- The Dodd-Frank Act and Implications for Nonprofit Organizations (by Venable LLP):
"While many of the provisions of the Dodd-Frank Act apply specifically to financial services firms and their related activities, the Act does include a handful of key provisions that may impact generally the nonprofit community. In addition, the Dodd-Frank Act makes sweeping changes in how financial products and services are regulated that will impact a number of nonprofit organizations directly due to new regulations and compliance requirements.
Nonprofit leaders should look carefully at the provisions of the Dodd-Frank Act and determine whether their organization's fall under any of its provisions and, to the extent that they do not, how they may address practices required under the Act, even if not mandated by law. In addition, there are a number of opportunities for nonprofits in the areas of financial literacy and consumer education. Of course, there also will be no shortage of opportunities for financial services industry trade associations to weigh-in on issues of importance to their memberships.
This article will provide some general background and review the main provisions most likely relevant to nonprofit organizations..." Read on>>
- Key Nonprofit Corporate Law Developments in 2010 (by McDermott Will & Emery):
"The year 2010 witnessed an extraordinary series of developments in nonprofit corporate and charitable trust law as they affected the governance and operation of hospitals and health care systems. This is consistent with a decade-long trend that has made corporate law and governance key legal feasibility considerations for nonprofit organizations.
These developments reflect the following general trends: (a) increased oversight from state and federal charity regulators; (b) greater focus on corporate governance practices; (c) closer scrutiny of the exercise of business judgment by boards; (d) the evolution of system structures and business combinations; (e) the governance implications of an economy in transition; and, notably, (f) the challenges and opportunities arising from the March, 2010, enactment of the Patient Protection and Affordable Care Act (PPACA).
Based on these trends, our ''top ten'' list of major nonprofit corporate law developments for health care providers in 2010 is as follows..." Read on>>
- New Limits on Online Marketing: The Implications for Nonprofit Organizations (by Venable LLP):
"Many nonprofit organizations that market online may rely upon recurring
charges for enrollment in membership offers, and other subscription
programs, as well as online processing of payment transactions. But
now, online advertisers, marketers and merchants will have to comply
with a new set of requirements under the "Restore Online Shoppers'
Confidence Act," S. 3386 (the "Act"). The Act was signed into law by
President Obama on December 29, 2010. As a result, nonprofit
organizations with online sales - especially ones with third party
marketing relationships or that sell "continuity" programs (e.g.,
recurring periodic billing) - will need to review their online
activities carefully under the new law to ensure compliance..." Read on>>
- Board Members Beware - SEC Regulatory Authority May Cast Wide Net (by Thompson Coburn LLP):
"Governmental board members and board members of nonprofit organizations may be "in the sights" of the Securities and Exchange Commission (SEC) if their organizations are involved in the issuance of municipal bonds, including tax-exempt bonds. Federal statutes known as the Dodd-Frank Wall Street Reform and Consumer Protection Act recently adopted by Congress (the Act) amended the Securities Exchange Act of 1934 (the 34 Act) to add a new requirement that "municipal advisors" register with the SEC. The definition of municipal advisor, as interpreted by the SEC, is potentially quite broad and could include appointed members of the governing body of an issuer of municipal bonds or the entity borrowing the proceeds thereof. For example, the Act could apply to the board members of a local industrial development authority or a private college..." Read on>>
- The Director's Dozen: Prudent Activities for Governing Boards of Nonprofit Corporations (by Foley Hoag):
"Directors of nonprofit corporations owe fiduciary obligations to the corporation. They are bound by Massachusetts law to perform their duties as directors in good faith, in a manner reasonably believed to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a similar position would exercise under similar circumstances. As stewards of the nonprofit corporation, directors are required (1) to act with care in their oversight and, (2) to keep the interests of the corporation paramount above their own personal interests when acting for, or on behalf of the corporation. These legal duties are known as the duty of care and the duty of loyalty.
The following guidelines describe some actions directors should take to fulfill their legal duties..." Read on>>
- New Limits on Nonprofit Securities Exemption (by Warner Norcross & Judd):
"Effective Jan. 1, 2011, debt securities of nonprofit organizations will qualify for the nonprofit exemption from registration in Michigan only if the maximum offering amount is $500,000 or less and the securities are sold exclusively to bona fide members of the organization without payment of a commission or consulting fee.
The process for completing a registration by qualification of nonprofit organization debt securities has been simplified, however, and may be accomplished by filing the offering documents with the Michigan Office of Financial and Insurance Regulation (OFIR) and paying a $250 flat fee. For nonprofit organizations, the registration fee will not be calculated based on the offering amount in Michigan. The registration filing must be made at least 20 business days before making offers or sales in the state..." Read on>>
- Yellow Flags, Red Flags: What's a Board to Do? (by McDermott Will & Emery):
"In two recent instances, a nasty and salacious controversy between a reputable nonprofit health care organization and its CEO has served to shine a bright (and unfavorable) light on the subject of board responsiveness to suspicious conduct or events.
Both instances fueled intense media scrutiny and prompted an internal legal investigation of the underlying facts. One spawned competing litigation complaints filed by the board and the CEO, respectively, and allegedly sparked an IRS examination. The other involved a state attorney general review of the board's responsive conduct, the results of which review were made publicly available. Both instances resulted in extraordinary financial and reputational damage to the involved institutions and individuals. Most notably, in both instances warning signs were presented to individual board members (if not the full board) long before events prompted the full board to commence an investigation..." Read on>>...
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