Family Wealth Transfer Planning and Trust and Estate AdministrationNot-For-Profit Organizationsemail
Not-For-Profit OrganizationsCorporate and Financeemail
While not-for-profit organizations are engineered to fund projects that are in the public interest, never before have they also been under such intense pressure. In a down economy, donation money dries up quickly. In addition, thanks to the fallout from mega scandals, such as the charities that lost everything as a result of Bernie Madoff's epic scam, government regulation is on the rise.
The Uniform Prudent Management of Institutional Funds Act has radically changed how donor-created endowments are managed. The Pension Protection Act of 2006 requires that charities, including supporting organizations, operate with even greater transparency about spending and stricter compliance with prevailing regulations. And now the IRS is taking extra time to review how much charities are paying insiders and contractors for their services as compared to the money directly going toward their missions.
Whether you are a hospital transitioning from not-for-profit to for-profit status, a community foundation negotiating third-party vendor agreements, a museum structuring a complex charitable gift or a private foundation engaged in program-related investments, Manatt’s full-service Not-for-Profit Organizations team can assist with various operational business issues that are made more complicated by your tax-exempt status.
Combining an in-house counsel’s deep experience in the workings of charitable organizations with a national practice’s full-spectrum legal experience in key areas, including real estate, litigation, employment and financing, Manatt’s attorneys act as skilled and sophisticated advisors to not-for-profit and tax-exempt organizations, including hospitals, museums, educational institutions, national associations, community foundations, and other public charities and private foundations. We advise clients on securing and maintaining their tax exemptions, including organizational structure, regulatory compliance, and corporate governance issues, including fiduciary duties and officer-director liability.
With offices in Washington, D.C., Albany and Sacramento, we are also well positioned to advocate effectively on regulatory, tax, political and other public policy issues important to the sector.
Manatt’s connections and experience enhance our ability to help not-for-profits grow their endowments and expand their reach. Our public-private partnership work and representation of top-tier financial institutions give an inside track to not-for-profits contemplating large-scale capital programs.
Our firm's business law, litigation and intellectual property capabilities inform the advice we provide not-for-profit clients on matters ranging from contracts to tax controversies to website security. Meanwhile, our subsidiary, ManattJones Global Strategies LLC, provides strategic consulting services to nonprofits operating internationally, or considering doing so.
Our not-for-profit attorneys have served, or currently serve, as executive directors and board chairs of charitable and tax-exempt organizations; in senior level positions in federal and state government, including the lead not-for profit regulatory officer in the Office of the Attorney General of California; and for numerous local government units, boards and committees. Additionally, Manatt’s longstanding community service emphasis has inspired our professionals throughout the firm to serve as volunteer officers and board members for:
We represent a wide range of public charities, private foundations and charitable trusts. We make sure that their organizational form and structure meet all federal and state requirements for tax-exempt status. Our attorneys handle status applications to the Internal Revenue Service, secure letters of determination, and respond to audits and inquiries involving Section 501(c)(3) charitable organizations, 501(c)(4) social welfare organizations, 501(c)(6) trade associations and similar entities. Because Manatt has extensive experience and long-standing working relationships with IRS personnel, we are effective advocates for securing and maintaining our clients' tax-free designation. We also form charitable lead trusts and charitable remainder trusts to effectuate split interest gifts to various charitable organizations, finalizing all the details of tax status qualification and advising on the appropriate deductibility of contributions.
Foundations and trusts are organizations with their own unique operational challenges, and our non-profit team guides them through the complexities of:
Manatt has one of the nation's preeminent lobbying and public policy practices, and our attorneys have used their extensive experience and connections in the federal executive and legislative branches to advance the interests of state and municipal governmental entities. We have secured millions of dollars in funding for a wide variety of local and regional concerns involving housing, transportation, water management and other issues. Our lawyers have handled litigation, secured regulatory relief through agency action or legislation, and offered general counsel services to a number of public sector entities and understand the needs and pressures confronting public organizations and elected officials.
Manatt lawyers regularly counsel tax-exempt healthcare systems, hospitals, and health plans, offering general advice to non-profit boards of directors, and representing them in litigation. We provide expert-witness services in the areas of fiduciary obligations of officers and directors of non-profit corporations, and give specific counsel on charitable trust law and officer, director and trustee liability. We are a leader in handling healthcare facility alliances and conversions from non-profit to for-profit status, particularly transactions involving the transfer of non-profit hospital assets (which are often subject to regulatory review). Our work with nonprofit hospitals and health systems also includes related issues like the tax treatment of divesting for-profit subsidiaries and divisions, and mergers or joint ventures with other nonprofit organizations. We prepare all regulatory filings and corporate governance documents, secure necessary government approvals, and advise on such special issues as the tax effect of these transactions on employee benefit plans.
