The UUNAA: Benefits for Unincorporated Nonprofit Organizations

Until 1992, it was difficult for unincorporated nonprofit organizations to earn respect and validity in their communities. They were considered less than legitimate by most people because they had not incorporated, and were offered far less protection and privileges than incorporated nonprofit organizations. For this reason, the National Conference of Commissioners on Uniform State Laws (NCCUSL) drafted the Uniform Unincorporated Nonprofit Association Act (UUNAA).

The UUNAA is a way for unincorporated nonprofit organizations to gain respect in their communities despite the vague status of their legal structures. The NCCUSL recognized the fact that many unincorporated nonprofit organizations struggle to benefit their communities with little or no support from the public.

Under the UUNAA, unincorporated nonprofit organizations were given the legal status of a separate entity for the purpose of liability, which covers all directors, owners, employees and volunteers. This means that individuals who work for or promote an unincorporated nonprofit organization cannot be held liable for the actions of that organization just because of their involvement or support.

Not only that, but the UUNAA covers a broad definition for a nonprofit organization: "[Two] or more members joined by mutual consent for a common, nonprofit purpose". This means that the structure of the nonprofit organization does not have to be formal at all.

So far, only eleven of the states in the U.S. have adopted the UUNAA, though it is expected to grow exponentially over the next ten years. As more states realize the good that the UUNAA can do for unincorporated nonprofit organizations, they will adopt the same standards and begin to support those that work to help others. The states that currently have adopted the UUNAA are Alabama, Arkansas, Texas, Colorado, Wyoming, Wisconsin, Idaho, Hawaii, West Virginia, Delaware and District of Columbia.

The UUNAA gives unincorporated nonprofit organizations the following benefits:

(1) The organizations have the legal capacity to hold, distribute, receive and transfer both real and personal property;
(2) The organizations have limited liability for tort (personal injury) and contract claims;
(3) The organizations have the right to sue and to be sued as separate entities rather than individuals;
(4) There is a system in place for the disposal of property of inactive nonprofit organizations; and
(5) An agent of the organization (an owner, director, employee or volunteer) can be given the authority to act as service of process, which means that one individual can be designated to receive legal papers on behalf of the organization.

The UUNAA is a beneficial act that should be well-researched in the states where it has been adopted for unincorporated nonprofit organizations.