Nonprofit Organizations Law Commons^™

The Nonprofit Health Care Corporation Reform Act Of 1980, David L. Hollister, Patience A. Drake

University of Michigan Journal of Law Reform

In recent years, Blue Cross/Blue Shield has been the subject of considerable controversy. Its critics charge the non-profit, tax-exempt corporation with being unduly secretive, arrogantly unresponsive to consumer interest and not vigorous in its cost containment efforts. These criticisms, along with a variety of other factors, led to the legislative reform I am here to talk to you about this evening.

Discriminatory Membership Policies In Federally Chartered Nonprofit Corporations, Michigan Law Review

Michigan Law Review

Since 1791 the United States has created federal corporations by specific acts of Congress. These corporations fall into three general types, including corporations organized in the District of Columbia, corporations that carry out a federal governmental or public function, and private nonprofit corporations that undertake educational, charitable, historical, cultural or similar purposes. About fifty groups comprise the third category, including the American National Red Cross, the Girl Scouts of America, the Boy Scouts of America, the United States Olympic Committee, the American Legion, the Veterans of Foreign Wars of the United States (VFW), and the Little League.

Recently, the discriminatory …

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 …

Religious Corporations And The Law, Paul G. Kauper, Stephen C. Ellis

Michigan Law Review

This article will attempt to present a picture of the legal status of religious organizations, with particular reference to the enjoyment of the corporate privilege. Necessarily, this will involve at the outset an historical review tracing the development of that status, beginning with the practice of granting special charters to churches and culminating in the now familiar general incorporation statute. Special attention will be paid to distinctive problems that arose in Utah, Pennsylvania, and Virginia concerning corporate status. The historical review is followed by a summary survey of the current state laws relating to the incorporation of churches. The last …

The United States Post Office, Incorporated: A Blueprint For Reform, Stanley Siegel

Michigan Law Review

For several generations, the United States Post Office has been the textbook demonstration of the inefficiency of the government in business. To some, the solution to its problems lies only in turning over its functions to free enterprise. A more constructive and politic approach is to inquire whether a structural arrangement falling somewhere between that of a governmental department and that of a privately owned business would permit the Post Office to achieve some of the efficiencies of private enterprise without compromising the most essential elements of public responsibility. This approach has been given new timeliness by the proposal of …

Foundations And The Patman Committee Report, John E. Riecker

Michigan Law Review

It is the purpose of this article to evaluate the major points of the first, and main, installment of Congressman Patman's Report in the light of existing Internal Revenue Code provisions, Treasury regulations, and the more significant federal court decisions and Internal Revenue Service rulings. While the Report itself is more inclusive, space limitations dictate that this article be confined to section 501(c)(3) organizations-chiefly foundations, tax-exempt funds, and charitable trusts. Although the writer will strive to be objective, it is difficult to avoid some of the political gloss in which the Report is cast and impossible to discuss the ramifications …

Taxation-Federal Income Taxation-The Three-Party Sale And Lease-Back, Lawrence R. Velvel S.Ed.

Michigan Law Review

The so-called sale and lease-back device has long been the subject of judicial and governmental scrutiny. The Internal Revenue Service has recently decided to begin a more active campaign of enforcement against a certain three-party variation of the sale and lease-back device. The structure of this variation can be best understood by considering the following hypothetical situation.

Taxation-Federal Income Tax-Religious Order Not Exempt From Supplment U Tax As A Church, Alan Rothenberg

Michigan Law Review

Plaintiff, a non-profit, membership corporation consists of members of the Christian Brothers Order, and was established to furnish religious and secular education to youth. The Catholic Church considers religious instruction to be the performance of a church function, and property of the Christian Brothers Order is church property according to Roman Catholic canon law. During the taxable years in question plaintiff owned and operated a novitiate, Catholic schools, homes for the Brothers, and a winery and distillery. Plaintiff was assessed and paid $489,800.83 as a Supplement U tax on its unrelated business income realized from the winery and distillery operation. …

Municipal Corporations - Tort Liability - Duty To Protect Informers, Thomas A. Kauper S.Ed.

Michigan Law Review

Decedent Schuster supplied information to the police which led to the arrest of the notorious Willie "The Actor" Sutton. After decedent's part in the arrest was widely publicized he received threats against his life. He demanded police protection, which was denied on a belief that the threats were not seriously made. Three weeks later the decedent was shot and killed by an unknown assailant. Plaintiff, administrator of decedent's estate, sued the defendant city to recover damages for wrongful death. The supreme court dismissed the complaint, and the appellate division affirmed. On appeal, held, reversed, three judges dissenting. The complaint …

Nonprofit Corporation Statutes: A Critique And Proposal, Ralph E. Boyer

Michigan Legal Studies Series

The nonprofit corporation has become an important factor in the social and economic life of the American people. The American predisposition to organization and affiliation has led to an enormous number of such organizations, which in itself is a significant factor. Further, many nonprofit corporations have become national and international entities yielding tremendous economic and political influence. In spite of these factors, however, these organizations have largely escaped the serious study and academic analysis so generously bestowed upon the regular business corporation. This study is directed at an analysis of the legal framework within which such organizations operate. Its aim …

Dispositions Of Property To Unincorporated Non-Profit Associations, Harold A.J. Ford

Michigan Law Review

It now becomes necessary to examine the cases in which the disposition could not be treated as one to the existing members. This treatment will disclose that some courts have been prepared to regard some dispositions to associations as being for the purposes of the association. The only way in which property may be devoted to a purpose without conferring beneficial interests on particular individuals is by a trust. Accordingly in many instances the disposition takes effect as a trust.

Dispositions Of Property To Unincorporated Non-Profit Associations, Harold A.J. Ford

Michigan Law Review

The aim of this article is to examine the ways in which courts in common law countries have given this assistance and the problems they have encountered in regard to property transactions.

Taxation - Federal Estate Tax - Deductibility Of Contingent Bequests To Charity, Jack G. Armstrong S.Ed.

Michigan Law Review

Testator bequeathed a remainder interest to charitable organizations which was contingent upon her sister, age eighty-two, predeceasing two other women, ages sixty-seven and sixty-eight. The Commissioner disallowed a deduction for this bequest on the ground that it was not certain that charity would receive any benefit. In the district court the parties stipulated that there was an eleven to one chance that charity would receive the bequest. On the basis of this stipulation the district court found for the taxpayer. On appeal, held, reversed. In order for a deduction to be allowed the possibility that charity will not take …

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. …

Liability To Third Persons Of Associates In Defectively Incorporated Associations, Joseph L. Lewinsohn

Michigan Law Review

The principles underlying the obligations to third persons of the members of defectively incorporated associations, are few and not difficult of apprehension. Yet there is hardly a topic in the law of private corporations upon which the views of both courts and theoretical writers dre in more disagreement. This disagreement is concerned largely with three questions, namely: What is the basis and scope of the doctrine of de facto corporations? Are persons dealing with the associates on a corporate basis estopped to deny the corporate character of the association? Are the associates ipso facto liable as partners? Upon all of …

Note And Comment, Harry B. Hutchins, Edwin C. Goddard

Michigan Law Review

The Liability of Charitable Corporations for the Torts of Their Servants; the Powers of General and Special Agents; Municipal Ordinances Licensing Trades and Occupations; "Sic Utere Tuo Ut Alienum Non Laedas"; Interference with the Formation of Contracts; The Right of Directors to Use Corporate Funds in Getting Proxies From the Stockholders; Sales Void for Uncertainty and Lack of Mutuality; The Negotiable Instruments Law as Affecting the Discharge of Accommodation Maker and Surety by Extension of Time of Payment