Nonprofit Lawyer – Legal Services for Not-for-profit & 501c3 Organizations
We work with not-for-profit businesses in every stage of development. Our attorneys help with entity formation, securing tax-exempt status, navigating complex state and federal tax rules, governance issues. We also act as outside general counsel for established charities; as-well-as representation for legal issues that arise from day-to-day operations, including litigation.
Our team of nonprofit lawyers has years of experience working with all sizes of 501c3 organizations and a strong record of helping them resolve difficult legal issues.
Our mission is to help you overcome all of the legal obstacles that are keeping your nonprofit from accomplishing its mission. Let us put our experience representing nonprofit organizations to work for you.
When you hire Walsh Banks Law, you gain access to trusted, experienced lawyers for strategic legal counsel and representation. Give us a call and find out how our legal services can help your nonprofit succeed (407) 259-2426 or Schedule a Consultation
Legal Services We Provide to Nonprofit Organizations
Nonprofits operate in a different economic environment than other businesses. Our law firm works with nonprofits to make sure their organization is setup as efficiently as possible and has the legal protections they need to operate effectively including obtaining and maintaining tax-exempt status and being able to conduct fundraising activities.
We work with groups at the beginning stages of starting a nonprofit business. We also provide long-term strategic guidance, advice on day-to-day legal issues, and representation in complex transactions and litigation for established organizations.
Startup Legal Services We Provide New Nonprofit Organizations
Starting a nonprofit business is complex and requires you to follow various state and federal rules. It is important that you have legal counsel with experience working with nonprofit entities guiding you through the process. Mistakes or oversights in the formation process can make it harder to receive tax exempt status and can even threaten your ability to run the charitable organization over the long-term.
Our nonprofit lawyers go beyond the paperwork. We will work with you on important strategic considerations as well. We offer advice about the best way to structure your board, who to select as directors, and the best policies and bylaws to make sure your organization stays complaint and on mission.
Some of the specific nonprofit formation services we offer include:
- Drafting and filing nonprofit articles of incorporation
- Drafting bylaws and conflict of interest policies specific to nonprofits and charities
- Handle all Legal work related to obtaining tax exempt status; including, drafting, filing, and managing applications for tax exempt status (501c status) from the IRS
- Completing Form 1023
- Completing Form 1023 EZ
- Completing Form 1024
- Drafting, filing, and managing applications for tax exempt status from State of Florida
- Registering for Charitable Solicitation
- Strategic advice on governance
- Advise on the organizational meeting of the board
- Provide materials needed for organizational meeting of the board
- Advise on insurance needs and risk management
- Consult on future compliance issues, tax letters, grant contracts, and other routine legal services
- Serve as your registered agent
- Obtaining federal employer identification number (EIN)
Legal Representation for Existing Nonprofit Organizations and Charities
Nonprofit organizations are still businesses. That means they have legal issues just like every other business. However, in addition to dealing with standard business legal issues, they must also constantly be aware of how their activities affect their tax-exempt status.
Our non-profit lawyers work with established 501c3 organizations to help them with all of their legal issues, including keeping them in compliance with changing regulations and issues unique to nonprofits.
Some of the legal services we provide to established nonprofit organizations include:
- Risk management strategies, including record keeping policies and indemnification practices
- Resolve board and other governance issues
- Prevent future legal liability by establishing legal guidelines and procedures for monitoring and reporting
- Advise on executive & employee compensation
- Review contracts
- Review tax filings
- Advise on insurance issues
- Develop grant-making practices
- Dealing with earned revenue from commercial activities
- Legal audits and checkups
- Review formation documents
- Advise on merger with or acquisition of entities; including hybrid for-profit/non-profit entities
- Ensure continued IRS compliance for 501(c) status
- Assessing conflicts of interest
- Advise on fundraising issues
What is a Nonprofit or 501c Organization?
