Ken Paxton

Charities and Nonprofits: Enforcement

The Office of the Attorney General represents the public interest in charity and acts to protect that interest. Texas has more than 50,000 active charitable organizations and countless trust entities over which the Attorney General has oversight authority.

The Attorney General's responsibilities include:

  • investigating and initiating legal action against charitable organizations, their directors and/or their professional fundraisers to ensure that charitable donations and assets are lawfully raised and expended;
  • reviewing transactions involving the sale or conversion of non-profit, charitable corporations to for-profit entities or status; and
  • reviewing all legal proceedings involving charities pursuant to Texas Property Code §123.002. Chapter 123 provides the Attorney General with standing to intervene in any proceeding involving a charity on behalf of the interest of the general public of this state.

Problems that the Attorney General frequently investigates include:

  • illegal use of charitable funds;
  • diversion of charitable trust funds from their intended purpose;
  • sale of a charity or conversion of a non-profit corporation to "for profit" status at a price that is unfair to the charity;
  • excessive amounts paid by a non-profit corporation or charitable trust for salaries, benefits, travel and entertainment; and
  • self-dealing transactions either between a director and/or trustees and the non-profit corporation.

The Attorney General does not generally investigate:

  • homeowners' associations and other non-profit membership benefit corporations;
  • matters involving internal labor disputes, contested elections and disagreements between directors and/or members over policy and procedures;
  • claimed violations of religious laws or doctrine by churches or religious corporations.