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University of Michigan Law School

Nonprofit Organizations Law

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The Attack On Nonprofit Status: A Charitable Assessment, James R. Hines Jr., Jill R. Horwitz, Austin Nichols Jan 2010

The Attack On Nonprofit Status: A Charitable Assessment, James R. Hines Jr., Jill R. Horwitz, Austin Nichols

Articles

American nonprofit organizations receive favorable tax treatment, including tax exemptions and tax-deductibility of contributions, in return for their devotion to charitable purposes and restrictions not to distribute profits. Recent efforts to extend some or all of these tax benefits to for-profit companies making social investments, including the creation of the new hybrid nonprofit/for-profit company form known as the Low-Profit Limited Liability Company, threaten to undermine the vitality of the nonprofit sector and the integrity of the tax system. Reform advocates maintain that the ability to compensate executives based on performance and to distribute profits when attractive investment opportunities are scarce …


The Multiple Common Law Roots Of Charitable Immunity: An Essay In Honor Of Richard Epstein's Contributions To Tort Law, Jill R. Horwitz Jan 2010

The Multiple Common Law Roots Of Charitable Immunity: An Essay In Honor Of Richard Epstein's Contributions To Tort Law, Jill R. Horwitz

Articles

Professor Epstein has long promoted replacing tort-based malpractice law with a new regime based on contracts. In Mortal Peril, he grounded his normative arguments in favor of such a shift in the positive, doctrinal history of charitable immunity law. In this essay, in three parts, I critique Professor Epstein’s suggestion that a faulty set of interpretations in charitable immunity law led to our current reliance on tort for malpractice claims. First, I offer an alternative interpretation to Professor Epstein’s claim that one group of 19th and early 20th century cases demonstrates a misguided effort to protect donor wishes. Rather, I …


Nonprofits And Narrative: Piers Plowman, Anthony Trollope, And Charities Law, Jill R. Horwitz Jan 2009

Nonprofits And Narrative: Piers Plowman, Anthony Trollope, And Charities Law, Jill R. Horwitz

Articles

What are the narrative possibilities for understanding nonprofit law? Given the porous barriers between nonprofit law and the literature about it, there are many. Here I consider two. First, nonprofit law and nonprofit literature are each enriched and made fully explicable by reference to the other. Nonprofit law has grown in parallel with literature. It may even be that important legal texts, texts about doing and being good, were imported directly from literary sources into law. Second, in writings ranging from sensational journalism to high literature, nonprofit laws and the scandals involving their violations have captured the public imagination for …


Letting Good Deeds Go Unpunished: Volunteer Immunity Laws And Tort Deterrence, Jill R. Horwitz, Joseph Mead Jan 2009

Letting Good Deeds Go Unpunished: Volunteer Immunity Laws And Tort Deterrence, Jill R. Horwitz, Joseph Mead

Articles

Does tort law deter risky behavior in individuals? We explore this question by examining the relationship between tort immunity and volunteering. During the 1980s and 1990s, nearly every state provided some degree of volunteer immunity. Congress followed with the 1997 Volunteer Protection Act. This article analyzes these acts, identifying three motivations for them: the chilling effects of tort liability, limits on liability insurance, and moral concerns. Using data from the Independent Survey’s Giving and Volunteering surveys, we then identify a large and positive correlation between immunity and volunteering. We next consider the implications of the findings for tort theory and …


Confidence In The Nonprofit Sector Through Sarbanes-Oxley-Style Reforms, Joseph Mead Mar 2008

Confidence In The Nonprofit Sector Through Sarbanes-Oxley-Style Reforms, Joseph Mead

Michigan Law Review

Over the past several years, the nonprofit sector suffered a series of highly visible scandals that shook the public's confidence in charitable organizations. Concerned politicians and nonprofit leaders responded with a variety of reforms inspired by the Sarbanes-Oxley Act. The Note focuses on three such reforms: requiring nonprofit officers certify financial statements, mandating audits of nonprofits' financial statements, and imposing independent audit committees on nonprofit boards of directors. This Note argues that, contrary to the conclusions of many commentators, these reforms will provide a net benefit to the nonprofit sector by increasing donor confidence while imposing minimal costs.


Does Nonprofit Ownership Matter?, Jill R. Horwitz Jan 2007

Does Nonprofit Ownership Matter?, Jill R. Horwitz

Articles

In recent years, policymakers have increasingly questioned whether nonprofit institutions, particularly hospitals, merit tax exemption. They argue that nonprofit hospitals differ little from their for-profit counterparts in the provision of charity care and, therefore, should either lose their tax-exempt status or adhere to new, strict, and specific requirements to provide free services for the poor. In this Article, I present evidence that hospital ownership-whether it is for-profit, nonprofit, or government owned-has a significant effect on the mix of medical services it offers. Despite notoriously weak enforcement mechanisms, nonprofit hospitals act in the public interest by providing services that are unlikely …


The Common Law Power Of The Legislature: Insurer Conversions And Charitable Funds, Jill R. Horwitz, Marion R. Fremont-Smith Jan 2005

The Common Law Power Of The Legislature: Insurer Conversions And Charitable Funds, Jill R. Horwitz, Marion R. Fremont-Smith

