Corporate & Tax

Nonprofit & Tax Exempt Organizations

In their breadth and reach, nonprofit organizations often provide a community with its healthcare, education, social service and cultural backbone. Beyond this vital service component, nonprofits must thrive economically while complying with regulations that may pertain exclusively to them. Through our Nonprofit and Tax-Exempt Organizations Group, Cohen & Grigsby offers a comprehensive suite of sophisticated legal services to help clients achieve all these objectives.

360° Nonprofit and Tax-Exempt Organizations (PDF)
We are pleased to represent healthcare organizations, colleges and universities, research institutions, public broadcasting companies, religious organizations, community groups and social service agencies, cultural and performing arts organizations, trade associations, supporting organizations, grant-making organizations and private and family foundations.

This multidisciplinary group goes well beyond traditional legal services in assisting nonprofits, helping them extend their impact in the community. Our attorneys frequently serve as general counsel, board members and executive officers for our nonprofit clients, assuring that they have the counsel and stewardship they need – today and for the long term.

Services for Every Area of Endeavor

As service providers that also operate as businesses, nonprofit entities must be active and adroit across a wide front. Our attorneys provide key assistance in every area of endeavor. Our services include:

Formation and Ongoing Tax Compliance Matters

Our Nonprofit and Tax-Exempt Organizations Group assists clients with the formation and structuring of new nonprofit organizations, from drafting organizational documents to identifying advantageous strategies for choice of entity, board and officer constituencies, and scope of mission.

In the area of taxes, we help secure and protect appropriate federal tax exemptions for a vast array of classifications, obtain formal rulings or informal guidance from the Internal Revenue Service regarding exempt status, seek state sales and use tax exemptions, and provide counsel on other tax exemption issues such as the filing of necessary returns and reports, appropriately accounting for unrelated business income, and avoiding intermediate sanctions. Our attorneys also assist in careful planning to prevent private inurement and self-dealing violations, and to minimize unrelated business income through proper use of for-profit subsidiaries.

Corporate Governance

Carefully considered corporate governance practices are of paramount importance to our nonprofit clients, and our attorneys regularly counsel boards, executive officers and committees with respect to director fiduciary duties including the duty of loyalty, the duty of care and the business judgment rule. Our attorneys have served as independent counsel to special committees in connection with related party transactions and potential conflicts of interest, and supported committees in fulfilling their fiduciary obligations. We have assisted clients in defending various fiduciary-related claims and navigated issues relating to D&O insurance coverage and indemnification coverage and claims. We routinely give advice on governance best practices, including the development of conflicts of interest and document retention policies, and we oversee self-audits of charter compliance and effectiveness.

Mergers, Joint Ventures, and Affiliations

Our attorneys have extensive experience guiding nonprofits through some of the most complex stages of their existence, including mergers, affiliations, consolidations, corporate divisions, reorganizations, joint ventures involving nonprofit or for-profit partners and conversions from nonprofit status to for-profit status. We work closely with the Attorney General’s office to obtain the necessary approvals on all transactions and asset dispositions to ensure smooth and predictable transitions.

Labor and Employment

Labor and employment matters can be pivotal for nonprofits; many rely on our attorneys for advice and representation across the spectrum of such issues. These include the development of executive compensation arrangements, union representation campaigns, unfair labor practice charges, collective bargaining agreements, arbitration proceedings, discrimination cases, sexual harassment training, wage and hour claims and wrongful discharge matters. Our lawyers regularly assist in training, as well as counseling and litigation related to these topics.

Executive Compensation and Employee Benefits

Our Nonprofit and Tax-Exempt Organizations Group is seasoned in structuring executive compensation arrangements to avoid negative tax consequences. We frequently assist boards and committees in establishing reasonable compensation levels for directors, officers, and employees in accordance with the safe harbor provisions prescribed by the IRS.

The Group also works closely with our Employee Benefits & Executive Compensation Group to provide skilled advice and services in the key areas of ERISA and employee benefits compliance, Qualified Plan compliance, Nonqualified Plan compliance (Internal Revenue Code Sec. 409A and 457), fiduciary standards of care, investment policy statements, planning services, distribution of plan assets, health and welfare plan compliance (including the Patient Protection and Affordable Care Act), and ERISA litigation.

Our work with the Patient Protection and Affordable Care Act includes advice relating to accurately counting employees to determine whether an employer is an applicable large employer subject to the “play or pay penalties,” classifying employees as full time for purposes of the Affordable Care Act; reviewing independent contractor and leased employee status; correctly applying the measurement, stability and administrative periods to current, new and variable hour employees; addressing seasonal or temporary employee issues; applying the affordability and minimum value standards to employer plans; and assessing “play or pay” strategies and options.

Our team has extensive experience counseling and advising clients and their fiduciaries on benefits law, and the FMLA in particular, including the difficult intersection between the FMLA, the ADA and workers’ compensation laws.

Administrative and Regulatory Matters

We regularly assist clients in dealing with the applicable regulatory framework, including such matters as licensure and credentialing, government-sponsored funding programs and fundraising activities. We also represent our nonprofit clients before the Office of the State Attorney General exercising its authority as parens patriae for charitable organizations. This specialty is instrumental in assisting with transactions in which an understanding of when Attorney General or other regulatory approval may be required.

Real Estate

We counsel our nonprofit clients with respect to the purchase, sale, lease and management of real property. In addition, we have represented clients in challenges to their real estate tax exemptions.

Finance

Access to capital often is a pressing need for nonprofit organizations. Whether through tax-exempt bond financings, loans with financial institutions or the offering of securities, we structure the vehicles that help clients gain access to capital markets. Our tax lawyers also have significant experience in providing tax advice with respect to all aspects of corporate financings.

Fundraising and Charitable Solicitation

Our attorneys have substantial experience in advising nonprofit clients in all aspects of their fundraising activities, including the proper structuring of charitable gifts and bequests to benefit both contributor and recipient. Through Orphans’ Court proceedings, we protect our clients’ interest in trust and estates. We also advise clients on conducting appropriate fundraising activities and maintaining appropriate relationships with professional fundraisers.

Risk Management and Litigation

We frequently counsel nonprofits on liability and risk management issues. Our litigators have substantial experience in the representation of nonprofit entities in the courts and before regulatory agencies. Our team represents clients in traditional commercial and business disputes, as well as business breakups, governance, unfair competition, non-compete agreements, intellectual property, securities and shareholders matters and a variety of other complex matters.

Governmental Affairs

Nonprofits have considerable business before state and local government; we are pleased to represent them in such matters. Our expertise includes assistance in securing reimbursement for services provided in conjunction with government programs, obtaining government grants and other financial assistance, and advocacy of our clients’ interests before government agencies. We also advise exempt organizations on compliance with IRS restrictions on lobbying and political activities.

Intellectual Property

We offer extensive services intended to help our nonprofit clients protect and preserve their intellectual property rights. Such services include handling trademark, copyright, and patent issues; developing agreements and transactions, and litigating intellectual property disputes. We counsel clients on establishing, protecting, transferring and enforcing patents, trademarks, trade names, trade dress, copyrights, service marks, trade secrets and other areas of intellectual property rights in both the United States and internationally.

 

We strive to offer practical, results-driven advice on governance, tax and other legal issues. Our mission is to manage these issues proactively, efficiently and effectively so that our nonprofit clients are able to stay focused on what they do best.