1. The NYS non-Profit revitalization act
November 2015

2. Committees Generally Committees:
Eliminates standing v. special committee distinction
Retains distinction between committees of the board (board members only)
Committees of the corporation (non-board members permitted to serve) – advisory only
Chair restriction:
Employee may not serve as chair of the Board – delayed effective date until January 1, 2017.

3. Real Property Transactions
Old Law
Purchase, sale, mortgage or lease of any real property required approved 2/3 approval of entire Board, unless 21 or more directors, then majority of entire
New Law
Purchase, sale, mortgage, lease, exchange or other disposition can be delegated to committee unless real property that is, or would upon acquisition, be all or substantially all of the assets (still required approval of 2/3 of entire Board)
Only applies to sale, mortgage, lease, exchange or other disposition of the organization’s real property

4. Electronic Communications
Old Law
Members notice by mail, in person or by publication (more than 500 members)
Board meeting notice by any manner provided in By-laws
New Law
Member meeting notice by and fax, note requirements for non-delivery
Publication now includes posting on organization website

5. Audit: Committee Old Law:
No NYS requirement; IRS suggests but does not require
New Law:
Staged NYS requirements tied to charitable solicitation registration
Committee of the Board
Independence standard for committee members
Volunteer fire/ambulance companies exempt from charitable solicitation registration unless paid professional fundraiser used

6. Governance: Conflict of Interest Policy
All nonprofits impacted
No specific form of policy required
Annual statements required
Required provisions
Define conflict of interest
Disclosure procedures
Related party cannot be part of deliberations
Documentation
Policy adopted and overseen by “independent directors”
Existing policies that are substantially consistent

7. Governance: Related Party Transactions
Related Party defined - incorporates Code Section 4958 for key employees
Process prescribed
Disclose material facts of relationship
Related party absent from discussions and vote
Board or independent board committee approval
Standard
Transaction fair, reasonable and in best interests
Consideration of alternative transactions for charities
Attorney General authority to bring action to enjoin or rescind

8. Governance: independent directors
Directors who:
 (a) are not, and have not been within the last three (3) years, compensated as an officer or employee of the Corporation or an Affiliate;
(b) do not have a relative who is, or has been within the last (3) years, a “key employee” of the Corporation or an Affiliate;

9. Governance: independent directors (con’t)
(c) have not received, or had a relative who received, total compensation exceeding $10,000 in any of the last three (3) fiscal years from the Corporation or an Affiliate (excludes reimbursement for expenses reasonably incurred or reasonable compensation for service as a director pursuant to New York Not-for-Profit Corporation Law Section 202(A));
(d) is not a current employee of or does not have a substantial financial interest, or does not have a relative who is a current officer or has a substantial financial interest, in an organization that made payments to, or received payments from, the Corporation or an Affiliate for property or services exceeding the lesser of $25,000 or 2% of such organization’s consolidated gross revenues in any of the last three (3) fiscal years(payment does not include charitable contributions).

10. Governance: Whistleblower Policy
Nonprofits affected
Twenty or more employees
Annual revenue in excess of $1 million in prior fiscal year
Contents
System to report potential illegality, fraud or violation of any adopted policy of the corporation
Prohibit retaliation
Distribution to all directors/trustees, officers, employees and volunteers who provide substantial services to the corporation
Compliance with other laws may suffice

11. Q & A Anita Pelletier Nixon Peabody LLP 1300 Clinton Square
Rochester, NY 14604