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Nonprofit Revitalization Act signed into law

ALBANY – Overhauling the laws governing New York’s nonprofit sector for the first time in more than 40 years, the Nonprofit Revitalization Act of 2013 was signed into law last night by Governor Andrew Cuomo. Attorney General Eric Schneiderman joined Senator Michael Ranzenhofer (R-Amherst), Assemblyman James Brennan (D-Brooklyn) and nonprofit leaders from across the state in celebrating the enactment of the sweeping reform legislation. The Nonprofit Revitalization Act includes substantial reforms that will cut red tape while enhancing governance and oversight of nonprofits. The Attorney General’s program bill was sponsored by Senator Ranzenhofer and Assemblyman Brennan, and it passed overwhelmingly in both the Senate and Assembly in June.

Nonprofit organizations operating in New York generate hundreds of billions of dollars in annual revenue – more than any other state in the nation – and are responsible for one in seven jobs in New York State. Yet the lingering recession and slow economic recovery present unprecedented strategic challenges for nonprofits. The public’s trust in the nonprofit sector has also been tested, as stories of public officials and others abusing charities have emerged. The Attorney General’s bill will make New York competitive with other states in continuing to attract and nurture the most vibrant nonprofits in the world, and it will make New York a model for nonprofit governance and oversight.

“Our nonprofit sector is one of the jewels of New York State, providing a wide range of vital services to families and communities across the state,” said Schneiderman. “But for too long, outdated laws have burdened the sector in some areas, while providing too little oversight in others. I am proud of the work we’ve done with nonprofit leaders and the Legislature to transform our antiquated charities laws into a model for the nation. I am grateful to Senator Ranzenhofer, Assemblyman Brennan, Majority Leader Skelos and Speaker Silver for their leadership in guiding this bill to passage, and to Governor Cuomo for signing the legislation. I also thank the New York State Bar Association and countless nonprofit organizations that have worked for years to see this day.”

The Nonprofit Revitalization Act makes a number of key reforms to New York law that have long been sought by the charitable sector and legal practitioners. Nonprofit organizations will now be able to incorporate, dissolve and merge more easily; communicate and hold meetings using modern technology like Skype and videoconference, and enter transactions without having to go to court. At the same time, the bill includes crucial oversight and governance reforms that will help protect taxpayer dollars and preserve public trust. Nonprofit boards will have to perform stricter oversight of insider deals, and the Attorney General will be better able to hold insiders accountable for abuse. The bill requires the adoption of more robust financial oversight requirements, conflict-of-interest policies, and whistleblower policies to protect nonprofit employees from retaliation when they identify wrongdoing.