Simone Lawson
Charities exist in a legal grey area between the public and private sectors. While they are not government actors limited by constitutional law, they are also not 'free' of societal responsibility in the same way that private entities are. Attorneys general are the primary protectors and regulators of nonprofits in their states, ensuring that charitable corporations comply with legal requirements, that their assets are properly managed and spent, and that directors and officers fulfill their fiduciary obligations. This raises the question of how constitutional principles are applied to charities.
| Characteristics | Values |
|---|---|
| Charities exist in an undefined space between government and private entities | Charities are not government actors limited by constitutional law principles |
| Charities are not completely "free" of societal responsibility | Charities are subject to the same societal responsibilities as other private entities |
| Attorneys general are responsible for ensuring charitable corporations comply with legal requirements | Charitable corporations are subject to legal requirements |
| Attorneys general are responsible for ensuring charitable assets are properly managed and spent | Charitable assets are subject to management and spending requirements |
| Attorneys general are responsible for ensuring directors and officers fulfill their fiduciary obligations | Directors and officers are subject to fiduciary obligations |
| Attorneys general have the authority to pursue relief against directors who violate their fiduciary duties | Directors who violate their fiduciary duties are subject to relief |
| Attorneys general have the authority to dissolve the nonprofit organization | Nonprofit organizations are subject to dissolution |
| Attorneys general work with organizations to institute new processes to address previous problems | Organizations are subject to new processes to address previous problems |
| Attorneys general have broad regulatory and enforcement authority over charitable solicitation | Charitable solicitation is subject to regulatory and enforcement authority |
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What You'll Learn
- Charities are not government actors limited by constitutional law principles
- Charities are not completely free of societal responsibility
- Attorneys general are responsible for ensuring charitable corporations comply with legal requirements
- Charities are subject to the law if they hold assets for charitable purposes
- Attorneys general have the power to fight abuses by individuals and organisations that solicit charitable donations
Charities are not government actors limited by constitutional law principles
Charities are subject to state statutory and common law, which governs charitable trusts. Attorneys general are responsible for ensuring that charitable corporations comply with legal requirements, that their assets are properly managed and spent, and that directors and officers fulfil their fiduciary obligations. They also serve as protectors of charitable trusts and charitable assets whenever they are held in trust, including charitable interests in wills and in endowment funds.
In some cases, attorneys general work with organisations to institute new processes to address previous problems. For example, if a social club or fraternal organisation holds a fundraising event for a charitable purpose, such as the creation of a college scholarship fund, the money it collects is held as a charitable trust and is subject to the law.
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Charities are not completely free of societal responsibility
Attorneys general are the primary protectors and regulators of nonprofits in their states. They are responsible for ensuring that charitable corporations comply with legal requirements, that their assets are properly managed and spent, and that directors and officers fulfill their fiduciary obligations. This includes ensuring that charitable trusts and assets are properly managed and that charitable interests in wills and endowment funds are protected.
In addition, attorneys general have the authority to pursue relief against directors who violate their fiduciary duties and to dissolve the nonprofit organization if necessary. They also work with organizations to institute new processes to address previous problems.
Furthermore, charities that hold assets for charitable purposes, such as social clubs or fraternal organizations, are subject to the law. This includes foreign charitable corporations doing business or holding property in certain states, such as California. Overall, while charities may not be directly bound by constitutional law, they are still subject to significant regulatory oversight and are expected to uphold certain societal responsibilities.
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Attorneys general are responsible for ensuring charitable corporations comply with legal requirements
Charities exist in an undefined space between government and private entities, meaning that constitutional law principles do not directly apply to them. However, the Supreme Court has ruled that charities may not violate the principle of 'established public policy'.
Attorneys general are responsible for ensuring that charitable corporations comply with legal requirements. They are the primary protectors and regulators of nonprofits in their states. They ensure that charitable corporations use their revenues and assets to further the organisation's charitable purposes, and that their assets are properly managed and spent. Attorneys general also ensure that directors and officers fulfill their fiduciary obligations.
Attorneys general have the authority to pursue relief against directors who violate their fiduciary duties and to dissolve the nonprofit organisation. They can also work with organisations to institute new processes to address previous problems. In some cases, they may enter into a settlement that requires changes from the organisation, periodic reporting, or compliance monitoring.
Attorneys general also have the power to investigate and initiate legal action against charitable organisations and their managerial officials to ensure that charitable donations are lawfully solicited. They can review legal proceedings involving charitable trusts and initiate proceedings to distribute charitable assets left unattended or obtained through legal action. They also review transactions involving the conversion of nonprofit, charitable entities to for-profit entities.
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Charities are subject to the law if they hold assets for charitable purposes
Charities are also subject to state statutory and common law, which governs charitable trusts. Attorneys general serve as protectors of charitable trusts and charitable assets whenever they are held in trust, including charitable interests in wills and in endowment funds.
In addition, charities may not violate the principle of "established public policy". This means that charities are not completely "free" of societal responsibility in the same sense that other private entities are "free". As such, charities exist in an undefined space somewhere between government and private entities.
For example, in California, the law applies to all foreign charitable corporations doing business or holding property in the state for charitable purposes. This includes entities that are tax-exempt under other subsections of section 501(c), entities that are not tax-exempt, and for-profit entities that hold assets for charitable purposes.
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Attorneys general have the power to fight abuses by individuals and organisations that solicit charitable donations
Charities exist in an undefined space between government and private entities, meaning that constitutional law principles do not directly apply to them. However, the Supreme Court has ruled that charities may not violate the principle of 'established public policy'.
Attorneys general are the primary protectors and regulators of nonprofits in their states. They are responsible for ensuring that charitable corporations comply with legal requirements, that their assets are properly managed and spent, and that directors and officers fulfil their fiduciary obligations. Attorneys general have the authority to pursue relief against directors who violate their fiduciary duties and to dissolve the nonprofit organisation. They also have the power to fight abuses by individuals and organisations that solicit charitable donations. This includes the power to investigate and bring legal actions against charities and fundraising professionals that misuse charitable assets or engage in fraudulent fundraising practices. In many states, charities, charitable trusts, and fundraising professionals are required to register with the state government and provide financial reporting.
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Frequently asked questions
No, constitutional law principles do not directly apply to charitable organisations.
No, charities are not completely free of societal responsibility in the same sense that other private entities are free.
Something constitutional-like does apply to charitable organisations. For example, charities may not violate a principle called 'established public policy'.
Attorneys general are the primary protectors and regulators of nonprofits in their states. They are responsible for ensuring that charitable corporations comply with legal requirements, that their assets are properly managed and spent, and that directors and officers fulfil their fiduciary obligations.
