Nonprofit Revitalization Act of 2013 Signed by Governor Cuomo - December 2013
December 19, 2013
By: Frank J. Patyi
On December 18, 2013, Governor Cuomo signed the Nonprofit Revitalization Act of 2013 (the “Act”) passed by the New York State Legislature this past July. The Act will become effective July 1, 2014, and makes a number of significant changes to the law regarding nonprofit corporations. These changes will affect virtually every nonprofit corporation in the State of New York, including colleges and universities. The Act also makes numerous changes regarding internal controls, conflicts of interest, audit requirements and other governance issues. Some of the changes create greater restrictions, such as requiring all nonprofits to adopt written conflict of interest policies, and requiring nonprofits with 20 or more employees and annual revenue of more than $1 million to also adopt whistleblower policies. Other changes remove antiquated provisions that have complicated simple governance issues like conducting board meetings. For example, the Act specifically provides that facsimile and e-mail notices may be used for board and membership meeting notices and waivers, and confirms that they also may be used for votes that require unanimous written consent. It also allows board members to participate in meetings by video conference, Skype and other forms of video communication. By allowing the use of what has become readily available technology, the Act will help New York’s law conform with modern corporate realities of boards of directors that include members in far off locations who have difficulty attending regular meetings in person. The Act creates both opportunities and responsibilities for nonprofit organizations to review, update and improve their operational processes based on the new statutory requirements. This will require, among other things, the adoption of new policies and possible changes to organizational documents.
