Saturday, October 17, 2020
Patrick R. Baker (Tennessee), Paula Hearn Moore (Tennessee) & Kaleb Paul Byars (J.D. 2021, Tennessee), Nonprofit College Crash: Enforcing Board Fiduciaries Through Increased Accountability and Transparency in the IRS Form 990 Procedure, 2019 BYU Educ. & L.J. 167:
Private colleges are closing at an increasing rate due to mismanagement by their boards of directors. Because of inadequate standing to sue nonprofits and courts not questioning board decisions due to the business judgement rule, management of nonprofits is minimal after mishaps occur. Prevention measures must be established to ensure these breaches are prevented on the front-end. One solution is to strengthen IRS Form 990 by enforcing faster and more in-depth disclosures. This solution will allow stakeholders of nonprofits, such as Burlington College and Sweet Briar, to complete their due diligence, make informed decisions faster and more efficiently, and increase the likelihood that such educational institutions will survive and thrive.