The Model Protection of Charitable Assets Act (MPCAA) received approval from the Uniform Law Commission (ULC) Tuesday during the ULC’s annual meeting in Vail, Colo.
Approval means that individual states can use the act or any part of it as a model for regulation of nonprofit organizations, though they are not required to use any of it. The new act replaces the Uniform Supervision of Trustees Charitable Purposes Act, passed in 1954.
In a statement after the vote, the ULC said the goal of the PCAA is to “protect the role of the states with respect to charitable assets, by clarifying the role of the Attorney General.
“The attorney general’s authority in most states is broad and this act will not limit or narrow that authority, while providing many states the first clear statutory articulation of that authority.
”The act would require anyone who holds or administers more than $5,000 in charitable assets to register basic information about the organization and file an annual report with the state, as well as notify the state of any “life events” such as a merger, dissolution or disposition of assets.
One of the nation’s leading critics of charity regulators, Mark Fitzgibbons fears that the act is too vague and could lead to abuses by regulators. “It would allow charity regulators to conduct investigations of covered entities under vague and very poorly defined standards, and without court supervision or guaranteed First Amendment protections of speech and Fourth Amendment protections against unreasonable searches and seizures,” said Fitzgibbons, president of corporate and legal affairs for American Target Advertising in Manassas, Va.