What is a congressional charter?

January 1, 2006 

A congressional charter is a law passed by Congress that states the mission, authority and activities of a group. Being chartered by Congress is like being incorporated at the federal level, and provides no assurance that the federal government will watch over the group.

Congress has issued federal charters since 1791, sometimes creating corporate entities but more often recognizing a wide range of groups that already are incorporated at the state level, according to the Congressional Research Service, a nonpartisan analytic arm of Congress.

Besides veterans groups, they include other fraternal groups such as the Girl Scouts of America, financial institutions such as Federal Reserve Banks and Fannie Mae and Freddie Mac, government corporations such as the Tennessee Valley Authority and nonprofit support groups such as the National Park Foundation and the National Trust for Historic Preservation.

Congress has chartered about 100 fraternal or patriotic groups.

The charters are largely honorific. The main attraction for national organizations "is that it tends to provide an `official' imprimatur to their activities, and to that extent it may provide them prestige and indirect financial benefit," according to a 2004 report by the Congressional Research Service.

To obtain a charter, a bill is introduced in Congress and must be voted into law. To be eligible for a charter, groups generally must engage in activities that are clearly in the public interest and be of a unique type. Although issuing new charters was banned in 1992, Congress has made exceptions over the years.

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