Document Type

Article

Publication Title

Oregon Law Review

Publication Date

2007

Abstract

The cultural and political demand for nonprofit financial accountability has grown rapidly in recent decades. At the same time, donations and gifts continue, apparently, to decline as a proportion of overall revenue received. To remain viable in this environment, many nonprofit groups are changing their operating models and organizational structures, the better to attract contracts, grants, and fee-for-service revenue. An under-appreciated consequence of the convergence of these accountability and viability challenges is an anti-consultative or anti-collaborative imperative. With increasing frequency, scholars, attorneys, and consultants are advising nonprofit groups that seek to comply with nonprofit laws and to enhance their financial performance, to turn away from the popular cultural traditions and from the legal norms that have, by and large, encouraged collaboration and consultation in the normal course of internal decision making and governance. This advice often entails the adoption of strategies for streamlining nonprofit governance along for-profit business principles, in order to augment corporate efficiency, and management development, in the name, ultimately, of service to the nonprofit mission. Until now, law has largely accommodated and encouraged transplanted business models with new statutory proscriptions, administrative guidelines, and with liberal common law interpretations of the older statutes which demote consultative values. It may be time for courts and legislatures to start to impose limits on the wholesale adoption of for-profit management and governance models in nonprofit organization.

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