Nonprofit Legal Services for Charities and Other Tax-Exempt Nonprofit Organizations

Our attorneys have extensive experience advising clients on the unique legal issues facing charities and other tax-exempt nonprofits. Bromberger Law represents a wide range of nonprofits, including public charities focusing on the arts, education, advocacy, and public policy, climate change and the environment, housing and employment, racial and economic justice, and international human rights, as well as fiscal sponsors and donor-advised funds. We also represent private family and corporate foundations, social welfare organizations, trade associations, business leagues, and other tax-exempt organizations.

 

We offer comprehensive nonprofit legal services to our clients covering all aspects of their management and operations. Due to our broad experience advising for-profit and hybrid social enterprises, we are uniquely positioned to represent public charities that engage in commercial activities or strategic partnerships with for-profit businesses, and advise private foundations regarding program and mission-related investing. 

 

In everything we do for our nonprofit clients, we bring an innovative perspective and understanding of the nonprofit world’s fast-changing laws and best practices. Our nonprofit and tax-exempt services include the following:

 

Nonprofit Formation and State and Federal Tax-Exemptions 

 

Bromberger Law offers comprehensive start-up services for nonprofit organizations, including: 

  • Consulting with the organization’s founders and initial directors on the organization’s mission, tax-exempt purposes, activities, and planned operations. 

  • Providing advice regarding key governance issues, including fiduciary duties of directors and officers, conflicts of interest, board structure and committees, and indemnification rights.

  • Preparing and filing state incorporation documents for nonprofit formation.

  • Drafting initial bylaws, resolutions, and governance policies as required to comply with applicable laws and best practices.

  • Completing and filing an application with the IRS for recognition of the organization’s federal tax-exemption. 

  • Drafting responses to any follow-up questions from the IRS and providing application tracking and support until the organization receives a determination letter from the IRS recognizing its federal tax exemption.

  • Qualifying the organization to do business in its state of operation (if different from the state of incorporation).

  • Applying for state tax exemptions, such as exemption from state sales and use tax and property tax. 

  • Registering the organization to solicit charitable contributions in one or more states (if applicable).

 

Outside Nonprofit General Counsel Services

 

Bromberger Law routinely represents clients as their nonprofit general counsel, serving as their primary legal advisor and nonprofit legal services provider. We offer a wide range of services and support as outside general counsel, including participating in board meetings, strategic planning sessions, and management discussions so we can spot and address potential legal issues before they arise. We also provide comprehensive business services on such matters as governance, compliance, employment, intellectual property, contracts, commercial transactions, joint ventures, and strategic partnerships. 

 

Governance and Compliance Services

 

Bromberger Law advises tax-exempt organizations on a wide range of governance and compliance matters. 

 

We counsel charities and nonprofits on governance requirements and best practices, including bylaws and governance policies. We advise our clients on matters relating to fiduciary duties of officers and directors, strategies for addressing conflicts of interest and related-party transactions, board decision-making processes, documentation of board decisions, and strategies for mitigating potential legal and reputational risks. 

 

Compliance with the many state and federal laws and regulations that apply to charities and other tax-exempt organizations presents unique challenges. We represent clients in a number of compliance matters, including:

 

  • State charitable solicitation laws

  • Executive compensation

  • Excess benefit transactions

  • Private inurement

  • Lobbying and political campaign activities

  • Commercial activities and unrelated business income tax issues

 

Private Foundation Services

 

Private foundations are more heavily regulated than public charities and other tax-exempt organizations. Bromberger Law has experience working with both corporate and family foundations. We help our clients meet their compliance obligations while also furthering their social missions. Our services for private foundations include:

  • Advising private foundations on grant-making activities, policies, and procedures, including expenditure responsibility grants, recoverable grants, disaster relief payments, matching gifts, and scholarship programs. 

  • Drafting and negotiating grant agreements and advising on grantee reporting requirements.

  • Advising private foundations on the legal issues related to program and mission-related investing. 

  • Counseling U.S. foundations on international grantmaking policies and best practices and OFAC compliance.

  • Advising on matters arising under the private foundation excise tax rules, including self-dealing transactions, minimum distribution requirements, excess business holdings, jeopardizing investments, and taxable expenditures.

