants. If you missed the inaugural Institute, a DVD of the program is available to purchase here. Please be on the lookout for information on the next Non-Profit Institute in the coming months.

Programs

The Role of An Attorney on a Not-for-Profit Board
Wednesday, October 16, 6:00 - 8:30 PM

The panel will cover the legal, ethical, and accounting aspects of board governance and will provide opportunities to network with representatives of nonprofits seeking board members.

CLE

Nonprofit Law in the 21st Century: The Changing Landscape in Federal & State Law
Tuesday, October 22, 2013, 9am - 12:00 pm
This program will provide an overview on the current state of the law, both state and federal. A 50% discount is available for attorneys working for non-profits and government agencies.

Missed a Program? You Can Still Benefit! CLE Programs' CDs, DVDs and other course
materials can be found on the website.

Non-Profit Revitalization Act of 2013
In a letter to Governor Cuomo, the Committee on Non-Profit Organizations urged that S.5845/A.8072, the Non-Profit Revitalization Act of 2013, be signed into law. Current nonprofit laws in New York include many archaic provisions that are confusing and burdensome, causing many newly-formed New York-based nonprofits to incorporate under the laws of other states, thereby limiting supervision of such nonprofits by New York authorities. The bill remedies many of the weaknesses in the current law and strengthens New York law to enhance governance and accountability, while also reducing costs for many nonprofits by raising the revenue threshold for required annual financial audits to be more consistent with the thresholds in other states. The Committee noted that it will be proposing technical corrections to certain provisions adopted in the Act, as well as additional ideas for nonprofit reform, for consideration after the Act becomes law.

Non-Profit Revitalization Act
In a letter to the Charities Bureau of the Attorney General’s Office, the Committee on Non-Profit Organizations provided preliminary comments on the Attorney General’s Program Bill, S.B. 7431, The Non-Profit Revitalization Act. Though the Committee expresses support for the goals of the Act, which are to simplify and modernize aspects of New York’s Not-for-Profit Corporation Law so as to improve the regulatory climate for nonprofits in New York, its letter expresses concerns with some of the governance aspects of the bill, as they may create new and substantial unwarranted burdens on New York charities, particularly the small charities.

Debt Settlement Services
In a joint report, the Committees on Consumer Affairs and Civil Court expressed opposition to A.597, which would amend the Budget Planning Law to permit entities other than Type B not-for-profit corporations to offer debt management services and allow such entities to conduct business in New York, subject to licensure, fee limitations, consumer disclosures, and additional conditions. This bill, the report argues, departs from New York State’s longstanding policy of protecting consumers from deceptive and abusive debt relief services by limiting the provision of such services to entities that charge no fee or only a nominal fee, and that debt relief for more than a nominal fee on behalf of economically distressed consumers is inherently flawed and abusive.

Allowing All Types of Nonprofits to Become Licensed Budget Planners
In a joint report, the Committees on Consumer Affairs and Civil Court expressed opposition to the proposal that had been in the State’s Executive Budget for 2013-14 that would have amended the Banking Law to permit all types of nonprofit corporations to become licensed budget planners. Restricting budget planners to type B not-for-profit corporations, the report argues, makes it more likely that licensed budget planners will be organizations that genuinely engage in services that involve charitable and educational purposes and thus will be best situated to provide professional services to consumers and would best protect the public from unscrupulous operators. Although the proposal has not been enacted, the report offers these comments in opposition should the proposal be considered in the future.

Committee Involvement--It's Never too Late
Committees are how the City Bar’s work gets done. Working on a committee can give you great experience while opening up a number of career doors, some you may not even anticipate.

A full list of the City Bar committees along with a brief description of each and an application form can be found on the City Bar’s website. As a number of City Bar committees have more applicants than available slots, please consider applying to more than one committee.