New York Attorney General Eric T. Schneiderman has introduced a bold plan to reform and revitalize New York’s nonprofit sector, including legislation to eliminate outdated and costly burdens on nonprofits, strengthen oversight and accountability, and reaffirm his office’s commitment to policing fraud and abuse. Acknowledging that organizations throughout New York State face 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.

In 2011, Attorney General Schneiderman convened a Leadership Committee for Nonprofit Revitalization with 32 nonprofit leaders across the state to recommend proposals that would reduce regulatory burdens on nonprofits, while strengthening governance and accountability. Today’s legislative and reform initiatives, announced at a breakfast forum hosted by Crain’s, are responsive to the committee’s recommendations. They include the Nonprofit Revitalization Act, to be proposed by the Attorney General, and two initiatives, “New York on BOARD” and “Directors U,” designed to improve nonprofit governance. The Attorney General’s Charities Bureau, led by Bureau Chief Jason Lilien, will assist in the development and promotion of these initiatives. The Attorney General’s proposed Nonprofit Revitalization Act represents comprehensive reform to New York’s nonprofit laws. It would enhance oversight of nonprofits by their boards, provide new tools to the Attorney General to stop fraud and abuse, and reduce unnecessary burdens long-plaguing nonprofits in New York.

Schneiderman’s legislation would enact a number of key reforms, including:

Streamlining bureaucratic processes to expedite formation of nonprofits in New York 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Modernizing outdated requirements, such as permitting the use of technology to facilitate more efficient operations and to reduce costs;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 enhanced 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; and
Requiring that nonprofits adopt conflict-of-interest and whistleblower policies.

Schneiderman has also launched “New York on BOARD,” a new director recruitment initiative to build stronger and more diverse boards for nonprofits. Throughout New York State, nonprofits are facing increasing challenges in recruiting talented directors needed to ensure proper oversight; the entity is a partnership through which New York’s business community will expand its already substantial philanthropic leadership, he believes. Companies that pledge to get “on board” would agree to create programs that encourage their employees to serve on nonprofit boards and be matched with nonprofits. It is envisioned that New York on BOARD’s recruitment efforts will be expanded to the state’s academic communities and retiree population. The program will be administered by the Association for a Better New York (ABNY), and developed by a steering committee whose initial membership includes: Bloomberg LP, Cushman & Wakefield, First Niagara Bank, Lazard, and Loews Hotels.

An additional new initiative designed to improve director education called “Directors U” will provide training to nonprofit directors that is free or of minimal cost, and easily accessible. Directors U will create an online library of seminars and materials covering a full range of nonprofit subjects, which will be supplemented by a series of live, in-person trainings.

Dean Harry C. Katz of Cornell University’s School of Industrial & Labor Relations, said, “Cornell University and our academic partners are eager to work on this exciting initiative with the Attorney General. This new and innovative program will help nonprofits educate and train their board members about nuances of sometimes complex nonprofit laws and practices. Directors U will help make sure that directors are comfortable in performing critical oversight.”

Directors U will be administered through a consortium of academic institutions, including: Adelphi University, Long Island Center for Nonprofit Leadership at Adelphi University; Baruch College, School of Public Affairs; Binghamton University, College of Community and Public Affairs; Columbia University, the School of International and Public Affairs; Cornell University, Institute for Compensation Studies, ILR School of Cornell University; The New School, Milano School of International Affairs, Management, and Urban Policy; New York University School of Law, National Center on Philanthropy and the Law; University at Albany, Rockefeller College of Public Affairs & Policy; and Yale University, Millstein Center for Corporate Governance and Performance. The Attorney General’s Office will provide support for the consortium’s work and help conduct training programs.

The Attorney General’s Committee for Nonprofit Revitalization, whose diverse membership includes 32 individuals from organizations large and small, from upstate and downstate, is reflective of the full breadth of New York’s nonprofit sector. The Committee also includes several of the leading nonprofit practitioners in the country.

The Committee developed 38 concrete recommendations, which it presented to the Attorney General in a report entitled “Revitalizing Nonprofits / Renewing New York.” The Committee’s report formed the basis for today’s announcement. The Committee’s membership includes:

Seema Agnani, Chhaya Community Development Corporation
Sharon Ball, Broome County Arts Council
Joseph Benincasa, The Actor’s Fund
Victoria Bjorklund, Simpson Thacher & Bartlett LLP
Cali Brooks, Adirondack Community Trust
Ronna Brown, Philanthropy New York
Richard Buery, The Children’s Aid Society
Michael Clark, Nonprofit Coordinating Committee of New York
Cecilia Clarke, Sadie Nash Leadership Project
Michael Cooney, Nixon, Peabody LLP
Clotilde Perez-Bode Dedecker, Community Foundation for Greater Buffalo
Alisa Robbins Doctoroff, UJAFederation of New York
Peter Dunn, Central NY Community Foundation
Fatima Goldman, Federation of Protestant Welfare Agencies
Robert Greenspan, New York Hotel Trades Council & Hotel Association of NYC
Susan Hager, United Way of New York State
Rosanne Haggerty, Community Solutions
Richard Hobish, Pro Bono Partnership
Karen Brooks Hopkins, Brooklyn Academy of Music
Michael Kosnitzky, Boies, Schiller & Flexner LLP
Jack Krauskopf, Center for Nonprofit Strategy and Management at Baruch College
Jennifer Leonard, Rochester Area Community Foundation
Elba Montalvo, The Committee for Hispanic Children and Families
Gwen O’Shea, Health & Welfare Council of Long Island
Lee Perlman, Greater New York Hospital Association
William Rapfogel, Metropolitan Council on Jewish Poverty
Claire Rosenzweig, Better Business Bureau
Doug Sauer, New York Council of Nonprofits
Michael Stoller, Human Services Council
Monsignor Kevin Sullivan, The Catholic Charities of the Archdiocese of New York
Bishop Mitchell Taylor, East River Development Alliance
Ann Marie Thigpen, Long Island Center for Nonprofit Leadership, Adelphi University The Attorney

General’s Committee for Nonprofit Revitalization report is available online here: http://www.ag.ny.gov/media_ center/2012/feb/NP%20Leadership%20Co mmittee%20Report%20(2-16-12).pdf

A.G. Schneiderman Sets “Bold Plan” For New York’s Nonprofit Sector

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