Nonprofits, philanthropists, and companies face increasing calls for greater accountability and effectiveness from direct and indirect stakeholders. Tax-exempt organizations are encountering challenges of growing complexity, which require creative solutions to ensure their work can be pursued with dedication, integrity, and innovation.
The Tax-Exempt Organizations team employs our comprehensive knowledge of market practices to develop innovative structures and vehicles that help clients maximize their charitable, policy, and social impact. Clients turn to us on issues involving collaborations and consortiums, complex multiparty transactions, corporate and venture philanthropy, governance, impact investing, intellectual property licensing, internal investigations, international affiliations, major gifts, and regulatory compliance, among many others. Leveraging our firm’s full breadth of experience, we provide sector-based insights and advice tailored to each client’s unique needs.
Our clients span the philanthropic sector. We advise public charities, medical research organizations, advocacy and political organizations, corporate and venture philanthropists, donor-advised funds and donor collaboratives, family offices, international organizations, academic institutions, private foundations, and prominent donors.
We counsel clients on a wide variety of complex issues.
- Social Impact Investments. Using well-established investment tools, a growing number of foundations, public charities, family offices and high net worth individuals are investing to further their charitable goals and increasing their social impact. We work with clients to align their investment strategies with their values by structuring, among others, program- and mission-related investments, loan and loan guarantee programs, and emerging tax-exempt and hybrid investment funds, all with the goal of benefiting society and, if successful, generating financial returns. Through these investments, our clients are able to have a greater societal impact than they can achieved with philanthropy alone.
- Intellectual Property. Our attorneys offer innovative, integrated expertise in structuring rights to maximize the impact of IP developed under charitable dollars. We have a broad-based IP practice that counsels both nonprofit and for-profit companies in developing, protecting, licensing, and enforcing all types of IP rights.
- Joint Ventures, Mergers, Restructurings. We advise nonprofit organizations in restructuring their activities through, among other methods, mergers, acquisitions, and spin-offs.
Medical Research Organizations and Academic Institution Collaborations
- Research Institutions, Research Centers, Naming Rights, and Endowments. We have worked with numerous clients in establishing independent research institutions as well as research centers within existing academic or medical research institutions, and we have secured naming and branding rights for these institutions and centers. Our work in this area includes guidance on programmatic structures and governance to ensure accountability by the grantees and includes the endowment of chairs or other faculty positions that allow a donor’s legacy at a particular institution to continue well into the future.
- Academic Collaborations/Consortium Work. In addition to supporting clients who are making more traditional academic grants, we have assisted our medical research organization clients in establishing multi-institution consortia to pursue solutions in cancer immunotherapy, bipolar disorder, schizophrenia, immunology, neurometabolomics, Type 1 diabetes, neurofibromatosis, and other disease- or cause-specific areas. These multiparty collaborations, which have resulted in over $1 billion being committed to medical research, draw upon our deep and unique understanding of university patent, publication, licensing and similar policies, which impact the structure and operation of the consortium and the spin-out of commercial entities. Our demonstrated ability to work with multiple parties simultaneously to structure an approach to pursue a common goal has resulted in our nonprofit clients moving the needle on medical research in a meaningful and tangible way and getting life-saving treatments out to patients.
- Intellectual Property. For our nonprofit clients funding scientific and medical research, we have developed IP and commercialization policies to apply to funded research; established research affiliations with universities and other research institutions; established joint ventures with for-profit pharmaceutical and other life science companies; counseled on structuring and establishing technology transfer offices; and prepared the associated template documents (e.g., invention disclosure forms, non-disclosure agreements, license agreements).
- Conflict of Commitment and Conflict of Interest Policies. We have worked with many exempt organization clients to develop and implement Conflict of Commitment and Conflict of Interest Policies, in particular in the area of medical research, that are structured to ensure that outside professional activities and financial dealings of organization employees and board members do not interfere with their professional commitment of time and intellectual energy to the organization, and to maintain the integrity and transparency of financial relationships between organization directors and employees and outside entities.
- Data Sharing. Many of our medical research clients place great importance on data sharing among grantees and research partners, with the goal of breaking down the silos that often exist in academic and medical research. We have worked alongside these clients to develop effective data sharing policies and practices that preserve patentability of IP, while also allowing grantees to learn from and build upon each other’s work. Our cross-disciplinary team brings expertise in data privacy (including HIPAA), electronic security, and cross-border data and materials sharing to ensure that data is shared in a compliant manner.
- Commercialization. With colleagues from across the firm, we represent our medical research and other tax-exempt clients in spinning-out intellectual property, obtaining financing, and working to commercialize products, equipment and techniques developed using such IP.
- Private Foundations. We have extensive experience advising private foundations and operating foundations, including family, independent, and company foundations and corporate giving programs, on organizational and operational matters. We assist foundations in complying with the private foundation excise tax regime, including complying with payout requirements, self-dealing, jeopardy investments, excess business holdings and taxable expenditures (grantmaking).
