Not-For-Profit Law
The legal landscape for non-profit organizations can be complex and, at times, overwhelming. Non-profits often do not have the benefit of in-house counsel and can fall behind on developing and maintaining a legal foundation that protects corporate and public interests.
Often, new and existing non-profits will start their journey by becoming tax-exempt under Internal Revenue Code Section 501(c)(3) and filing for state tax exemption. Generally, this process goes smoothly but can be a year or longer in process before all applicable tax-exempt status is obtained. It is therefore the best option in most circumstances to begin the incorporation process with an attorney who has experience in non-profit law in order to get the process started out on the right foot.
After a non-profit is established and initial tax-exempt status is obtained, either through federal or state , the legal issues begin to shift into other areas including establishing and maintaining good governance and compliance practices, entering into contracts and agreements, and hiring employees. These four areas contain major and smaller legal issues that non-profit organizations need to address, some on an annual basis, including but not limited to the following:
Board composition and by-laws,
Conflicts of interest,
Related party issues,
Other policies,
990s (federal and state),
Financial reporting,
Fundraising laws,
Employment issues, and
Grants and contracts.
When taking a pro-active and preventative approach to legal matters, an organization can easily and effectively address some of these issues with cost of compliance in mind and will be protecting the organization from a negative event down the line.
Sources of Free Legal Guidance
Legal aid clinics are a great place to start and may be able to give a non-profit a good lead on whether it can get free legal assistance from volunteer lawyers. Some clinics even have a pro bono program, where volunteer lawyers come into the clinic to provide short legal advice. Such services are limited to people who qualify under the clinic’s income guidelines. Since there are many ways that legal aid clinics can assist non-profits, check out the Actionable Clinic Map from Legal Services Corporation (LC) to learn about the services in your area.
Legal Aid Society of Metropolitan Atlanta has an easy-to-read pamphlet on its website that explains how it provides free or low-cost legal assistance to non-profit organizations. Southern Arizona Legal Aid Services has a similar publication on how it provides legal assistance to established non-profit organizations.
Many large law firms include pro bono work as part of their professional responsibilities. To find out whether a particular firm offers pro bono help for non-profits, call its main number and ask to speak with someone in its pro bono department. If the firm has no such department, the receptionist will likely be able to connect you with someone who can help you.
For example, Wiley Rein LLP offers pro bono legal assistance for eligible charitable organizations. Pro bono attorneys meet with charities in quarterly legal advice clinics; walk-in clinics are held monthly. Pro bono legal services are also available by appointment on a needs basis.
Other sources of pro bono help for non-profits can be found in the LSC’s Pro Bono Coordination System Directory. Scroll down to the Local and State Bar Associations section to find contact information for state and local Bar Association pro bono assistance. When looking for pro bono lawyers, you should be mindful of the American Bar Association’s guidelines for selecting counsel.
Pro bono services for non-profits might also be available from the United Way of Metropolitan Atlanta’s Pro Bono Resource Center. The Pro Bono Resource Center offers resources to help community-based nonprofits build their capacity to best serve the needs of the community.
If you are unable to find pro bono help locally for your non-profit organization from a legal aid clinic, law firm, or United Way, you can try the Neighborhood Legal Services Program. It runs the most expansive pro bono program in the nation and is integrated with more than 23 legal aid programs that have collectively marshaled millions of dollars in pro bono resources to strengthen the safety net for low-income communities across the country. Its goal is to help relieve the pain and consequences of poverty by enhancing legal services to individuals in need through the delivery of pro bono services.
Pro Bono Legal Help
Pro bono (free of charge) legal services for non-profit organizations are often available for groups that meet specific requirements. Most of these attorneys volunteer through nonprofit organizations and local bars to provide legal assistance tailored to the needs of non-profits. For example, in 1969, the New York State Bar Association created Volunteers Legal Services Pro Bono Inc. to develop and deliver quality free legal services to low-income individuals and small businesses while creating rewarding volunteer opportunities for law students and attorneys. Since then, other organizations have also developed to serve this need such as: Public Counsel, the Pro Bono Project, Lawyers Alliance for New York and Aspiranet, just to name a few.
Many bar associations also have pro bono programs, which can involve the simple referral of a not-for-profit’s representative to a local lawyer, to one-on-one legal representation to complete a legal task.
Additionally, the National Legal Aid and Defenders Association also maintains a list of legal aid and pro bono organizations in each state and U.S. territory, so it is worth searching for additional resources that may be available in your state. These may include the R.I. Bar Pro Bono Referral Program in Rhode Island, the Pro Bono Program of the Philadelphia Bar Association in Pennsylvania, Pro Bono Partnership in Westchester County, NY (serving the New York City metro area) and the Houston Bar Association’s LegalLine for Hurricane Harvey Victims.
Legal Education Resources for Not-For-Profit Organizations
Online legal education addresses a critical need for non-profit organizations. The laws governing non-profits are in constant flux and it is imperative that non-profit directors and managers remain in the know when it comes to their organization’s legal obligations and rights. Some of the better ways to accomplish this task are through webinars, tutorials, and other e-learning tools offered by countless sources.