Because Manatt has one of the world's top entertainment law practices, our attorneys actively work with a number of charitable organizations that are rooted in the entertainment industry. We use our extensive connections within all segments of the entertainment business to help these organizations create entertainment content and secure partners within the entertainment community to support their charitable activities. Charitable entertainment productions involve a host of specialized issues such as contracts, promotions and taxation, and our combination of entertainment industry and nonprofit experience enables us to give clients focused and highly effective services.
We represent a number of public broadcast stations and their affiliated educational institutions, trade associations and cooperatives. Our lawyers advise them on matters before the Federal Communications Commission and Congress, including spectrum auctions for non-commercial applicants and underwriting considerations. We also guide public broadcasters making the transition to digital television and can help evaluate commercial proposals for the use of digital television to distribute data or to provide Internet access.
Manatt clients range from large community foundations, to private family foundations of all sizes, to operating charities of all kinds, including schools, health care providers, educational institutions, research institutions, low income housing providers, museums and organizations working to improve conditions in the developing world.
Our attorneys routinely assist with a variety of matters unique to charitable organizations, as well as those faced by all businesses, including:
Manatt's advertising law practice is one of the best in the country. We help nonprofit organizations negotiate and document vendor marketing agreements, endorsements, sponsorship and joint marketing arrangements, affinity credit card contracts and similar strategies for advertising and promotion. We make special efforts to ensure that our clients comply with the latest provisions of federal and state laws regulating telemarketing and email solicitation of charitable donations. We review advertising, games of chance, contests and Internet promotions for compliance with Federal Trade Commission and all applicable state regulations and laws.
Manatt professionals are well versed in the issues surrounding the "zone of insolvency" and how they relate to and impact not-for-profit entities and their operations. We regularly advise and update nonprofits and their boards on the law relating to troubled assets, including those assets that the organization itself owns.
Our lawyers are experts in the specialized and often restrictive tax laws that apply to the funding of benefit and qualified and non-qualified retirement programs administered by local government units and non-profit organizations. We assist with the documentation and certification of 403(b) and similar tax-sheltered annuity plans for local governments, school districts and nonprofit employees, and pension plans for religious organizations. Our lawyers ensure that the matching contributions these plans provide and the annuity or mutual fund investments they require meet all legal standards as part of a complete compensation plan.
Manatt employment and labor professionals partner with our not-for-profit clients to bring value to their operations, often working with or acting as their in-house human resources and legal departments. We assist with all phases of the employment relationship and emphasize problem prevention by reviewing and establishing policies and procedures (including training and auditing programs) to ensure that highly visible tax-exempt organizations comply with the law on discrimination, harassment and other sensitive employment issues. We guide nonprofits through the growing controversy over wage and hour issues and exempt versus non-exempt employee classifications, handle all aspects of labor relations, and excel in representing nonprofit clients before courts, administrative agencies, arbitrators and mediators.
We know that many not-for-profits need to borrow capital on a tax-exempt basis to carry out their mission and business plan. Manatt has represented dozens of not-for-profit organizations that have financed billions of dollars of capital needs through tax-exempt financing. Our attorneys guide clients through this process using an in-depth understanding of the applicable tax laws and extensive familiarity with the governmental processes and capital market practices that apply to public financings. We also offer counsel on private financing, state and federal securities laws, joint ventures and other strategic relationships, and regulatory issues concerning access to capital.
Many not-for-profit organizations own trademarks, logos, Internet domain names, trade names and copyrighted materials. Manatt professionals help them register and protect these intellectual assets and leverage them by negotiating and structuring intellectual property transactions and licensing arrangements.
We also help nonprofits with a host of legal issues relating to the Internet and e-commerce. Our lawyers have successfully litigated many claims involving database infringement, computer trespass, inevitable disclosure, linking, framing, metatagging, spoofing and spamming. Manatt handles domain name and cybersquatting disputes domestically and internationally, and regularly brings and defends complex copyright, trademark, database, patent and antitrust suits in courts around the nation. Among the technology-related business issues that we handle for nonprofits are license agreements and contracts for Internet service providers, content and equipment providers, security firms and others, as well as preparation of employee and network security policies and contracts.
With a national reputation for litigation preeminence, Manatt attorneys have represented not-for-profit corporations and charitable trusts in all their dispute resolution needs. Our not-for-profit litigation team includes the firm's most senior litigators, including former government charitable trust prosecutors with decades of high-level experience in the field. We defend not-for-profit corporations and charitable trusts against challenges to their decision-making under state charitable trust law and federal and state tax law, and have successfully resolved disputes over investment decisions, the use of charitable assets (including restricted funds), the application of the cy pres doctrine and the modification of trusts. Often these matters involve the fiduciary responsibilities of officers, directors and trustees of charitable organizations, and we vigorously defend them in professional liability disputes.
