Nonprofit Governance: Law, Practices, and Trends » (New Edition)

Bruce R. Hopkins is a senior partner with the firm Polsinelli Shughart PC. He is also the author or coauthor of more than twenty-five books, all published by Wiley, including The Law of Tax-Exempt Organizations, Ninth Edition; The New Form 990; and Nonprofit Law Made Easy. Hopkins earned his juris doctorate and master of laws degrees at The George Washington University. He has practiced law for forty years and is a member of the District of Columbia and Missouri bars.

Virginia C. Gross is a shareholder of Polsinelli Shughart PC. Ms. Gross concentrates her practice in the field of nonprofit law and is a frequent writer and speaker on nonprofit issues. She is listed in The Best Lawyers in America for nonprofit organizations/charity law for 2008 and 2009. She is a coauthor of The New Form 990, published by Wiley. Ms. Gross earned her juris doctorate at the University of Texas. She is a member of the District of Columbia, Texas, Missouri, and Kansas bars.

Governance seems to be the subject that is perched atop every nonprofit lawyer's worry/wish list, despite the fact that there is not much law on the point, particularly at the federal level. This ascension in importance is largely due to the various organizations propounding best practices and principles for public charities and other forms of nonprofit organizations, the IRS's redesigned Form 990, the agency's aggressive push of certain good governance principles in the tax-exempt organizations' setting, and scandals brought to light by the Senate Finance Committee staff.

Stemming from the authors' endless hours of meditating over the new Form 990 and sifting through the many (and often inconsistent) best practices principles, Nonprofit Governance fills the need for some cohesion in the realm of nonprofit governance by providing in-depth coverage and explanations of the laws, practices, and trends in this volatile area.

An invaluable resource for nonprofit executives, officers, directors, nonprofit lawyers, accountants, members of boards of directors, and consultants, legal experts Bruce R. Hopkins and Virginia Gross's Nonprofit Governance brims with detailed documentation and references to regulations, rulings, cases, and tax literature (which includes current articles and tax law review notes). Here, readers will find a wealth of clarifying information on:

• Federal and state law fundamentals

• Board member responsibilities and liability

• Nonprofit governance principles

• Nonprofit governance issues

• Application of the private benefit doctrine

• Governance and the redesigned Form 990

• Recommended polices and procedures

• Governance case studies

• Governance legal audit

• A law primer for nonprofitboard members

• And much more

The book includes an exhaustive index, Internal Revenue Code citations and numerous case studies, tips, forms, and checklists to round out the authoritative coverage. Nonprofit Governance is an indispensable guide to, and through, all of the governance policymaking that is unfolding, to improve the management of nonprofit organizations as well as to help organizations be in compliance with nonprofit governance law.

Book Citations.

Preface.

Chapter One: Federal and State Law Fundamentals.

1.1 State Law Overview.

1.2 Formation of Organization.

1.3 Board of Directors Basics.

1.4 Principles of Fiduciary Responsibility.

1.5 Duties of Directors.

1.6 Board Composition and Federal Tax Law.

Chapter Two: Board Members: Responsibilities and Liability.

2.1 Board of Directors Governance Principles.

2.2 Role of Officers.

2.3 Key Employees.

2.4 Management Companies.

2.5 Board Member Responsibilities.

2.6 Protections against Personal Liability.

2.7 Minimizing Board Member Legal Liability.

Chapter Three: Nonprofit Organizations Governance Principles.

3.1 Governance Philosophy in General.

3.2 Sarbanes-Oxley Act.

3.3 Watchdog Agencies’ Standards.

3.4 California's Nonprofit Integrity Act.

3.5 Senate Finance Committee Staff Paper.

3.6 U.S. Treasury Department's Voluntary Best Practices.

3.7 Committee for Purchase Proposed Best Practices.

3.8 Panel on Nonprofit Sector Recommendations.

3.9 Boards of Exempt Credit Counseling Organizations.

3.10 Draft of IRS Good Governance Principles.

3.11 American National Red Cross Governance Modernization Act Principles.

3.12 Panel on Nonprofit Sector Good Governance Principles.

3.13 Redesigned IRS Annual Information Return (Form 990).

3.14 IRS LifeCycle Educational Tool Principles.

3.15 Commentary.

Chapter Four: Governance and the Redesigned Form 990.

