• Oregon nonprofit corporations must adhere to certain ethical standards.dictionary definition - profit image by Chad McDermott from Fotolia.com
  
  Nonprofit corporations differ from their "for-profit" counterparts most basically in that they exist for a primary reason other than turning a profit--and sometimes enjoy exemption from state and federal taxes, depending on what this purpose is. Chapter 65 of Oregon's revised statutes establishes only a very basic definition of what a nonprofit's purpose should entail, but sets forth stringent ethical standards for the state's nonprofit corporations.
  
  

Purpose

• As the name suggests, a nonprofit's "Articles of Incorporation" establish it as a business entity. Section 65.047 of Oregon's revised statutes mandates that every nonprofit corporation within the state claim either "public benefit," "mutual benefit" or "religious" corporation status in its articles. Although section 65.047 goes on to require that said corporation state its intended purpose of operation, section 65.074 leaves the scope of this purpose broad--in fact, it states that a nonprofit corporation may operate in Oregon for "any lawful purpose" unless it explicitly limits that purpose within it articles of incorporation. While Oregon's own statutes stop short of qualifying the term "charity", section 65.036 does prohibit "mutual benefit" (private) corporations from making any investments which might compromise the charity requirements set forth by federal Internal Revenue code.
  
  

Ethics

• Although Oregon's law could be read as non-restrictive when it comes to defining nonprofit corporations, the portions of its statutes governing these corporations' ethics are considerably more stringent. Sections 65.361 and 65.364 deal with director and officer conflicts of interest and fiscal accountability, respectively. Specifically, the former characterizes an transaction "in which a director of the corporation has a direct or indirect interest" as a conflict of interest and allows for these transactions only with express permission of the attorney general, either solely or as a party to the circuit court. Section 65.364 delves further, barring nonprofits from making loans or guarantees to directors or officers (or for their benefit), unless the entire board of directors can determine that allowing it would benefit the nonprofit as a whole.
  
  

Religious Corporations

• Oregon law imposes basic limitations on religious corporations. Specifically, section 65.042 establishes that these organizations may follow their internal rules and regulations before those set forth by the state of Oregon only to the extent allowed by the U.S. Constitution--or the Oregon State Constitution, if its rules are more restrictive.