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Reviewing Nonprofits and Charitable Trusts/Gifts

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Tennessee law requires nonprofit organizations to notify the Attorney General of certain extraordinary events, namely the merger of a nonprofit organization with a for-profit company, the sale of substantially all of a nonprofit organization's assets to a for-profit company, or the dissolution of a nonprofit organization.

Tennessee law requires notice to the Attorney General of these events at least 20 days prior to the close of the event. Once notice is given, the Attorney General's Office will request information from the nonprofit organization about the transaction. Depending on the size of the transaction, the information request may be brief or extensive.

Model information requests are available for review using the links below but may be tailored if the specific transaction is unusually large or complex. The Attorney General's Office will then review the information provided to make sure that nonprofit assets are being protected consistent with Tennessee law. In particular, the Attorney General's Office will evaluate the transaction to determine if the nonprofit organization is receiving fair market value for its assets.


Public Benefit Hospitals

In 2006 the Tennessee General Assembly passed the Public Benefit Hospital Sales and Conveyance Act. Under the new act, any nonprofit or community-owned hospital must provide written notice to the Attorney General 45 days before selling or transferring control of its assets. The hospital must also certify that each member of its board has been given a copy of the Public Benefit Hospital Sales and Conveyance Act of 2006.

Once the Attorney General receives notice of a proposed hospital sale or transfer, the Office of the Attorney General will request additional information from both the seller and buyer concerning the transaction. In addition, within five days of receipt of notice by the Office of the Attorney General, the hospital must also publish notice of the proposed transaction in at least one local, widely read newspaper. As with other transactions involving nonprofit organizations, sales of public benefit hospitals must be fair to the nonprofit or governmental organizations involved.

Persons wishing to comment on a proposed hospital transaction may do so by writing directly to the Attorney General at 425 Fifth Avenue North, Nashville, Tennessee 37243.

Charitable Trusts/Gifts

Charitable trusts are trusts created for the relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes or other purposes the achievement of which is beneficial to the community. Charitable trusts are subject to the provisions of the Tennessee Uniform Trust Code, and may also be subject to the provisions of the Charitable Beneficiaries Act of 1997, the Uniform Prudent Investors Act, and the Uniform Prudent Management of Institutional Funds Act.

Under the Charitable Beneficiaries Act of 1997, the Attorney General is given the duty to represent the interest of charitable beneficiaries, potential charitable beneficiaries and the people of the State of Tennessee in all proceedings involving charitable gifts, including charitable trusts. In addition, under the Uniform Trust Code, the Attorney General is given the status of a qualified beneficiary. As such, the Attorney General is required to be a party in any judicial or nonjudicial proceeding involving a charitable trust.

 

IRS Form 990-PF

The Internal Revenue Service requires private foundations to provide copies of Form 990-PFs to state attorneys general. To determine whether your foundation must send a copy of its 990-PF to the Tennessee Attorney General's Office, consult the IRS website. Mail copies of the forms to the following address:

Tennessee Attorney General
Attn: Library
P. O. Box 20207
Nashville, TN 37202-0207