Proskauer’s 20th Annual Trick or Treat Seminar was held on Friday, October 30.
The Seminar discussed:
Amanda Nussbaum welcomed everyone to the 20th Annual Trick or Treat Seminar, commented on some of the trends in nonprofit law over the last twenty years, and introduced the presenters.
In April, the New York State Attorney General’s office released guidance addressing key provisions of the New York Not-for-Profit Corporation Law. For in-depth analysis of the Attorney General’s guidance, click here for an article by Proskauer attorneys Roger Cohen and Ellen Moskowitz. For this blog’s coverage of the New York…
Our work on behalf of our client, Angkor Hospital for Children (“AHC”), in Siem Reap, Cambodia, reached a milestone with a New York Supreme Court order on September 15, 2014, transferring all the assets from a New York not-for-profit organization, Friends Without a Border (“FWAB”), to a Hong Kong company limited by guarantee, Angkor Hospital for Children Limited (“AHC HK”), established for charitable purposes.
AHC, located in Siem Reap, Cambodia was founded by photographer Kenro Izu in gratitude for the inspiration he received from the country’s ancient monuments, which he captured in his photographic series “Light Over Ancient Angkor.” Being Cambodia’s first teaching hospital, one of only two in the country, AHC draws patients who suffer from serious illness and often from acute malnutrition as well. They travel for hours, or even days, usually from rural areas, seeking higher level care that cannot be found in their own communities. AHC not only provides the neediest of these patients with free treatment, but also reimburses their travel costs in order to ensure that they will not hesitate to seek care when it is needed. AHC has also established a satellite clinic in the district town of Sotnikum in order to reach a larger number of poor children in the rural communities. Between AHC and the satellite clinic, over 150,000 children are treated each year.
The rollout of the New York Nonprofit Revitalization Act of 2013 (the “Revitalization Act”), effective July 1, 2014, is causing challenges for many New York charities as the compliance date approaches. For more information on the challenges resulting from the rollout of the Revitalization Act, click here. For more…
The New York Non-Profit Revitalization Act of 2013 (the “Act”), which was passed by the New York State legislature in June, was signed into law by Governor Andrew Cuomo last week. The Act seeks to modernize the New York Not-For-Profit Corporation Law (the “NPCL”), and is the first major overhaul of the NPCL in four decades.
The Act goes into effect on July 1, 2014.
Details of some of the changes to the NPCL include:
• In a critically important victory for common-sense corporate governance, notices and consents under the NPCL may be sent via e-mail and fax.
• Instead of defining not-for-profit corporations as Type A, B, C, or D (a classification system that has bedeviled New York lawyers for years), such entities will be simply “charitable” or “non-charitable.” Former Type-A corporations will be non-charitable, while all others will be charitable. Charitable purposes are defined as “charitable, educational, religious, scientific, literary, cultural or for the prevention of cruelty to children or animals.”
• The New York Executive Law requires submission of audit reports to the Attorney General for entities registered to solicit and collect funds for charitable purposes. The new law raises the gross revenue thresholds for such audits over time. Starting on July 1, 2014, certified audits will be required for those entities with revenue and support in excess of $500,000. The threshold will be raised to $750,000 as of July 1, 2017 and $1 million as of July 1, 2021.
Proskauer’s 18th Annual Trick or Treat Seminar was held on Thursday, October 31.
The Seminar discussed:
In her introductory remarks, Amanda Nussbaum provided a summary of recent Internal Revenue Service developments and introduced the presenters.
In what is characterized as a “Revitalization Act,” and which certainly is a modernization, the New York State legislature has passed and placed before Governor Andrew Cuomo changes to the Not-for-Profit (“NFP”) Corporation Law. The current version of the law, if signed by the Governor, will allow for use of electronic communications (e-mail and fax) more broadly, increase the gross revenue floor for reporting and mandatory independent audits, eliminate the NFP corporation types that have bedeviled New York lawyers for years, mandate conflict of interest and whistleblower protection polices, establish clearer rules on related-party transactions, and enhance the Attorney General’s authority to approve (without further review by a Court), certificates of amendment and corporate mergers and dissolutions. The law will also specifically allow the use of committees for certain super-majority board approval matters such as leases, make every officer and director subject to the jurisdiction of New York courts no matter where they may reside, prohibit employees of NFP corporations from serving as chair of its board, and otherwise generally conform and improve the existing law.
New York Attorney General Eric T. Schneiderman has issued proposed regulations that would require many nonprofit organizations to annually disclose certain information about their political spending and their donors’ identities. According to the Attorney General, the proposed regulations are in response to nonprofit organizations, in particular Section 501(c)(4) social welfare organizations, that have engaged in political campaign activity and do not disclose their sources of funding. While Section 527 organizations are required to publicly disclose certain information relating to their political expenditures and their donors’ identities, other nonprofit organizations are generally exempt from such reporting requirements.
“Cause marketing campaigns,” or “commercial co-ventures” (i.e., advertising campaigns in which a company indicates that the purchase or use of its products will result in a charitable contribution) have long been a popular fundraising tool for charities. Some state charity authorities regulate cause marketing campaigns with a variety of requirements; some states do not regulate the practice. While such campaigns have grown into a billion-dollar-a-year industry, the perception is that they often fail to provide consumers with sufficient information to enable them to understand how their purchases will actually benefit charity. New York Attorney General Eric T. Schneiderman recently issued a set of best practices, entitled “Five Best Practices for Transparent Cause Marketing,” which are designed to promote transparency in cause marketing campaigns. These were developed in and for the state of New York but, as described below, we can expect other states to consider and possibly adopt these best practices as well.
On March 17, 2011, the New York State Attorney General’s Charities Bureau published “A Practical Guide to the New York Prudent Management of Institutional Funds Act” (the “Guide”). The Guide provides a summary of the New York Prudent Management of Institutional Funds Act (“NYPMIFA”) as well as practical guidance on its application. Although the Guide is not an official regulation, since the Charities Bureau is tasked with enforcement of NYPMIFA, not-for-profit institutions are well advised to take this guidance into serious consideration.
As we have previously reported, NYPMIFA was enacted into law on September 17, 2010. It updates the Uniform Management of Institutional Funds Act, which had governed charitable endowment funds since 1978, with New York’s unique version of the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”). By doing so, New York became the forty-seventh state to have enacted a version of UPMIFA.
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