Court Finds Fair Dealership Laws Applicable to Nonprofits

The 7th Circuit Court of Appeals recently issued an important legal decision that could affect many nonprofit organizations. In Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States, Inc., the Court held that state fair dealership laws are applicable in the case of the Girl Scouts of the United State’s dealings with its chapters. While this was a relatively narrow ruling, the standards set could have wider implications for nonprofits that have chapters and affiliates.

Creating Nonprofit Chapters and Affiliates

Successful nonprofits looking for ways to make their programs more widely available often look to grow by creating chapters and affiliates in other geographic areas. Nonprofit organizations that are organized geographically into chapters that are share a name, trademarks and mission are frequently referred to as “federated organizations.”