An excellent starting point for these options, and a personal favorite of mine, is the Foundation Group printable article "Where to Learn Online". It lists available options, not only for non-profit scalability and structure, but also for general legal education, state law, and regulatory and taxation issues. Another great option for non-profits is the National Council of Nonprofits, which offers an entire page of resources on topics such as public policy, state laws, and taxes. There is also the GuideStar Learning Center, a wealth of information geared towards board members, senior management, and other staff.
Legal Templates and Other Tools
Employing Legal Templates and Tools: In addition to these more traditional resources, a wealth of free templates and legal tools is now available online. While there are some significant caveats to this, many non-profits can take advantage of these free resources.
For one, the non-profit can get forms and templates for a number of policy and other compliance documents the organization may need. Many of these tools are specific to certain types of non-profits and compliant-ready, requiring not but a few quick edits to make the document your own. For example, a non-profit nonprofit can find forms and guidelines for:
While there are a number of additional non-profit-related forms and guidelines, the creation of these basic templates has been so automated that they represent just minor tweaks away from documents unique to your organization. Thus, in a matter of minutes and with little legal overhead, the non-profit can walk away with a document that is unique to your organization , yet legally sound.
In addition, the non-profit can find a variety of legal tools to help it better navigate and comply with state and federal laws. Indeed, add-on tool bars have become ubiquitous on the Internet, and offer a host of handy features specific to non-profits, including:
However, advisors urge non-profits to be cautious in relying on these resources. For one, these tools are not a substitute for counsel. Indeed, many require a paid subscription to unlock premium features.
Secondly, the value of a particular tool or template can vary significantly from site to site. Thus, while consultants recommend the aforementioned Glass Door and GuideStar, there are likely better alternatives to certain popular advocacy and compliance websites.
Finally, there is always a risk in utilizing these online tools. Thus, even though these tools might provide a short-term solution an organization might want to periodically check with its attorney if it has not previously done so.
Networking as a Source of Legal Guidance
Many individuals who serve as board members, staff, and volunteers for a non-profit organization have lawyers they regularly refer to their own clients. Non-profit organizations should get familiar with the lawyers to whom they refer. They can often help non-profits through either free or reduced-fee legal services.
In many communities, and for many legal specialties, there are associations and bar associations. While some of these associations host networking events that are reserved to members only, others have regular events that are open to the public or charge a minimal cover fee to attend. Non-profit organizations may wish to join these associations in order to become acquainted with the lawyers in their community who could help them with their legal work.
Some bar associations sponsor regular networking breakfasts or lunches. Others host a monthly cocktail night. Discovery Bay Bar Association, for example, hosts a social every month that is open to the public. Regardless of whether the event is for networking purposes or for another purpose, non-profit organizations should bring to the event’s attention both their need for volunteer legal services and the success of their organization as a result of any volunteer legal services their organization has received. Many lawyers will be pleased to hear about the work of non-profit organizations in their community and the positive impact they have had.
Other legal professionals are active not only in associations, but also in conferences and community events. To the extent that conferences are open to the public and lawyers active in non-profit law attend them, these can be good opportunities for non-profit organizations to network with these legal professionals.
Many legal professionals also practice in communities other than the one where their legal office resides. Non-profits should familiarize themselves with any legal professionals who are involved with outlying communities.
Lastly, it may also pay to send out feelers to local lawyers to get their thoughts on the non-profit organization. Many free legal services organizations keep a list of lawyers who have inquired about a non-profit organization’s work without any formal arrangement to serve as its lawyers. Lawyers who have informally indicated an interest in working with a particular non-profit organization are good prospects for providing services to that organization.
Legal Advice Forums and Q & A Boards
The digital age has provided non-profit organizations in need of legal advice with the opportunity to connect directly with lawyers. As a form of online community, legal forums and question-and-answer (Q&A) platforms bridge the gap between the (slow) lawyer-client process by allowing those with legal questions to post them, either anonymously or publicly, to seek assistance from a pool of online legal experts. For non-profit organizations, using an online legal resource is a great way to get quick responses from several lawyers (some lawyers are known to give legal advice on multiple forums, giving the person asking the question several options). Online legal forums and Q&A platforms typically allow any type of legal inquiry to be made, for free as well.
There are quite a few popular and reputable platforms for legal Q&A purposes:
Reddit – The popular social media platform has several legal forums that focus on a specific area of law. While it is not advisable to use this platform for any sensitive inquiry , it is a great place to get a few responses from lawyers on a single legal issue.
JustAnswer – This question-answer forum provides a lawyer with your legal question in as little as 30 minutes. While JustAnswer is free initially for the first answer provided, you will need to pay a monthly fee if you wish to submit follow-up questions, or are require further assistance.
Nolo – In addition to being a well-known blog about the law, Nolo has a lawyer-directory where individuals can search for lawyers in their area, by practice area. While there is no option at this time to ask a question online, you can contact a Nolo lawyer via telephone or web chat, or search their other legal directories based on your area.
LawGuru – LawGuru allows you to ask an attorney your legal question online, for free, or receive a guaranteed answer through their premium service. They also have a lawyer-directory similar to Nolo, in addition to several online legal resources.