4.1 Governing Body and Management.

4.2 Policies.

4.3 Disclosure.

Chapter Five: Nonprofit Governance Issues.

5.1 Perspectives on Nonprofit Governance.

5.2 Governing Board Size.

5.3 Governing Board Composition.

5.4 Role of Governing Board.

5.5 Organization Effectiveness and Evaluation.

5.6 Board Effectiveness and Evaluation.

5.7 Frequency of Board Meetings.

5.8 Term Limits.

5.9 Board Member Compensation.

5.10 Audit Committees.

5.11 Other Committees.

5.12 Compliance with Law.

5.13 Categories of Expenditures.

5.14 Disclosures to Public.

5.15 Mission Statements.

5.16 Codes of Ethics.

5.17 Conflict-of-Interest Policies.

5.18 Whistleblower Policies.

5.19 Document Retention and Destruction Policies.

5.20 Fundraising Practices.

5.21 Role of IRS in Governance.

Chapter Six: Policies and Procedures for Good Governance.

6.1 Sources of Policies.

6.2 IRS Focus on Policies and Procedures.

6.3 Discussion of Specific Policies and Procedures.

6.4 Colleges and Universities.

6.5 Other Policies.

Chapter Seven: Nonprofits in the Spotlight:  Governance Case Studies.

7.1 The American National Red Cross.

7.2 The Smithsonian Institution.

7.3 American University.

7.4 J. Paul Getty Trust.

7.5 University-Affiliated Medical Centers.

7.6 Lessons Learned.

Chapter Eight: Law for Nonprofit Board Members: A Primer.

8.1 Nonprofit Organizations.

8.2 Tax-Exempt Organizations.

8.3 Categories of Tax-Exempt Organizations.

8.4 Tax-Exempt Organizations Law Basics.

8.5 Legislative Activities Law.

8.6 Political Activities Law.

8.7 Public Charities and Private Foundations.

8.8 Reporting Rules.

8.9 Disclosure Rules.

8.10 Unrelated Business Rules.

8.11 Subsidiaries.

8.12 Joint Ventures.

8.13 Other Aspects of Law of Exempt Organizations.

8.14 Charitable Giving Rules.

8.15 Federal Law as to Fundraising.

8.16 State Fundraising Law.

8.17 IRS Audits.

8.18 Bankruptcy.

Chapter Nine: Governance Legal Audit.

9.1 Inventory of Basics.

9.2 Governance.

9.3 Policies and Procedures.

9.4 External Relationships.

9.5 Tax-Exempt Status.

9.6 Private Inurement Doctrine.

9.7 Private Benefit Doctrine.

9.8 Excess Benefit Transactions.

9.9 Self-Dealing Rules.

9.10 Actions by Organization.

9.11 Public Charity Classification.

9.12 Private Foundation Rules.

9.13 Donor-Advised Funds.

9.14 Endowment and Other Funds.

9.15 Legislative Activities.

9.16 Political Campaign Activities.

9.17 Other Forms of Advocacy.

9.18 Subsidiaries.

9.19 Bifurcation Basics.

9.20 Tax-Exempt Subsidiaries.

9.21 Taxable Subsidiaries.

9.22 Revenue from Subsidiary.

9.23 Joint Venture Basics.

9.24 Joint Ventures—Other Elements.

9.25  Unrelated Business Analysis.

9.26 Commerciality Doctrine.

9.27 Annual Information Returns.

9.28 Disclosure Requirements.

9.29 Considerations for Lawyer Conducting Legal Audit.

Index.