chapter  5
16 Pages

Transition to a New Regime

ByNorman I. Silber

Many organizations and institutions contributed to changing the place of voluntary groups in American life during the 1950s and 1960s, but courts played the central role in reforming the way nonprofit corporations were created and supervised by the states. The mechanical operation of the new conception supposed that states would cease trying to screen out unworthy nonprofit groups when they applied for a charter or, in the parlance of some states, "registered to do business as a nonprofit corporation". Judicial power to review the purposes of nonprofit corporations lingered in one area of law, notwithstanding the legal sea change. It proved especially hard for judges to disassociate personal interests from professional tasks when it came to reviewing the creation of legal entities that wanted to become nonprofit corporations. Administrative consents soon became more problematic than judicial ones to obtain, and the standards for withholding consents allowed broad administrative discretion. This discretion was narrowed by judicial interpretation and migrated once more.