Nonprofit and Social Impact

Our Practice
Nutter’s Nonprofit and Social Impact practice group provides a wide range of services to both nonprofit organizations and individuals and businesses who contribute to such organizations. We counsel educational, health care, and cultural institutions, as well as donor-advised funds, corporate and family foundations, and generations of philanthropic families. Our reach expands beyond charitable organizations to include trade associations, chambers of commerce, social welfare organizations, social clubs, and for-profit enterprises intent on developing or enhancing their philanthropic strategies.

We advise board members, senior leaders, and philanthropists on a wide variety of governance, strategic planning, operational, gift planning, and risk management issues. By its very nature, this representation draws on experience from several of our departments and practice groups, including corporate, private client, real estate, tax, intellectual property, labor and employment, and litigation. In addition to providing legal advice and expertise in governance and strategic planning, we offer investment advisory, trust accounting and tax preparation services to our clients. With the assistance of Nutter Investment Advisors, which has over $1 billion in funds under management, we can tailor an investment strategy that meets the client’s philanthropic goals.

Services Public Charities and Other Nonprofit Organizations
The Nonprofit and Social Impact practice group provides a wide range of services to all types of public charities, from those that have a national reach to others with a purely local focus. We provide specialized counsel to donor advised funds, educational institutions, health care organizations, museums, organizations promoting the arts, and community groups. We also represent trade associations, chambers of commerce, social welfare organizations, social clubs and other nonprofit organizations, by offering the following services:

Initial steps

• Establish entities with optimal legal structure for the client’s objectives
• Advise regarding governance, board composition, and conflicts of interest issues
• Obtain tax-exempt status from IRS and approvals from state revenue authorities and the Attorney General
• Assess availability of local property tax exemptions, and/or negotiate PILOT agreements
• Advise regarding budgetary issues, board composition, and conflicts of interest safeguards

Operations and tax compliance

• Analyze transactions to minimize intermediate sanctions exposure
• Review activities to minimize sources of unrelated business income
• Advise regarding applicable restrictions on lobbying and political activity
• Monitor tax, accounting, and government filing requirements
• Institute safeguards to protect intellectual property rights
• Review management contracts, leases, fiscal sponsorship arrangements, service provider agreements, and licensing or royalty agreements
• Represent organizations before the IRS, state revenue authorities, and the Attorney General
• Prepare industry-specific guidelines, including non-discrimination policies for educational organizations and charity care and community benefit programs for health care-related organizations
• Review foreign grantmaking activities for compliance with applicable law
• Assist with employment issues, including employee and consultant contracts, compensation determinations, benefit plans, and reporting requirements
• Review website content to ensure proper practices are maintained

Implementing complex structures and strategies

• Create multi-tiered entities to address governance and business goals
• Structure joint ventures with for-profit entities
• Negotiate and execute mergers, consolidations and reorganizations and asset transfers with nonprofit and for-profit entities
• Create subsidiary organizations to minimize potential liabilities from lobbying and unrelated business activities
• Represent exempt borrowers in taxable and tax-exempt financings

Winding down

• Counsel on appropriate disposition of assets
• Prepare court petitions and other required documents for liquidation and dissolution

Services to Private Foundations
Within the universe of tax-exempt organizations, private foundations have their own set of complex regulatory rules. The Nonprofit and Social Impact practice group draws upon the extensive experience of attorneys in several fields of law to advise private foundations, and those who establish such organizations, on navigating these rules. In addition to the services to public charities and other nonprofit organizations described above, we offer the following services which are of particular relevance to private foundations:

Initial steps

• Review client’s charitable goals as part of overall estate plan to determine the most appropriate entity – grantmaking foundation, private operating foundation, supporting organization, donor advised fund or other lifetime or testamentary charitable vehicle – to achieve those goals
• Devise organizational structure to achieve desired level of donor recognition or anonymity

Operations and tax compliance

• Provide administrative services, including custody of funds, recordkeeping, and tax preparation
• Provide investment advice and management services with respect to foundation assets
• Counsel on applicable restrictions on self-dealing, excess business holdings, jeopardizing investments, unrelated business income, and other rules governing private foundations

Grantmaking and impact investing

• Identify and evaluate potential grantees aligned with the mission of the foundation
• Investigate activities and legal status of potential grantees to ensure compliance with private foundation rules, including rules related to legislative and political activity
• Prepare grant agreements and facilitate payment of grants
• Prepare expenditure responsibility reports
• Provide ongoing monitoring of grantees’ use of funds
• Ensure compliance with mandatory distribution requirements
• Counsel on legal issues with mission-related, as well as program-related, investing
• Structure program-related investments (PRIs)

Planned giving and development
Nutter represents its nonprofit clients in the planned giving and development context, as well as advises its donor clients in structuring planned gifts to meet their charitable and tax-saving goals.  We draw upon broad expertise gained from counseling both charitable organizations and philanthropists to:

• Assist charitable institutions in preparing for major capital campaigns
• Deliver presentations to members of development offices and provide written client advisories on new or evolving areas on fundamentals of tax rules and best practices of law
• Provide standard form documents for charitable remainder trusts, pledges, gift annuities and the like, as well as documents tailored to particular prospective donors
• Review promotional literature and fundraising materials
• Review donor advised fund practices and giving procedures
• Prepare gift acceptance policies, including policies regarding acceptance of closely-held stock, LLC and partnership interests, S corporation stock, real estate interests, conservation easements, and other intangible property
• Represent charities and donors regarding negotiation of complex lifetime and planned gifts, including contributions of interests in real estate, stock in closely-held corporations, and art work
• Counsel on the use and investment of endowment and restricted funds, including the release of outdated and impracticable restrictions on institutional funds
• Advise charitable clients on their interests in estates and trusts
• Represent organizations before the Attorney General Nonprofit/ Charities Bureau in compliance and advocacy matters