WHAT YOU NEED TO KNOW
THE REVISED ILLINOIS
BY JED R. MANDEL AND KIMBERLY A. PENDO
ILLINOIS GOV. PATRICK QUINN RECENTLY SIGNED INTO LAW SENATE BILL 1390, NOW KNOWN AS
PUBLIC ACT 96-0649. SIGNED ON AUG. 24 AND TAKING EFFECT ON JAN. 1, 2010, THE BILL
UPDATES THE ILLINOIS GENERAL NOT-FOR-PROFIT CORPORATION ACT OF 1986.
The passage of SB 1390 marks the culmination of a nearly
three-year public policy effort led by the Forum to bring about
important change to the way in which not-for-profit organizations are governed.
Among the most important updates included in SB 1390
are provisions that: make it easier for associations to electronically hold elections; enhance board governance and operations;
simplify the demonstration of actions taken by unanimous
written consent of the board; and increase the amount not-for-profits can compensate volunteer directors without the loss of
limited liability protection.
In early January 2008, a task force of Forum members began
critically reviewing the act to determine if and how it could be
improved for the benefit of all not-for-profit organizations incorporated in Illinois. After conducting a comprehensive review
of the act, with extensive input from not-for-profit executives,
practitioners and others familiar with its workings, the task force
identified the key provisions that it felt could and should be
improved. The intent was to take the act — generally considered
one of the best not-for-profit acts in the country — and update
it to reflect the realities of the not-for-profit arena, make electronic communications easier to use, and incorporate certain
best practices. The task force developed specific statutory revisions and recommended to the Forum’s Board of Directors that
the Forum spearhead efforts to revise the act.
With the approval of the board, the task force prepared
legislative language and enlisted the Forum’s lobbyist, Randy
Witter of Cook-Witter Inc., to garner support for the proposed
amendments from other stakeholders, including the Illinois
Society of Association Executives. Under the chief sponsorship
of Illinois Sen. A.J. Wilhelmi (D-Crest Hill), SB 1390 was
introduced with all of the Forum’s proposed changes. Following adoption in the Senate, SB 1390 also passed the House
under the chief sponsorship of Illinois Rep. John Fritchey (
D-Chicago). After 18 months of hard work, Gov. Quinn signed
SB 1390 into law. Thanks to the efforts of the Forum, ISAE
and other key stakeholders, the entire Illinois not-for-profit
community will reap the benefits of the improved act.
While the Forum believes that the act and its amendments
provide an excellent set of statutory provisions under which to
organize and operate a not-for-profit corporation, the Forum
also felt that a number of the act’s provisions could be improved
by providing additional clarity and flexibility, or simplification.