Articles

New York's Empire Blue Ccoss and Blue Shield conversion from nonprofic cofor­ profic form has considerable legal significance. Three aspects of the conversion ma.ke checase unique: the role of the scace legislature in directing the disposicion of the conversion assets, che face chac it made itself che primary beneficiary of chose assets, and the actions of che scace attorney general defending the state rather than che public inceresc in che charitable assets. Drawing on several cenruries of common Law rejecting the Legislacive power to direct the disposition of charitable funds, chis article argues chat the legislature lacked power cocontrol che …


Gifts, Gafts And Gefts: The Income Tax Definition And Treatment Of Private And Charitable 'Gifts' And A Principled Policy Justification For The Exclusion Of Gifts From Income, Douglas A. Kahn, Jeffrey H. Kahn Jan 2003

Gifts, Gafts And Gefts: The Income Tax Definition And Treatment Of Private And Charitable 'Gifts' And A Principled Policy Justification For The Exclusion Of Gifts From Income, Douglas A. Kahn, Jeffrey H. Kahn

Articles

Gifts have been given special treatment by the income tax laws since the first post-16th Amendment tax statute was adopted in 1913. The determination of how the income tax law should treat gifts raises a number of issues. For example: should gifts be given special treatment? If so, what should qualify as a gift? Should gifts to a private party be taxable to the donee? Should gifts to a private party be deductible by the donor? Should the donee's basis in a gift of property be determined by reference to the basis that the donor had, and should any modifications …


Why We Need The Independent Sector: The Behavior, Law, And Ethics Of Not-For-Profit Hospitals, Jill R. Horwitz Jan 2003

Why We Need The Independent Sector: The Behavior, Law, And Ethics Of Not-For-Profit Hospitals, Jill R. Horwitz

Articles

Among the major forms of corporate ownership, the not-for-profit ownership form is distinct in its behavior, legal constraints, and moral obligations. A new empirical analysis of the American hospital industry, using eleven years of data for all urban general hospitals in the country, shows that corporate form accounts for large differences in the provision of specific medical services. Not-for-profit hospitals systematically provide both private and public goods that are in the public interest, and that other forms fail to provide. Two hypotheses are proposed to account for the findings, one legal and one moral. While no causal claims are made, …


Does Charity Begin At Home? The Tax Status Of A Payment To An Individual As A Charitable Deduction, Michigan Law Review Apr 1985

Does Charity Begin At Home? The Tax Status Of A Payment To An Individual As A Charitable Deduction, Michigan Law Review

Michigan Law Review

In White v. United States, the United States Court of Appeals for the Tenth Circuit reversed a district court decision and held that the taxpayers could deduct expenses they paid directly to their dependent son to support his missionary activities away from home. In Brinley v. Commissioner, the Tax Court sitting in Texas refused to follow the Tenth Circuit in White, and held that while the missionary son was entitled to deduct his personal expenses, the parents could not deduct their payment of the son's expenses.

This Note supports the result in Brinley and argues that the …


Irs Denials Of Charitable Status: A Social Welfare Organization Problem, Michigan Law Review Dec 1983

Irs Denials Of Charitable Status: A Social Welfare Organization Problem, Michigan Law Review

Michigan Law Review

This Note argues that the courts and the Service should recognize social welfare organizations as charitable and, consequently, contributions to such organizations should be tax deductible. Part I describes the Service's position and sets forth the statutory arguments supporting it. Part II raises two objections to the Service's position: (1) the distinction between social welfare organizations and charitable organizations lacks an adequate statutory justification, and (2) this distinction produces unpredictable and arbitrary results. Part III proposes that all social welfare organizations be accorded charitable status under subsection 50l(c)(3). This proposal would eliminate the arbitrary results now reached by the Service, …


Delegation Of Investment Powers By Charitable Trustees, Richard B. Urda Jr. Jan 1974

Delegation Of Investment Powers By Charitable Trustees, Richard B. Urda Jr.

University of Michigan Journal of Law Reform

Over the past few years the activities of philanthropic organizations have been undergoing considerable critical scrutiny. Congressional committees, private commissions, and individuals have extensively analyzed institutionalized charity. An area of particular concern involves problems created by the investment policies of charitable organizations. One investment problem that has not received much attention, however, is the plight of the natural person trustee of a charitable trust who, in general, is legally prohibited from delegating his responsibility for investment of trust funds. Almost one-third of all charitable foundations take the legal form of trusts. Of the foundations organized as charitable trusts, over 60 …


Damage Liability Of Charitable Institutions, Carl Zollman Feb 1921

Damage Liability Of Charitable Institutions, Carl Zollman

Michigan Law Review

The question of the liability of charitable institutions to actions for damages presents great difficulties. This is not due how- -ever to a lack of cases. The question has peculiarly "engaged the attention of the bench and bar of the country. The problem has been scrutinized from every conceivable viewpoint. The arguments for and against have well nigh been exhausted, and little, if anything, new remains to be advanced".' In their opinions the courts have frequently gone back to certain English cases disregarding the points decided but stressing certain dicta which have been uttered by the judges which decided them. …