Research Handbook on Not-For-Profit Law
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Research Handbook on Not-For-Profit Law

Edited by Matthew Harding

This Research Handbook provides a comprehensive overview of scholarship on not-for-profit law. The chapters, written by world leading experts, explore key ideas and debates in relation to: theories of the not-for-profit sector, the composition and scope of that sector, not-for-profit organisations and the constitution, the legal conception of charity, the tax treatment of not-for-profit organisations and the regulation of not-for-profits. The book serves to represent not-for-profit law as a field of academic inquiry, and to point the way to future research in that field.
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Chapter 22: Principles of regulation of not-for-profits

Jonathan Garton


This chapter asks whether there is anything special about not-for-profit regulation as opposed to regulation generally, regulation of the third sector (of which the not-for-profit sector is a part), or regulation of the charity sector (which is a sub-set of the not-for-profit sector). The chapter argues that if not-for-profit regulation is to be distinguished from regulation generally, it must be because of its special interest in policing compliance with the non-distribution constraint, not because of any interest it has in minimizing harmful externalities. It also argues that the regulation of some third sector organizations, such as co-operatives, properly differs from the regulation of not-for-profits because of the distinctive market failures associated with those organizations. Finally, the chapter argues that charities should not be singled out for special regulatory treatment because, from the economic perspective that should underpin sound regulation, they are not substantively different from other not-for-profits; the fact that they are legally distinct is neither here nor there.

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