We are presenting two Continuing Legal Education (CLE) programs for Lawline on Friday, January 13, 2016 that we hope California attorneys will find helpful in their representation of nonprofits:
Forming a California Nonprofit (Erin)
This program will discuss the process of forming a California nonprofit entity, going through the legal considerations involved in each step in detail. We will start with a discussion of some of the appropriate things to consider before beginning the formation process and then turn to the mechanics of formation, including drafting Articles of Incorporation, Bylaws, and a Conflict of Interest Policy. We will also cover other legal considerations that apply to California nonprofits, including registration requirements at the state level.
Most nonprofits are required to separately seek recognition of tax-exemption at the state and federal levels, so we will take a close look at the requirements for exemption and the application process, focusing primarily on 501(c)(3) organizations. Finally, we’ll briefly touch on some alternatives to forming a California nonprofit that may be attractive in certain circumstances.
Throughout the session, Erin Bradrick, Senior Counsel at NEO Law Group, will illustrate concepts through examples and will provide information on how to access additional resources.
Earned Income Issues and Guidance for California Nonprofits (Gene)
Many people are surprised to learn that over 70% of the revenues from reporting public charities comes from the sale of goods and services. And charities are increasingly engaging in earned income (and social enterprise) ventures as they face the simultaneous challenges of uncertainty in public fundraising and the tax benefits associated with charitable giving, undependable philanthropic funding, and increased competition for limited resources. But earned income is an area wrought with misconceptions and misunderstandings.
The rules governing unrelated business taxable income (UBTI) are complex. As a result, many non-profits simply fail to properly report and pay taxes on their UBTI or preclude themselves from starting an earned income venture. As the differences in the activities of non-profit and for-profit organizations continue to blur with the increasing commercialization of charities and the growth of socially-purposed taxable entities (like the benefit corporation), the associated tax issues will only get more complicated. Subsidiaries, joint ventures, and commercial co-ventures may be useful options for some non-profits if entered into with sufficient knowledge and consideration.
This audio-only course, taught by Gene Takagi, the managing attorney of NEO Law Group, a firm specializing in non-profit law, reviews the legal issues that should be considered when reviewing a non-profit’s earned income venture and offers practical guidance on best practices for both in-house and outside counsel.