Daniel J. Hemel (New York University School of Law) has posted Madisonian Nonprofit Law (64 Harvard Journal on Legislation, forthcoming 2027) on SSRN. Here is the abstract:
The nonprofit sector is often described as a counterweight to the state. But how exactly do nonprofit organizations check and balance public power? This essay argues that nonprofits constrain government not only by confronting agencies as adversaries but also by supplementing public services and by insinuating themselves into the state’s administrative apparatus as indispensable contractors. The essay also identifies a previously overlooked way in which nonprofit organizations—from amateur sports leagues to hierarchical religious orders—socialize active citizens and stabilize political institutions: by teaching the distinctively democratic “art of losing,” without which peaceful transitions of power become impossible. The essay’s framework exposes deep tensions in nonprofit law and policy. The charitable contribution deduction, for example, strengthens nonprofits’ ability to resist government pressure but may undermine civic skill-building by encouraging professionalization over volunteer governance. The Johnson Amendment—which prohibits section 501(c)(3) organizations from endorsing candidates for public office—facilitates political depolarization but constrains political mobilization. Limits on the commercial activities of nonprofit organizations maintain a degree of separation between the nonprofit and for-profit sectors—strengthening one aspect of the intersectoral system of checks and balances—but potentially require nonprofits to become even more reliant on government. State attorney general oversight of the nonprofit sector bolsters donor confidence but also creates risks of ideologically motivated enforcement. A “Madisonian” perspective on nonprofit law—one that foregrounds the role of nonprofits in the intersectoral system of checks and balances—can help legislators and practitioners weigh tradeoffs among competing democratic values. A Madisonian perspective also reveals that interbranch and intersectoral checks and balances are co-constitutive: traditional Madisonian institutions depend on norms cultivated by the nonprofit sector, while nonprofits rely on legislative and judicial protection to counterbalance executive power. In this way, Madisonian nonprofit law both builds upon and sustains Madisonian constitutional law.
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