Incorporating Non-Profits into the Business Associations Course

Nonprofit organizations employ roughly 10 million Americans (or about 6% of the US workforce) and represent approximately $621 billion in revenues.  That said, my quick look through of the TOCs of several business associations/corporations textbooks reveals no coverage of the topic.

This year, I decided to spend a two-hour class on the subject for several reasons.  First, per the statistics above, nonprofit entities comprise an important sector of the economy.  Second, many law grads go on to either work for nonprofits or will represent nonprofits, either as paying clients or on a pro bono basis, so this background is vital. Third, the name of the course is “business associations,” and a non-profit is most definitely a form of “business association.”  Finally, the material greatly aids in understanding (by comparison and contrast) what a for-profit corporation is all about.

Thanks to some advice a couple years ago from non-profit guru Norman Silber (Hofstra), I assigned the class Community Blood Bank of Kansas City v. FTC, 405 F.2d 1011 (8th Cir. 1969); J.W. McFarlan, Working on Nonprofit Boards: Don’t Assume the Shoe Fits, Harv. Business Rev. (1999); and Peter Frumkin & Elizabeth Keating, The Price of Doing Good: Executive Compensation in Nonprofit Organizations.

I think incorporating this subject matter is important and long overdue, but again I come back to the question of why this material is traditionally not covered in the "cannon."  I suppose it’s not on the bar, but then neither are many of the intricacies of sec reg law, and yet many of those regs are included in the textbooks (and I think rightly so).  Is leaving out non-profits an oversight, then, or a result of ideological bias?

p.s. Apologies for the bad pun in the title.

Comments

[roger dennis]

Great post for biz org teachers and for the law profs among us who serve on non-profit boards (you do serve dont you?). I might add the new IRS 990 form raises the stakes on board activities around executive compensation.

[Harwell Wells]

Thanks Miriam--I have been wondering about how to work a (little) nonprofit law into my corps class, and may well try these materials when I teach it again next spring.

[Miriam A. Cherry]

I've helped a number of non-profits over the years, but I have not, myself, served on BOD. I keep moving, (occupational hazard), and so I haven't developed a close tie with that many community organizations. Something that's on my "to do" list.

[Elizabeth Leonard]

We cover non-profit business org and tax in Health Care Financing & Regulation. Pretty essential.