Nonprofit Law

"This work is ALI’s first project restating the law of charities. This area of the law implicates many subjects, including the laws of trusts, corporations, property, and state and federal constitutions. Although some of our projects, most notably the Restatements of Trusts, include Sections that address charities or mention nonprofits generally, none addresses the topic in a comprehensive manner...To the extent possible, this Restatement sets forth a single law for charities regardless of whether they are corporations, unincorporated associations, or charitable trusts, or whether they take some other legal form that a charity may adopt." The Restatement is intended "to provide comprehensive legal guidance to the people who donate to, benefit from, govern, and regulate charities."  --American Legal Institute (ALI) description

For more resources, see the Nonprofits page on our Secondary & Practice guide.

States that are of special interest in charitable nonprofit law:

• The states that place the most restriction on nonprofits:
  • New York
  • California

• The least restrictive state:
  •    Delaware (note: nonprofit corporations are "nonstock" corporations)

• State that generally has well-developed law on nonprofits:
  • Massachusetts

• States with large numbers of nonprofits:
  • Texas
  • Florida
  • Pennsylvania
  • Ohio
  • Illinois
  • Michigan
  • North Carolina
  • New Jersey

Above is a 50 state survey with links to state statutes for the organizational forms.

Many state nonprofit corporation laws are based on one (or more) versions of the Model Nonprofits Corporation Act.  This chart details the basis for state laws as of 2013. See also Governing nonprofit organizations: federal and state law and regulation by Marion R. Fremont-Smith.
Appendix, Table 1 (starting at p. 476).

In California, nonprofits register as a business with the Secretary of State.  In addition, many charitable nonprofits must file an initial registration form with the California Attorney General’s Registry of Charitable Trusts before fundraising.  

State Attorney Generals have oversight of charities; they are charged with acting in the public interest in regulating charities.  This is generally referred to as the parens patriae (parent of the state) power over charities. In some states other consumer protection agencies oversee charitable solicitation; the National Association of State Charity Officials (NASCO) maintains a list of these agencies. (See link below.)

For recent examples of state AGs engaged in charitable enforcement, see chapter 18 of the open textbook The Role of the State Attorney General by former Maine AG James E. Tierney.