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Recent changes in federal and state laws governing non-profit charitable organizations are transforming the rules under which they operate and the methods by which they and their fiduciaries are held accountable to government and the public. These changes include relaxing the rules prohibiting donors from bringing legal suits to enforce the terms of their gift or agreeing to modify restrictions; liberalizing the doctrines of cy pres and deviation under which charitable purposes and methods for administering them may be revised due to changed circumstances; imposing new duties on directors of charitable corporations and redefining the scope of their duties of loyalty and care. The Pension Reform Act of 2006 changed some of the IRC provisions dealing with charities and others are being considered in the Congress. Recommendations to increase federal and state regulation are also being considered together with proposals for expanding the breadth of self-regulation. The paper describes these changes and their proponents. It concludes with observations on their efficacy and the likelihood of their being adopted.This publication is Hauser Center Working Paper No. 33.8. Hauser Working Paper Series Nos. 33.1-33.9 were prepared as background papers for the Nonprofit Governance and Accountability Symposium October 3-4, 2006.

The attorneys general in each of the states have broad powers to regulate nonprofit, tax exempt charitable organizations. In ten states there us active enforcement of the duties of loyalty care of charitable fiduciaries, while in another twenty-nine, the attorney general oversee charitable fundraising. This paper describes the operations of these state offices, the advantages and shortcomings of state regulation, and recent changes in the laws. It contains suggestions for changes in both state and federal law to improve accountability of the charitable sector. This publication is Hauser Center Working Paper No. 41. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers.

The ability of U.S. museums to borrow for exhibition works of art from museums owned by foreign governments is seriously threatened under a ruling of the Federal District Court for the District of Columbia in the case of Malewicz v. City of Amsterdam that is now on appeal. If upheld, future cultural exchanges may be seriously curtailed; in fact, there is evidence that the case has already had a chilling effect on the willingness of foreign lenders to permit their works of art to travel to the United States. The case in question involves works of art lent by the city of Amsterdam to two U.S. museums that, under the terms of the 1965 Immunity from Seizure Act, were protected from seizure while in the United States. At issue in the case is a separate statute, the Foreign Sovereign Immunity Act, under which foreign governmental entities whose property is at any time in the United States are immune from suit here unless the property involves a violation of international law and commercial activity. The District Court held that the Immunity from Seizure Act only protects works of art from seizure; it does not preclude suits for damages against the owners; and that the loan of art works to U.S. museums is commercial activity as that term is used in the Foreign Sovereign Immunity Act. In order to assure continued cultural exchanges, legislation is needed that will extend the Immunity from Seizure Act to protect a foreign owner from any suit based on the presence of artwork in the United States that has received protection under the Act.This publication is Hauser Center Working Paper No. 42. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers.

This paper presents the results of a survey of newspaper reports published between 1995 and 2002 of incidents involving allegations of criminal and civil wrongdoing by officers and directors of charitable organizations. Of the one hundred and fifty-two incidents found, one hundred and four entailed criminal activity, fifty-four involved breaches of the duties of loyalty and prudenceself-dealing, failing to carry out the mission of the charity, and negligent management of assetswhile six fell into both categories. The authors set forth the limitations of a study of this nature and point to problems of governance that emerged from their findings.This publication is Hauser Center Working Paper No. 20. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers.