Friday, February 20, 2009
The February 20, 2009, issue of the New York Times has a interesting article about charities filing for bankruptcy. The article highlights specific charities as anecdotal evidence of increases in charity bankruptcy filings, but offers no statistical evidence of an increase. Here is an excerpt from the article:
Charities rarely go bankrupt, although there have been scattered examples involving nonprofit hospitals and Catholic dioceses facing lawsuits stemming from the priest sexual abuse scandals. Traditionally, insolvent organizations have simply closed their doors and filed a plan of dissolution with the charity regulator in their state.
But in the last six months, nonprofit groups that include cultural institutions and social service agencies have filed to reorganize or liquidate themselves under the bankruptcy code.
While no one has compiled data on how many charities have turned to the courts for protection, experts in the field say it has become more common as nonprofits have been pressured by donors to operate more like businesses.
For the entire story, see "Charities Now Seek Bankruptcy Protection" in the February 20, 2009, issue of the New York Times.