An Update on New York Non Profit Sector Reforms
Attorney General Eric T. Schneiderman first introduced a plan in February to reform and revitalize New York’s nonprofit sector. A major component of that plan is the “Non Profit Revitalization Act” which was brought to the New York State Senate in May. The act is scheduled to take effect January 1, 2013. The attorney general’s plan includes legislation to eliminate outdated and costly burdens on nonprofits, strengthen oversight and accountability, and reaffirm his commitment to policing fraud and abuse. Acknowledging that organizations throughout New York have been facing historic financial and strategic challenges, the attorney general’s plan also includes several new partnerships with the business and academic communities to enhance nonprofit governance.
Schneiderman’s legislation includes a number of key reforms:
Streamlining bureaucratic processes to expedite the formation of nonprofits and approval of key nonprofit transactions;
Modernizing outdated requirements, such as permitting the use of technology to facilitate more efficient operations and to reduce costs;
Requiring that boards provide improved and independent oversight of executive compensation;
Increasing board responsibilities to oversee financial audits;
Enhancing the Attorney General’s tools to police self-dealing and other forms of corruption;
Requiring nonprofits adopt conflict-of-interest and whistleblower policies.
The Nonprofit Revitalization Act represents the most comprehensive reform to New York’s nonprofit laws in over 40 years. If implemented, it will revitalize the nonprofit sector by substantially reducing burdens and costs on nonprofits and strengthening governance and accountability.
What does this have to do with risk and insurance? Simple, risk comes in all sizes and shapes. Insurance is just one way to transfer risk. However, not all risk can be transferred to insure such a legislative risk. It’s important that you engage with a risk advisor who works in the Non Profit industry instead of purchasing insurance through a broker who simply handles a transaction that deals with only a small part of your risk.
We think this report is a critical read for anyone who works in or leads a Non Profit in New York. Make sure to give the full report a read and as always contact us with any questions you may have on how this could affect your non profit.
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