Culminating years of work led by UCLA School of Law professor Jill Horwitz, on May 20 the American Law Institute approved a comprehensive compendium of the legal issues that confront charitable nonprofit institutions.
The first Restatement of the Law, Charitable Nonprofit Organizations stands to have a profound impact on the more than one million charities in the United States, which range from hospital systems and universities to local theater groups and community food banks.
“This restatement represents a once-in-a-generation opportunity to clarify a complex and poorly understood area of the law,” says Horwitz, who served as the project’s reporter. “Charities law is so difficult because it is based on such a wide range of sources — federal and state, common law and statute, English statutes from the 17th century and contemporary tax law — and many courts and lawyers have only passing familiarity with some of these sources.”
A member of the UCLA Law faculty since 2012, Horwitz is among the nation’s leading scholars of nonprofits and health law and policy. For more than two decades, legislators and other officials have relied on her expertise as they have navigated the ins and outs of health care reform.
Her collaborators on the restatement included Nancy McLaughlin, the Robert W. Swenson Professor of Law at the University of Utah’s S.J. Quinney College of Law, who served as associate reporter; and consultants Daniel Bussel, a professor at UCLA Law, and Marion Fremont-Smith of the Hauser Center for Nonprofit Organizations at Harvard University’s John F. Kennedy School of Government.
“A great deal of wealth in the United States is controlled by charitable nonprofit organizations,” ALI director Richard L. Revesz said in a statement. “These entities play significant roles in fields as diverse as education, health care, religion, social services, and the arts.”
During her work on the project, Horwitz created a seminar in nonprofit law drafting that allowed UCLA Law students to contribute to the Restatement of Charitable Nonprofits and learn about the substantive law of charities. In the course, students gained experience in writing and revising precise legal rules, an appreciation of the common law, and skills in project management and group collaboration.
The ALI drafts and publishes restatements of the law and model codes for lawyers, judges, scholars, business people and others who work in, study and interact with key areas of legal practice. Restatements are treatises that inform readers about the black-letter law that underpins foundational topics, including contracts, torts, property and employment law.
In drafting a restatement, reporters examine court decisions, statutes, regulations and other primary authorities to compile an authoritative and exhaustive summary of the state of the law. The restatements are meant to address the law at its best.
Horwitz and her colleagues designed the Restatement of Charitable Nonprofits to mirror what she describes as the life cycle of a nonprofit organization. The treatise traces the birth, life and death of a charity. The final project includes sections on the definition of charity and choice of form; governance; changes to purpose and organization; dissolution, restrictions on charitable assets and enforcement of pledges; and standing of private parties.
The official text of the Restatement of the Law, Charitable Nonprofit Organizations will be published in 2020. In the meantime, earlier drafts may be cited as the official position of the ALI.