- Family Offices and Wealth Planning. We work often with family offices in structuring, managing, and operating a family’s philanthropic and policy vehicles and initiatives, including preparing shared resources agreements among the family office, for-profit mission-related entities, and the family’s nonprofit organizations. We work with families that have multiple and wide-ranging philanthropic, investment, and advocacy vehicles to achieve their mission-aligned purposes. We work closely with our trusts and estates colleagues to advise clients on charitable gift planning and the advantages and disadvantages of the various charitable vehicles available to implement their philanthropic goals.
- Major Gifts. We structure and draft gift agreements on behalf of charities and donors that often involve extensively negotiated provisions and requirements. We have represented high profile donors — whether anonymously or with donor recognition — on some of the largest charitable gifts in history.
- Donor Collaboratives and Donor Advised Funds. We advise on the formation and operation of donor- advised funds and their sponsoring organizations, donor collaboratives, supporting organizations, online charitable giving platforms, and community foundations. Our work includes policy work relating to donor advised funds and charitable giving platforms.
Corporate Philanthropy and Community Engagement
- Corporate Philanthropy and Foundations. We advise major U.S. and multinational corporations on the structure and implementation of corporate philanthropic programs, both through corporation foundations, employee-giving programs, or the corporation’s own community impact projects. Our work includes the creation and operation of related corporate foundations, providing a range of advice on grantmaking and major gifts, compliance with the self-dealing rules, and employee- and resource-sharing. This work focuses both on activities in the U.S. and internationally. We also work with our corporate clients on partnerships with nonprofit organizations, including corporate sponsorships and cause-related marketing.
- Employee Giving and Engagement. We assist our corporate clients in structuring effective employee engagement initiatives, including matching gift programs — through corporate foundations and donor advised funds — and employee volunteer programs (such as corporate-sponsored volunteer programs and incentives for employee volunteering and nonprofit board service). We frequently advise on effective tracking and reporting of corporate philanthropy (including donations and volunteering by companies and their employees), including to comply with ESG and other reporting requirements.
Advocacy and Political Activities
- Advocacy, Lobbying and Political Activities in Furtherance of Mission. We advise clients on how to use advocacy, lobbying and political activities to achieve their policy- and mission-related goals, while complying with restrictions arising from their tax-exempt and corporate status. This includes advising private foundations on how to structure policy programs and grants that do not violate the foundation prohibition on lobbying, advising public charities on permissible lobbying and non-partisan election activity, and advising 501(c)(4) organizations engaging on the full range of lobbying and political activities.
- Compliance with Full Range of Lobbying, Campaign Finance, and Ethics Rules. In connection with this work, we also advise clients on compliance with federal lobbying disclosure and campaign finance laws, congressional and executive branch gift rules, federal bribery and gratuity laws, government procurement restrictions, as well as equivalent state and local laws.
- International Affiliates. We represent multiple U.S.-based charities that conduct activities internationally, as well as foreign charities that seek to fundraise and engage in activities in the U.S. We work with our clients to strategize and implement a variety of operational structures, including foreign affiliates, branch offices, and fiscal sponsorship arrangements, and advise on optimizing where operations, assets and employees should be located within a multi-national structure.
- International Philanthropy. We work with numerous charities, foundations, company foundations, and corporate giving programs in developing and implementing strategies and options for effective international giving and ensuring compliance with the rules for grants to foreign charities. We advise organizations on the use of "friends of" organizations, donor-advised funds and intermediary organizations, and foreign offices and subsidiaries to facilitate compliant international giving and activities.
- International Compliance. We work closely with our colleagues within the firm who have significant experience with antiterrorism (Office of Foreign Assets Control), Foreign Corrupt Practices Act, and Foreign Agents Registration Act laws and regulations to provide advice in this complex area. We work closely with local counsel to advise on structuring and manage compliance under local laws.
Controversy, Governance, and Internal Investigations
- Tax Controversy. Our attorneys have extensive experience representing tax-exempt clients in audits and other administrative proceedings before the IRS, as well as in litigation against the IRS in the federal courts. Members of our tax practice also represent clients in administrative proceedings and litigation involving state and local tax agencies.
- State Charity Regulation. We have an in-depth understanding of the state regulation of nonprofit organizations and effectively counsel organizations about state law requirements, compliance reviews, and investigations by state regulators, including requirements related to governance and fiduciary duties of directors and officers, managing investments and endowment funds, charitable fundraising, enforceability of charitable pledges, donor intent, property tax exemption, and sales and use tax exemption.
- Governance. We have handled complex management and governance matters for tax-exempt organizations, including organizations operating within affiliated structures. We also assist organizations with preparing various governance policies and provide advice on establishing board committees to oversee governance and related practices of organizations.
- Internal Investigations. We have conducted high-profile and complex internal investigations for tax-exempt organizations, including alleged financial, governance, management, and government grant improprieties, potential violations of the Foreign Corrupt Practices Act and foreign asset and export control regulations, and investigations related to employment practices.
