At this year’s Annual Meeting on May 20, members of The American Law Institute voted to approve Tentative Draft No. 3 of Restatement of the Law, Charitable Nonprofit Organizations. Today’s vote marks the completion of this project.
This Restatement addresses legal issues faced by nonprofit institutions, including choice of form, governance, changes to purpose and organization, gifts subject to restrictions, government regulation of charities, and standing of private parties.
“This Restatement is meant to cover a large body of law. It addresses the birth, life, and death of charitable nonprofit organizations,” said ALI Project Reporter Jill R. Horwitz, Professor of Law at the UCLA School of Law. “It’s an important project for the ALI to undertake because charities touch the lives of so many people across the country and the law that governs charities is so poorly understood.”
In addition to Professor Horwitz, Nancy A. McLaughlin, Robert W. Swenson Professor of Law at the University of Utah S.J. Quinney College of Law, served as the project’s Associate Reporter, and Marion R. Fremont-Smith of Harvard University, Kennedy School of Government, served first as a Reporter on the project before taking on the role of Consultant.
“A great deal of wealth in the United States is controlled by charitable nonprofit organizations,” said ALI Director Richard L. Revesz. “These entities play significant roles in fields as diverse as education, health care, religion, social services, and the arts. The completion of a first Restatement in such an important area is an enormous accomplishment, and I want to express my great appreciation to Jill, Nancy, and Marion for their tireless and very effective work.”
“One of the most wonderful parts of this process is the number and variety of people with whom you collaborate,” said Associate Reporter Nancy A. McLaughlin. “We have the Members Consultative Group, Advisers, the ALI Council, and the broader ALI membership, and through this process we receive invaluable comments from judges, practitioners, regulators, and academics. The result, this Restatement, reflects that collaboration and diversity of perspectives.”
With the approval of the draft, the Reporters will now prepare the Institute’s official text for publication. Until the official text is published, this and previous Tentative Drafts, which have now all been approved by ALI’s Council and membership are the official position of ALI, and may be cited as such.