Course Section | Columbia Law School

Section Description Provided by Instructor

(writing credit)

Prerequisite: L6231 Corporations.

This seminar broadly examines the function and rationale for nonprofit institutions in American society. What do they do and why is it done by them rather than private commercial enterprises or government entities? In this connection, a brief examination is made of the size and significance of this "third sector" and of the characteristics of the various types of nonprofit organizations (i.e., social groups, hospitals, arts organizations, educational institutions and foundations). Considerable attention is given to the taxation of nonprofit organizations, including a consideration of the rationale for charitable exemptions, the unrelated business income tax and the impact of the 1969, 1986 and 1993 Tax Reform Acts. In addition, consideration is given to the use of the corporate form by nonprofit organizations: the advantages that accrue from such use, and alternative methods of organizing in a nonprofit manner. Comparisons are made with commercial enterprises.

The seminar deals with the lawyer's role in forming, chartering, obtaining a tax exemption for, and providing counseling to nonprofit organizations. Some time is spent discussing proper goals of nonprofit institutions and the role and responsibilities of their directors and officers. An examination is made of the ways nonprofit organizations are misused and of the various methods used by the government to regulate them. Policy issues that concern nonprofit institutions in general are covered, including restrictions on their spheres of activity, tax and antitrust policies, new forms of private and public finance, and the rights of various parties to bring suit.