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• W3122167518 abstract "The boundary between charity and business has become a moving target. Social enterprises, philanthropy divisions of for-profit companies (most notably at Google), and legislation creating hybrid nonprofit/for-profit forms all use business models and practices to mold and pursue charitable objectives. This Article asserts that charity law must be streamlined in order to respond to these and other dramatic charitable innovations. My new vision of charity law centers around two essential requirements. First, charity law must continue to demand that charities maintain an other-regarding orientation, pursuing benefits for someone other than their own leaders and managers. Second, existing charity law must be revised and supplemented to mandate that charities utilize group governance. Additionally, this dual focus should be intensified by removing the limits on commercial and political activity that currently clutter charity law. These reforms will enhance charity law's ability to regulate traditional charities. Moreover, focusing charity law on its essentials will reveal the tools necessary to respond to the exciting developments blurring the boundary between charity and business. INTRODUCTION The boundary between charity and business has become a moving target. Google located its philanthropic efforts within its for-profit company, rather than in a traditional nonprofit foundation. Social entrepreneurs are forming for-profit companies to pursue environmental, educational, and public health objectives. Jurisdictions are creating hybrid forms of organization, which blend elements of a charity and those of a business enterprise. Scions of business speak of the need to incorporate social goals and responsibility into their models, in order to generate sustainable success. Yet, the serious shortcomings of current charity law thwart its ability to respond to these dramatic innovations. Legislators, regulators, and courts can enable charity law to do so by identifying and focusing on its essentials. So, what are charity law's essentials? First, one must unpack the concept of To be a charity, an organization must pursue a charitable mission as its dominant and overriding purpose. Notably, such charitable missions go well beyond almsgiving. They embrace a broad array of missions, each pursuing some vision of the good, and include entities as diverse as the American Red Cross, your local community theater, and most U.S. law schools. The ways an individual charity achieves its charitable mission can and should evolve in response to changing times and circumstances. Still, the mission imperative remains the touchstone of what is a charity. The problem with the mission touchstone, however, is enforcement. Accountability to mission is exceedingly difficult to measure and police. Perhaps some donors or patrons may be willing to monitor mission and withhold their support and patronage as a sanction, but these efforts will be limited and insufficient. Public enforcement threatens undesirable government influence on the content of charities' missions. Moreover, public enforcement of mission undermines charities' autonomy, the characteristic that enables them to be innovators, to take countermajoritarian positions, to serve the underserved. (1) Ultimately, charities must be trusted to police mission themselves. A key goal of charity law is thus to assist charity leaders and stakeholders in enforcing mission. Until now, discussions of charity law have argued the essential way that charity law does this is through the nondistribution constraint. A charity must reinvest its residual earnings in its mission to serve others, rather than route those earnings to individuals who possess organizational control. (2) Current charity law embodies this rule and the slightly more general idea that charities must use their assets to benefit some charitable class. This requirement that charities maintain an other-regarding orientation focuses charities on mission by declaring self-regarding behavior unacceptable. …" @default.
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• W3122167518 date "2011-02-01" @default.
• W3122167518 modified "2023-09-27" @default.
• W3122167518 title "Charity Law's Essentials" @default.
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