In general, a nonprofit is a business that doesn’t generate profits for shareholders, but instead raises money for some kind of public good. However, under U.S. tax law, nonprofit has a much more specific meaning. Tax law allows nonprofit organizations to be exempt from paying income tax on the money they bring in, if they meet certain conditions. Nonprofits must apply for tax exempt status under section 501(c) of the IRS code. Sometimes nonprofits are referred to as 501(c) organizations. This simply means they have been granted tax exempt status.
There are 29 different types of tax exempt organizations under 501c. Of which the most common type is 501c3 organizations. These include public charities and private foundations.
The IRS is extremely strict about the requirements for obtaining any 501c tax exempt status. The organization must serve a public good. It must not declare a profit, and instead must use its revenues to serve the public interest. It is allowed to use those revenues for operational expenses.
What are Public Charities?
Most 501c3 nonprofits are considered public charities. The term “public charity” is generally understood to mean an organization that helps or serves the public in some way.
Most nonprofits want to be considered public charities because they not only get tax exempt status, but they also have more tax filing options and they have higher donor tax-deductible giving limits.
In order to qualify as a public charity, a nonprofit must:
- Be organized exclusively for 501(c)(3) purposes
- Have language in the articles of incorporation that limit the organization’s activities to things in the public interest
- Have a diversified board of directors
- More than 50% of the board must by unrelated by blood, marriage, or outside business co-ownership
- The board must not be compensated as employees of the organization
- Has broad public support and receive at least 33% of its revenues from small donors
- Small donors are individuals whose contribution is less than 2% of the organization’s income
What are Private Foundations?
Some private foundations are simply nonprofits that hoped to be considered public charities, but for one reason or another did not qualify. Funding for Private Foundations is primarily derived from a single source. And, although they can, they usually do not accept outside donations.
The major motive for starting a private foundation instead of a public charity is control. Private foundations can be controlled by related individuals, or even a single person. Additionally, foundations are able to have their primary function to be to fund and support public charities. While most charitable foundations primarily engage in issuing grants, they are able to also fund and operate their own charitable programs.
Foundations have limitations charities do not:
- Cannot do business with contributors
- Required to donate at least 5% of its annual income
- Investment income is taxed
- Deductible value of a donation is limited.
Should You Consider a Benefit Corporation Instead?
In addition to serving nonprofit clients, our law firm also helps setup and advises benefit corporations. A benefit corporation may be a better fit for some groups. It may offer more freedom to pursue creative solutions to difficult challenges in the community. Benefit corporations are a relatively new type of business structure that differs from both not-for-profit and traditional for-profit businesses in several ways.
Benefit corporations are private companies. They are not tax exempt 501c entities. They work to earn profits and pay taxes on those profits. However, where a traditional for-profit company seeks, and is often legally required to, maximize profits for shareholders, a benefit corporation is required to focus on its purpose or mission.
The directors of a benefit corporation work to ensure the long-term viability of the organization and also consider the impact of their decisions on society and the environment. They often have a specific purpose, similar to the purpose that at 501(c)(3) might have.
However, because benefit corporations are private companies that seek to be profitable, they can attract investors to help them grow and reach their goals. They can give employees stock options as a way to incentive the workforce and attract top talent who are also committed to the mission of the company.
A benefit corporation is a specific type of legal entity and requires a different process and different considerations than setting up either a nonprofit or a traditional for-profit business.
Why Work with Walsh Banks Law
Our attorneys have extensive experience organizing and advising nonprofit organizations of all sizes. Our team understands that before you are able to achieve your goals and serve the community, you need to have a solid legal foundation. As a full-service law firm, we have the knowledge and expertise to handle any legal issue that your nonprofit faces.
We make sure your organization is able to focus on, and accomplish, the work you are passionate about. Our team provides legal guidance and services on everything from high-level strategic decisions and structural issues to day-to-day legal issues such as contract review and employment law advice.
Your nonprofit business needs to operate efficiently and free from legal worries and entanglements if you are to do the most good. Our team helps you overcome and avoid legal issues. We can help you obtain and maintain your tax-exempt status. Our knowledgeable and experienced team of nonprofit lawyers is ready to help you every step of the way.