While not-for-profit organizations do work that benefits society, that alone does not exempt these organizations from following the many federal, state and local laws which cover other businesses.
Governments frequently give authority to different regulatory agencies to make regulations and enforce these many laws.
There are also some cases where a nonprofit will have to interact with important private organization or associations which run much like an administrative agency.
What rules a business must follow will to some extent depend on the nature of the business. Many laws and regulations, like employment laws, for example, apply broadly.
These agencies have a lot of power to fine businesses, issue restrictive legal orders and otherwise punish organizations that the agency believes broke the law.
A negative encounter with an administrative agency can cut into a business’s profitability and reputation. In extreme cases, regulatory troubles can even cripple or destroy a business.
In short, it is critically important that a non-profit stay on top of their regulatory obligations and have a compliance plan in place to follow them. Implementing a compliance plan takes legal knowledge and skill, especially since rules frequently change and often are very detailed.
Even with a good compliance plan, a business may need to defend its interests
A good first step to avoiding regulatory troubles is for a business to know its obligations and implement policies and procedures to make sure all stakeholders meet these obligations.
Even so, there is always a possibility that a business will have to defend itself or advocate for its interests in front of the many federal regulatory agencies which can exercise authority over businesses. Businesses may also have to advocate their cases in front of state or local agencies or in front of a private organization.
Federal administrative law is often complicated. There are detailed procedures which apply to most agencies. Each agency has its own rules and regulations that will determine how they make decisions. A business facing an administrative issue must make sure it understands its options and the possible outcomes.