Operations and Management
- Employment and Employee Benefits. Our firm has a core team of employment lawyers who assist our tax-exempt clients with employment litigation, employment law counseling and compliance, and corporate/transactional employment matters. We review and develop employee policies, handbooks, offer letters, employment contracts, separation agreements, and other related documents. We also counsel on state-specific employer versus independent contractor distinctions, remote work policies, and tax effects of having employees in various remote locations in the U.S. and internationally.
- Compensation Review and Structuring. Information about the compensation of top executives and board members of nonprofit organizations is publicly available and subject to intense scrutiny by the public, the media, legislators, and regulators. We assist organizations in structuring executive and board compensation that is reasonable and complies with the intermediate sanctions rules for public charities and the self-dealing rules for private foundations. We advise tax-exempt organizations in developing innovative compensation arrangements when appropriate, such as creating and implementing an "equity-like" compensation program for employees.
- Government Contracts and Grants. Our firm’s government contracts and grants practice has extensive experience advising nonprofit recipients of federal funding. We frequently advise tax-exempt recipients of federal grants with respect to grants compliance programs, as well as conducting internal investigations and responding to federal audits and other enforcement actions.
- Real Estate Transactions. Real estate transactions play a significant role in the operations of tax-exempt organizations. We represent colleges, universities, and other nonprofits in the acquisition, development, financing, and leasing of a wide range of facilities.
- Unrelated Business Income Tax (UBIT). Nonprofit organizations that seek additional funding from revenue-producing business activities must understand the taxability of these activities pursuant to the unrelated business income tax. Revenue-producing activities can take many different forms, such as commercial real estate investments, joint ventures with private parties, privately sponsored research, and corporate sponsorship of events and publications.
The Parker Institute for Cancer Immunotherapy (PICI) in structuring, negotiating and documenting an approximately US$300 million research consortium in affiliation with six U.S. academic and medical research institutions. The PICI model establishes a collaborative approach to centralize tech transfer and commercialization, and is designed to remove barriers, encourage collaboration and turn ideas into real-world cancer treatments.
Medical Research Organization in its US$600 million founding of a research hub in San Francisco in affiliation with one private and two public universities, and its US$250 million founding of a research hub in the mid-west with two private and one public university. The San Francisco research institution focuses on quantitative cell science, infectious disease, and technology platforms; the Chicago institution will create technologies to measure human biology and study inflammation to understand disease and discover new therapies.
Palo Alto Research Institute in its establishment of a US$650 million medical research organization aimed at advancing scientific research in complex diseases, including neurodegeneration, cancer and immune dysfunction. The Institute fully funds investigators who may have faculty appointments at affiliated universities; establishes technology centers that focus on machine learning, genome engineering and cellular and animal models of disease; and has a translational infrastructure that accelerates the advancement of new biotechnologies to maximize patient impact.
The Lieber Institute for Brain Development in its formation and affiliation with Johns Hopkins University; developed intellectual property, publications, and conflicts policies for the institute; advised on licenses and collaborations with other researchers and private companies; counseled on material transfer arrangements to establish the world’s largest repository of post-mortem human brains for the study of neuropsychiatric disorders.
Multiple Family Offices in structuring, managing and operating the family’s philanthropic and policy vehicles and initiatives, including individual charitable giving, supported tax-exempt organizations (including private foundations and 501(c)(4) advocacy organizations), and for-profit mission-related entities and investments.
In-Q-Tel, a nonprofit funded by the Central Intelligence Agency, on equity and other investments in technology companies as a way to develop and acquire cutting-edge technologies for the intelligence community, to the board and board committees on governance, compensation, conflicts, and fiduciary responsibilities, and on a wide range of regulatory matters.
The Markle Foundation on its general operating and philanthropic matters, including its Rework America Alliance’s efforts to expand access to quality jobs for all Americans.
The Joyce Foundation, a private, nonpartisan philanthropic organization, in its programmatic work to invest in public policies and strategies to advance racial equity and economic mobility.
Generation: You Employed, an organization that transforms education to employment systems, in structuring and managing its U.S. operations and international network of affiliates and ongoing legal advice regarding on a broad range of operational matters, including network-wide policies and agreements.
Women Moving Millions in strategic plans and implementation of donor collaboratives.
An art museum in restructuring its art collections and endowment funds using a supporting organization.
The Brooklyn Museum on a wide variety of matters, including general contracts, intellectual property issues, and gift agreements.
Delterra, an environmental nonprofit working to transform entire ecosystems in waste management and recycling, in spinning out from a parent entity, establishing an international structure of affiliates to implement its work and collaboration agreements with nonprofit and for-profit partners.
Environment Next, an environmental nonprofit, in establishing an international grantmaking and technical assistance program, advising on venture philanthropy and impact investments and managing carbon credit projects.
Key ContactsSee All Related Professionals
The Legal 500 USUS Taxes: Not-For-Profit (Non-Profit and Tax-Exempt Orgs) (2022)
Chambers USATax (DC) (2023)
Tax (DC) (2022)