VI. When Nonprofits Must Provide Notice to the Attorney General
I. Introduction II. Laws that Govern Charitable Organizations III. Laws that Govern Professional Fundraisers IV. Laws that Govern Charitable Trusts V. Minnesota-Organized Nonprofits and Charitable Gambling VI. When Nonprofits Must Provide Notice to the Attorney General VII. Uniform Prudent Management of Institutional Funds Act Appendix
Charities, charitable trusts, personal representatives, and Minnesota-organized nonprofits must give prior notice to the Attorney General’s Office of certain types of intended transactions and activities pursuant to the Charitable Trust Act, (79) the Minnesota Nonprofit Corporation Act, (80) the Minnesota Limited Liability Company Act, (81) and the Uniform Prudent Management of Institutional Funds Act. (82)
Prior Notice of Matters Involving Charitable Trusts
The Charitable Trust Act, Minn. Stat. §§ 501B.33-.45, requires persons to give prior notice to the Attorney General’s Office of the following types of court proceedings implicating charitable trusts: (83)
- to construe the terms of an instrument with respect to a charitable trust;
- to modify or depart from the objects or purposes of a charitable trust, including in a cy pres proceeding and as discussed in Minnesota Statutes section 501B.31;
- to review an accounting of a charitable trust submitted by a trustee;
- to liquidate or distribute the assets of a charitable trust;
- to terminate a charitable trust; and
- proceedings in which the interests of uncertain or indefinite charitable beneficiaries in a charitable trust may be affected.
Trustees of court-supervised charitable trusts who are required to file annual accountings with the court must also provide a copy of the accounting, including individual and combined statements, to the Attorney General’s Office. (84)
Minnesota law permits interested persons to a trust to enter into a nonjudicial settlement agreement regarding the trust if the settlement could be properly approved by the court. (85) Because a settlement agreement resulting from a court proceeding involving a charitable trust is not valid unless the Attorney General’s Office joined the settlement or declined to participate in it, (86) parties intending to enter into a nonjudicial settlement agreement relating to a charitable trust should provide to the Office prior notice of the proposed settlement.
Prior Notice of Probate Matters Involving Charitable Bequests or Devises
The Charitable Trust Act, Minn. Stat. §§ 501B.33-.45, requires personal representatives to give prior notice to the Attorney General’s Office of the following types of probate matters involving charitable bequests or devises: (87)
- a bequest or devise for charitable purposes in excess of $150,000;
- a bequest or devise for a charitable purpose for which there is no named charitable beneficiary;
- a bequest or devise to a charitable beneficiary in receivership; or
- upon a written request served on the personal representative by a named charitable beneficiary prior to the order allowing the final account or, in unsupervised proceedings, within 30 days after service of the final account on the charitable beneficiary.
If prior notice is required, the personal representative of the estate must provide the Attorney General’s Office a copy of the probate petition and the will being offered for probate. (88)
Prior Notice of a Minnesota Nonprofit’s Intent to Dissolve, Merge, Consolidate, Convert, or Transfer Assets
The Minnesota Nonprofit Corporation Act, Minn. Stat. ch. 317A, requires Minnesota-organized nonprofit corporations that are tax exempt under section 501(c)(3) of the Internal Revenue Code or that hold assets for a charitable purpose to notify the Attorney General’s Office prior to dissolving, merging, consolidating, converting into a different nonprofit organization, or transferring all or a substantial portion of their assets. (89) Unless the time period is waived, the nonprofit must then wait 45 days before consummating the intended transaction. (90) The same notification requirements apply to Minnesota nonprofit limited liability corporations. (91) The Office provides a form—Notice of Intent to Dissolve, Merge, Convert, Consolidate, or Transfer Assets—that nonprofits should use to satisfy these notice requirements. The only exception to this notice requirement is if the transaction is a merger with, consolidation or conversion into, or transfer of assets to another organization tax exempt under section 501(c)(3). (92) Corporations excepted from this requirement must still provide a copy of the certificate of merger, consolidation and incorporation, or conversion to the Office. (93)
Notice Under UPMIFA
As discussed further in the next section, the Uniform Prudent Management of Institutional Funds Act requires prior notice to the Attorney General’s Office of any proceeding seeking to modify or release a restriction on an institutional fund. (94)