People who manage or participate in the affairs of nonprofit organizations often assume that the organization’s nonprofit status insulates it from the financial and legislative storms that periodically buffet profit-making entities, and that it does not need expensive lawyerly advice. Unfortunately, this assumption often proves to be false. Nonprofit organizations require competent legal advice just as often as their profit-making counterparts.
The basic reasons why nonprofits must rely on competent legal advice
Proper organization is the key to achieving nonprofit status. A competent attorney should be retained to draft articles of incorporation, by-laws, and any other documents necessary to complete the basic organization process. Mistakes made by do-it-yourselfers may not appear until too much time has passed to correct fundamental errors.
Lawyers for other issues
Many nonprofit organizations create intellectual property that must be protected from infringement. This property may include a mission statement, name, logo, and trademarks. Lawyers with nonprofit experience will know how to take the necessary steps to protect the organization’s intellectual property.
Taxation is always an important issue for nonprofit organizations. If a nonprofit organization wants to achieve and preserve its nonprofit status, a qualified attorney should be retained to provide advice on compliance with both federal and state tax laws.
Relations with other entities
Nonprofit organizations do not exist in a vacuum. For example, many nonprofit organizations such as trade associations regularly hold annual or regional meetings. These meetings require renting a space for the gathering, contracting for food services, and arranging adequate furniture and equipment. A nonprofit may also wish to employ an independent media company to make a video of the meeting or provide graphics for other purposes.
Nonprofit organizations also may need to go outside the organization to have legal guidance as they plan for the future and deal with legal issues that arise.