On December 18, 2013, New York State Governor Andrew Cuomo signed the Nonprofit Revitalization Act of 2013(the Act) into law, triggering the first overhaul of the New York Not-for-Profit Corporation Law (N-PCL) in more than 40 years.

The Act modernizes and streamlines the N-PCL while boosting nonprofit governance and oversight to alleviate unnecessary burdens, save taxpayer dollars, prevent fraud and enhance public trust in the state’s nonprofit organizations. While the majority of the Act’s provisions govern nonprofit entities that are incorporated in New York, the financial reporting and auditing sections also apply to organizations that engage in charitable solicitation in New York from other states. The Act will take effect on July 1, 2014.

New York State Attorney General (AG) Eric Schneiderman’s office declared in a statement that the Act “gives New York the strongest nonprofit governance regime in the country” by:

• Ensuring sound financial management;

• Preventing conflicts of interest;

• Strengthening the AG’s power to police fraud and abuse;

• Ensuring board independence; and

• Promoting good governance.

Please see our prior advisory for detailed information about the key provisions of the Act.

While the Act makes significant changes to the operation and governance of nonprofit organizations, it does not target executive compensation reform. Another bill, the Executive Compensation Reform Act, was introduced in the last legislative session but did not make it past the committee level. As we discussed in a recent New York Law Journal article, New York Cracks Down on Executive Compensation for Not-for-Profits, the introduction of the bill signals that statutory executive compensation reform is likely imminent.