There Ought to Be a Law: The Disclosure Focus of Recent Legislative Proposals for Nonprofit Reform

This Article explores and evaluates the disclosure focus of recent legislative proposals for nonprofit reform. It begins by describing legislative proposals under consideration in various states and the U.S. Senate Finance Committee. This summary demonstrates the emphasis these proposals place on disclosure as a technique for enhancing nonprofit accountability. The Article then evaluates the ability of such disclosure mechanisms to achieve nonprofit accountability gains by improving the behavior of nonprofit actors, facilitating nonprofit enforcement by regulators or others, or both.

Unfortunately, due to the structure and characteristics of nonprofit organizations and the resources available for nonprofit enforcement, this analysis reveals that disclosure-based reforms alone will do little to improve nonprofit accountability. Thus, the Article concludes by urging legislators to refocus their reform energies around invigorating enforcement, and to adopt disclosure-based reforms only when they will complement enforcement efforts without undermining nonprofits' ability to pursue their missions.