Manatt litigators also assist clients with controversies shaped by the unique restrictions of tax-exempt status. For example, we provide antitrust and trade regulation counseling to guide the merger and acquisition activities of nonprofits such as health systems and trade associations. We also offer comprehensive assistance in disputes with the IRS and state tax agencies over tax-exempt status and other tax liability matters. Finally, we regularly represent our charitable clients in will contests and other disputes regarding charitable bequests.
Manatt is recognized as a premier firm in government relations and policy development, and we are skilled at dealing with all aspects of administrative and regulatory law and governmental actions affecting the non-profit sector. Our lawyers have represented not-for-profit clients in connection with legislative activities, governmental investigations, political campaigns, and public contract negotiations and disputes, among many other public law matters. Our team of former senior federal and state executive and legislative officials assists clients using their inside knowledge of administrative and regulatory processes at all public policy levels.
We also have substantial experience with campaign finance, conflict-of-interest and ethics issues that are special concerns for non-profit corporations and their directors. Our ability to integrate highly effective political and policy strategic advice with more traditional legal representation is well known, and we advance our clients interests in the public sector while making certain that they comply with all aspects of the law.
We typically form several not-for-profit corporations (and sometimes charitable trusts) on behalf of clients every month, guiding the process through its five primary stages:
Manatt regularly handles the special organizational issues of corporate transactions involving multiple not-for-profits, such as mergers and asset acquisitions, the sale of substantially all of a nonprofit's assets, and (when applicable) dissolution proceedings. Our lawyers also are extremely knowledgeable about the governance implications of the tax law as it relates to the compensation of nonprofit executives, and transacting business with for-profit entities. In addition, we regularly represent our clients in front of the IRS, the California Franchise Tax Board, and the California Attorney General. Finally, we use our broad corporate experience to help nonprofits apply to their operations the governance principles of the Sarbanes-Oxley Act and similar statutes aimed at for-profit organizations, as well as the governance requirements of the California Nonprofit Integrity Act.
We offer comprehensive advice to tax-exempt educational, housing, community center, and healthcare organizations with their often-complex real estate ownership, development and transactional issues. Our real estate attorneys handle all aspects of real estate purchase and sale agreements (including due diligence review of property conditions), public and private financing, leasing, syndication and other transactional arrangements. We are particularly adept at navigating political systems and advising clients about complex laws regulating government approvals, property development, eminent domain, and environmental concerns. In addition, Manatt tax professionals help our not-for-profit clients identify and obtain property, transfer, and other available tax exemptions in connection with the purchase, ownership and sale of real property.
Manatt has extensive experience representing charitable organizations as borrowers in tax-exempt bond transactions. As borrowers' counsel, Manatt performs the necessary due diligence to issue an opinion letter affirming the borrower's charitable status as of date of closing. Further, we negotiate the financial terms of the transaction with bond counsel, the bond issuer, the underwriter, and, if applicable, the credit enhancing bank.
We have represented charitable borrowers in the following representative tax exempt bond transactions:
Manatt is highly skilled at the federal income tax laws that govern the granting of tax-exempt status to 501(c)(3) organizations formed to carry out charitable mission (including educational), as well as 501(c)(4) social welfare organizations, 501(c)(6) trade associations and similar entities. We regularly counsel clients on the design and content of their Form 1023 applications for exemption, and it is rare that we do not have at least one application for tax exemption pending before the IRS national office due to the novel nature of the issues involved. Because Manatt has extensive experience and good working relationships with IRS personnel, we are powerful advocates for securing and maintaining our clients' tax-free designation.
Manatt attorneys effectively resolve tax issues that concern not-for-profit organizations, beginning with the creation of their entity structure and continuing throughout their organizational lifespan. We offer comprehensive tax and business counsel in every aspect of a nonprofit's activities:
Our nonprofit team works closely with Manatt's other professionals to provide services beyond those found at most other law firms. Areas of special focus involving taxation include tax and related aspects of legislative and political activities of not-for-profit entities, specific legislative projects, and the interface between tax law and not-for-profit corporation law.
Manatt has one of the largest and most experienced group of trust and estates attorneys of any major law firm in California. Representing both charitable organizations and high net worth donors, our trusts and estates attorneys understand the representation of exempt organizations from both sides of the philanthropy table. We regularly counsel our individual clients with regard to their philanthropic goals, assisting them with establishing irrevocable charitable trusts, supporting organizations, donor advised funds and private foundations. In addition, our attorneys routinely work with charitable organizations to help structure complicated charitable gifts in a way that benefits both the donor and the organization.
We regularly work with charitable organizations in their role as beneficiaries of probate and trust administrations. We routinely advise our charitable clients on the management of problem bequests and we regularly represent their interests in will contests. In such matters, we are cognizant of the need for our clients to balance sensitivity to family and public relations issues while acting in a manner consistent with their fiduciary duty to defend charitable assets.
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