New Dissolution Guidelines
During 2010, Massachusetts adopted changes to the statute governing dissolutions of charitable corporations. Under prior law, all charitable corporations seeking to dissolve were required to obtain the approval of the Supreme Judicial Court (SJC). Under the revised statute, corporations with no net assets are permitted to dissolve through an administrative dissolution petition filed with the Attorney General’s office. In addition, the revised statute authorizes the SJC to permit administrative dissolutions for charities with net assets below a certain threshold (with such threshold to be determined by SJC rules). No SJC action has yet been taken to implement this provision.
New Rule Permits Non-Judicial Modification of Some Donor-Restricted Gifts
The SJC has adopted a new rule, effective January 1, 2011, allowing non-judicial modification of certain restrictions in a gift instrument of a qualifying endowment. The rule was enacted pursuant to the Uniform Prudent Management of Institutional Funds Act (adopted in Massachusetts in 2009) and applies to institutions seeking to modify an institutional fund (such as an endowment) that has been in existence for 20 years or longer and has a total value of $75,000 or less at the end of its last fiscal year. If the fund qualifies, the following modifications to a gift instrument may be made without petitioning the court: (a) modification of a restriction contained in a gift instrument on the management, investment, or duration of the institutional fund; or (b) modification of the purpose of the institutional fund or the restriction on the use of a fund in an administrative cy pres proceeding. To apply for such modifications, an institution should submit a Form PC-IF with required supporting documentation.
Changes in Filing Requirements for Small Charities
The Nonprofit Organizations/Public Charities Division has long required all organizations filing the annual MA Form PC to attach a completed IRS Form 990 or Form 990-EZ to the Form PC, even when the organization was not required to file the IRS form. For fiscal years beginning on or after December 31, 2010, the Division will no longer require organizations with gross support and revenue of $5,000 or less to attach a completed Form 990 or 990-EZ to the Form PC.