Journal of Law & Practice

2 Wm. Mitchell J.L. & Prac. 2

By: Myron L. Frans & Lucinda E. Jesson

I.   Introduction

On April 15, 2008, we published our article, What Qualifies as a Public Charity? Minnesota Enters the National Debate, describing the increased governmental scrutiny of nonprofits and Minnesota’s significant entry into that national discussion. Our article concluded with practical suggestions, particularly for governing boards of the category of nonprofits known as “purely public charities”, as they navigate uncertain waters due to state and national developments.

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2 Wm. Mitchell J.L. & Prac. 1

By Lucinda E. Jesson and Myron L. Frans ψ

Introduction

The last two years featured seismic shifts in nonprofit corporate law. With two recent cases, Under the Rainbow Child Care Center, Inc. v. County of Goodhue and Afton Historical Society Press v. County of Washington, the Minnesota Supreme Court entered the fray.[1] In this article, we first address the backdrop of federal and state scrutiny of nonprofit structure and governance. Next we examine the Under the Rainbow and Afton Historical Society cases.[2] We then suggest measures Minnesota nonprofits and their attorneys should consider preparing for potential challenges to tax exempt status as a “pure charity.” Finally, we reflect on the potential for broader legislative and regulatory challenges to nonprofit structure and governance given the current scrutiny of nonprofits. Read the rest of this entry »