Nonprofits and Tax Exempt Organizations

Nonprofits and tax-exempt organizations are vital contributors to our nation and communities. And from a legal standpoint, they provide some unique challenges. Too often, we see people trying to navigate the legal complexities of these organizations on their own. Without appropriate legal support, the people involved, even with the best intentions, can often face serious legal consequences.

Our Experience

We have experience advising clients on all elements of a nonprofit lifecycle, from formation, to obtaining tax exemption, to fundraising and state compliance issues. This includes many types of entities from public charities and private foundations in the 501(c)(3) world, to 501(c)(4) social welfare organizations, to 501(c)(6) trade associations and chambers of commerce.

The Need

Navigating the nonprofit and tax‑exempt space requires a specific blend of corporate law and tax law knowledge. Specifically, you need legal knowledge, attention to regulatory detail, and a deep understanding of how these organizations operate in practice. Nonprofits are governed by strict rules regarding purpose, governance, financial oversight, and the use of funds. This paradigm differs dramatically from traditional for-profit businesses. Even well‑meaning missteps can put an organization’s tax‑exempt status at risk or lead to penalties for directors, officers, or stakeholders. Our goal is to help clients understand these requirements clearly so they can focus on fulfilling their mission while staying fully compliant.

Formation

Formation is often the first major step where organizations need guidance. Nonprofits must be structured correctly from the beginning, with governing documents reflecting their purpose, outlining key responsibilities, and meeting state and IRS requirements. We help clients develop all necessary corporate documents. These include bylaws, conflict‑of‑interest policies, foundational governance structures, and organizational resolutions. These documents provide a solid foundation for the nonprofit to more forward. Once the entity is formed, we prepare and submit the appropriate IRS application for tax‑exempt recognition, ensuring that the organization’s activities, structure, and documentation align with federal standards.

Compliance

After achieving tax‑exempt status, compliance becomes an ongoing responsibility. Annual filings, required disclosures, charitable solicitation registrations, and state compliance rules are real. And they can easily become overwhelming without proper support. We assist with understanding and maintaining these obligations. We support nonprofit leaders – helping them avoid inadvertent violations and keeping their organizations in good standing. Whether your organization operates solely in one of our states (Idaho, Ohio, or Utah) or fundraises in multiple states, we can help.

Fundraising and donor‑related issues are also critical components of nonprofit operations. Documenting gifts, donor restrictions, and grant agreements properly is paramount. Issuing appropriate acknowledgement letters is essential for both accountability and legal compliance. We advise clients on how to structure fundraising activities, manage restricted funds, and engage in revenue‑generating activities without jeopardizing their exempt status. We help interpret requirements and implement policies to ensure compliance for organizations receiving grant funding.

Governance

Nonprofits also encounter governance issues that require thoughtful legal input. Board composition, term limits, officer roles, voting procedures, conflicts of interest, and financial oversight obligations all play a role in a nonprofit’s health and stability. We help boards understand their fiduciary duties and develop appropriate governance procedures. These procedures promote transparency and mitigate risk. As organizations grow and evolve, updating governing documents and internal policies becomes equally important.

Transitions

We also assist nonprofits through periods of change and transition. Whether that involves leadership transitions, programmatic expansion, or mergers between nonprofit entities, or we can help. Each stage carries its own legal responsibilities and potential pitfalls. We provide the guidance needed to navigate these transitions smoothly and compliantly.

Ultimately, nonprofit leaders and volunteers need and deserve clear, practical legal guidance that empowers them to pursue their mission without unnecessary confusion or risk. Our role is to provide just that. We support these organizations through every stage of their lifecycle so they can continue serving their communities with confidence, integrity, and strong legal footing.