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N.Y Overhauls Nonprofit Laws, Regs

By Zach Halper - June 25, 2013

A bill that would reform the laws governing nonprofits in New York unanimously passed both houses of the state’s legislature. It now awaits a signature from Gov. Andrew Cuomo before it becomes law.

The legislation, called the Nonprofit Revitalization Act, was written by New York Attorney General Eric T. Schneiderman and sponsored by Sen. Michael Razenhofer (R-Amherst) and Assemblyman James Brennan (D-Brooklyn). It represents the first major overhaul of nonprofit regulations in the state in 40 years. Schneiderman hailed its passage as a victory for modernization.

The Nonprofit Revitalization Act was born out of the suggestions from the Leadership Committee on Nonprofit Revitalization, a task force of 32 representatives from the nonprofit sector that was created by Schneiderman. Many of the group’s suggestions made its way into the final draft of the law, which makes the following reforms:

  • Nonprofits will be permitted to use email and video technology for meetings;
  • Boards will be able to delegate the approval of small transactions;
  • Procedures for mergers, property sales, and corporate dissolutions will be streamlined;
  • Boards will be required to perform active oversight over financial audits;
  • Nonprofit employees will no longer be able to serve as the chair of the board; and,
  • Nonprofits will be able to enter transactions without having to go to court.

“Attorney General Schneiderman’s bill, the Nonprofit Revitalization Act, benefits from having been fully informed by the best ideas of New York’s nonprofit professionals, including those of us who served on his Leadership Committee for Nonprofit Revitalization,” said Michael Clark, president of the Nonprofit Coordinating Committee of New York. “It responds in a thoughtful and balanced way to many of the pressing issues identified for reform, and NPCC looks forward to the Act becoming law.”

Michael Stoller, executive director of the Human Services Council of New York and another member of the task force, said that he had a good feeling about what the Committee could accomplish based on Schneiderman’s openness. “He was looking to look at everything to do with these regulations,” he said. “It was a very open process. They really wanted to hear what we wanted to say.”

Stoller, who once worked on the city council himself, said that out of all the reforms the law will bring, he believes that the removal of red tape will bring the most benefit to nonprofits. “If the government wants us to act like businesses, then they need to treat us like businesses,” he said, explaining that the modernization of these regulations was a long time coming. “As times change, laws have to change with them.”

For some members of the Committee, it was just a relief to see something come out of their work. “I’m glad to see there was follow through. So often there’s a lot of talk and nothing comes of it,” said Sharon Ball, executive director of the Broome County Arts Council in Binghamton, N.Y. “[The bill] doesn’t contain everything we talked about, but I suppose that’s an impossibility.”

Ultimately, Stoller believes this is just the first step in a much longer process to streamline nonprofit regulations and governance. “There’s a lot of other problems to be solved, but this is a good start. Now we have to figure out what the next steps are,” he said. “Everyone seems to be into this. If we can keep riding that wave of interest, we can get even more done.”

“I don’t think we’re done yet,” said Ball. “It’s a great step towards improving the nonprofit environment in New York and I hope it’s not the last.”

You can view the full details of the Nonprofit Revitalization Act at http://open.nysenate.gov/legislation/bill/A8072-2013

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