 

Nonprofit Mergers, Dissolutions, and Asset Sales

 

Nonprofits enter into significant corporate transactions, such as mergers, dissolutions, and substantial asset sales for many different reasons. Two organizations with similar missions may choose to merge to consolidate resources and strengthen their programs. In contrast, another organization that has fulfilled its mission or is no longer able to raise sufficient funds may choose to dissolve. Organizations may sell all or substantially all of their assets in connection with a pending nonprofit merger or dissolution, or following a board decision to streamline operations, cut existing programs, or for many other reasons.

 

Each of these transactions may involve a long and sometimes difficult and emotional process for the organization—they bring a number of unique practical, legal, and compliance issues. At Bromberger Law, we work closely with our clients through every step of a significant corporate transaction to ensure that the client’s objectives are met. Depending on the transaction, our work may involve negotiating the terms of the nonprofit merger or asset sale with the opposing party, conducting due diligence, preparing agreements and other documents, advising the board throughout the review and approval process, obtaining necessary regulatory approvals, and filing the documents needed to close the transaction.

 

Nonprofit News and Resources:

  • "Starting and Growing a Nonprofit" - Bromberger Law Founding Partner's Interview on "Law You Should Know"
    From what can listeners do to get their nonprofit off the ground to how a lawyer supports nonprofits who are starting their organizations, and what 1023s are, and more, tune in to hear!

  • The New York Pooled PRI Fund: An Opt-In Approach to Program Related Investment
    SeaChange Capital Partners established The New York Pooled PRI Fund (“NYPRI”) to connect NYC foundations interested in making program-related investments with nonprofits that need access to flexible, impact-first loans. 

  • Recoverable Grants as a Tool for Impact
    In an era when philanthropy is changing rapidly, foundations consider the recoverable grant. It acts in many ways as a loan but is treated as a grant for tax purposes. This is helpful since the grant will count towards the foundation’s 5% minimum payout for the year. It also allows foundations to make much riskier “investments” than they could otherwise. 

  • Funders Must Take Swift and Unprecedented Actions to Support the Nonprofit Sector
    There is no doubt that philanthropic funders are stepping up in new and unprecedented ways to address the Covid crisis, which may involve making dramatic shifts in their grant-making priorities, policies, and procedures. If all of this seems overwhelming, here are some immediate and concrete steps that your organization can take.

  • DAFs in a Time of Crisis
    As decisions can be made quickly, it is almost as if DAFs were designed for rapid-response philanthropy. Creating a DAF is easy, and is done with a fairly standard agreement. The charity agrees to hold the money and consult with the donor on its use. The donor simply specifies how much is going into the fund, the purpose of the fund, and who has the advisory privileges, and… voila! 

  • Let’s Help Charities Grow in the New Economy—Make DAF’s Easier to Create and Manage
    Working charities, no less—the ones that are struggling to do more with less. Are the regulations that govern their activities not complex enough already? If we really want to help charities grow in the new economy, let’s make DAF’s easier to create and manage, not harder.

  • Dissolving a Nonprofit Organization
    Gain insight into common issues that may arise during dissolution and how to guide an organization through the dissolution process from start to finish. Dissolving an organization can be a difficult and emotional process, but there are steps that can be taken to ensure that the process of winding down a nonprofit is as smooth as possible.

  • Newman's Own Gets a New Life
    The Philanthropic Enterprise Act was signed into law, allowing private foundations to own 100% of a business under certain conditions. The bill was championed by Newman’s Own Foundation, allowing the foundation to maintain 100% ownership of No Limit, assuring that all profits of the company will continue to go to charity.

  • IRS Declares War on Commercial Charities
    IRS released the latest in a series of tax-exemption denials based on the presence of too much commercial activity by a charity applying for 501(c)(3) status. Unlike other rulings regarding “commercial charities,” which have generally denied or revoked exemption where private benefit is found, this denial is based on the mere presence of a substantial commercial purpose.

  • When is a Fiscal Sponsorship a “Mere Conduit”?
    Most nonprofits are familiar with the fiscal sponsorship—a charity receives funds from a donor on behalf of a non-exempt entity and then makes those funds available to meet the legitimate expenses of a specified charitable project. But what if the fiscal sponsor is really just a pass-through? Will the contributions still be tax-deductible?