Law and the Independent Sector

Syllabus

Law and the Independent Sector:

A Class in Not-for-Profit Organizations

Spring Semester, 2017

Tuesday/Thursday

9:00 am – 10:20 am

Room 205

I.Course Description:

The Independent Sector denotes those organizations which have been variously labeled "non-profits" (NPOs (Nonprofit Organizations); "N.G.O's" (nongovernmental organizations); "not-for-profits;" E.O.'s" (exempt organizations under the federal tax code) and "the Third Sector" (in contradistinction from governmental ("public sector") organizations and "for profit" (or "private sector") organizations, "civil society" and the "Independent Sector."

The Independent Sector encompasses myriad and diverse organizations along a broad spectrum: private universities and hospitals; religious, arts, social services; social clubs and civic institutions. In framing the nonprofit sector, we will see that within the sector there aredifferent legal categories of nonprofits: charitable and noncharitable; operating and grant making. We will investigate the laws that pertain to each category as we explore the boundaries, topography and demographics of the sector. The format of the course begins with an overview of the legal framework that defines all nonprofit associations and the various fieldsof law that impact them. The focus of the course then narrows to consider legal issues particularly applicable to social service organizations. The course, then, pinpoints actual legal problems facing the social service community. Academic coverage of these legal issues will be supplemented by media coverage of current events within the Sector. Legal concepts will be reinforced through writing exercises.

This course is designed as a 3-hour class/seminar with an exam option. The purpose of the course is five-fold: 1) to introduce students to the legal framework of nonprofit law; 2) to target additional employment opportunities for students in the burgeoning arena of the Independent Sector; 3) to develop skills in performing the kinds of legal services law firm attorneys practice; 4) to attain a broader understanding of how U.S. society operates under the separate but overlapping jurisdictions of public, private and nonprofit law; and 5) to reinforce/explain concepts introduced in Basic Corporate Law as they apply to nonprofit associations.

II.Suggested Prerequisite:

None, but Basic Corporate Law is helpful.

III.Grading:

A.Seminars:

For those of you who have selected the seminar option, grades will be based primarily on the submission of three to six law firm memoranda addressing nonprofit legal issues. Aschedule and description of these assignments will be distributed in class.

B.Final Exams:

For those of you who have selected the exam option, the exam will be distributed the last day of this class and must be turned in to the Faculty Support Center on or before the last day of the exam period by 5:00 p.m.

C.Homework:

For both sections of the class (A and B, supra.) short homework exercises may be assigned to reinforce basic concepts. Homework exercises are optional. Bonus points will be awarded for excellent work.

D.Class Attendance:

Class attendance is required. More than three unexcused absences will result in a lowered grade.

E.Bonus points:

Bonus points will be awarded for thoughtful and substantial class participation. It is expected that each student will have read the assigned materials foreach class session. Questions may be asked of students in class on a random basis.

IV.Reading Materials:

The doctrinal and substantive law of nonprofit organizations will be covered by way of the Fishman & Schwarz text identified below.

A.Required Text: Fishman & Schwarz, Nonprofit Organizations5th ed.

The following texts supplement the text and address key issues in the nonprofit world.

B.Highly Recommended:

1.Smith & Thurman, A Billion Boot Straps (paperback);

2.Mohammad Yunus, Creating a World Without Poverty (paperback).

C.Recommended:

1.Model Nonprofit Corporations Act 3rd ed. (paperback)

D.Handouts:

In class hand-outs will be distributed from time to time to reinforce and update legal issues.

V.Availability of Professor:

Feel free to schedule conferences with me. I welcome both individual and small group discussions in my office. My office is C-South and I can be reached at my office number, 631- 3193, or at my e-mail address: .

VI.Topics for Discussion and Assignments:

A.Week #1

1.Introduction to the Course

a.Scope of the Independent Sector

b.Historical overview and traditional role of the Independent

Sector in American society.

c.The ongoing Revolution in the nonprofit/N.G.O. sector.

d.The Importance of Mission an Introduction

e.Legal Framework

- Text: pp. 1-45

- Hand-outs.

B.Week #2

1.Choice of a legal form of a not-for-profit organization.

a.The not-for-profit corporation: Public Benefit vs. Mutual Benefit Associations

b.Organization and dissolution

c.Powers and purposes

d.Other organizational options

e.Conversion from non-profit to for-profit status

- Text: pp. 50-58; 63-69; 73-85; 89-107

- Hand-outs

C.Week #3

1.Governance Issues

a.Boards

b.Fiduciary Duties

- Text pp. 109-117; 120-130; 144-162; 171-176; 181-182; 184-192; 193-195; 199-209; 215-216

D.Week #4

1.Governance issues, continued

Text pp. 219-232; 235-263

2.State and Federal Regulation of Charitable Solicitation

a.Constitutional constraints on regulation: the evolution

of case law doctrine

b.Proposals for reform

- Text: pp. 243-274; 284-292

E.Week #5

1.Tax Exemptions of "Public Benefit" Organizations under the I.R.C.

a.Purpose of the exemptions

b.Qualifying requirements

c.501(c) (3) and Private Benefit Limitations.

- Text: pp. 271–276; 289; 291-296; 299-311; 320 -324; 326-330; 333-335;337; 342

F.Week #6

1.Tax exemptions (cont'd)

a.Public Policy Limitation; inurement; private benefit; intermediate sanctions

- Text: pp. 344-369; 371-383; 387-398; 404-408; 411-415

G.Week #7

Tax issues continued - Lobbying and Political Campaigns

a.Inurement, Private Benefit, Intermediate Sanction

- Text: pp. 432-442; 445-473

H.Week #8

Tax Issues completed

- Text: pp. 476-495; 500-524

I.Week #9

1.Computation of the UBIT Tax (Commercial Activities)

2.UnrelatedDebt-Financed Income

3.Special Problems in UBIT planning

- Text pp. 527-542; 544; 549; 553-554; 560-575; 577-582

J.Week #10

No Class – Spring Break

K.Week #11

1.Commercial Activities - completed

2.Private Foundations - Introduced

- Text: pp. 588-592; 604; 616; 620-639; 641; 645; 646

L.Week #12

1.Private Foundations

- Text: pp. 649-665; 666-676; 679-687; 691-697; 702-705

M.Week #13

1.Charitable Contributions

- Text: pp. 745-760; 766-767; 775-783; 823

N.Week #14

Special Problems of Mutual Benefit Organizations

- Text: pp. 835-853

O.Week #15

- Text: pp. 885-886; 890-910; 911-932; 932-936; 948; 977

T.B.A. - Exams Distributed – Due Last day of Exams.

Written Memos Due

DROP DEAD DATE

ALL PAPERS AND HOMEWORK EXERCISES DUE APRIL 25,

AT 5:00 p.m. IN THE FACULTY SUPPORT CENTER

FINAL EXAMINATION: DISTRIBUTED IN CLASS THE LAST DAY OF CLASS

DUE IN THE FACULTY SUPPORT CENTER BY 5:00 p.m. ON

THE LAST DAY OF EXAMS

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