Why Your Tax Exempt Business Needs a Nonprofit Attorney

As the head of a nonprofit, you wear many hats. You are responsible for everything from fundraising to program development to managing staff. With so many balls in the air, it is easy to let some things fall through the cracks. But there is one area you cannot afford to neglect: legal compliance.

5 Reasons Why Your Nonprofit Needs an Attorney

Reason #1: To Keep Your Tax-Exempt Status

If your nonprofit is not in compliance with state and federal regulations, you could risk losing your tax-exempt status. That would be a disaster for your organization, since nonprofits rely on donations to keep their doors open. An attorney can help you navigate the complex labyrinth of laws and regulations surrounding charitable organizations so that you can avoid any missteps that could jeopardize your tax-exempt status.

Reason #2: To Handle Contracts and Agreements

As a nonprofit, you likely enter into a lot of contracts, agreements, and memorandums of understanding with other organizations. For example, you might contract with a marketing firm to help with fundraising or an event planning company to help with a gala. It is important to have someone on your team who understands the legalese in these contracts and can look out for your organization’s best interests. Otherwise, you could end up agreeing to terms that are unfair or even harmful to your nonprofit.

Reason #3: To Manage Risk and Liability

No organization is immune to risk, but nonprofits face unique challenges when it comes to managing risk and liability. For example, if one of your volunteers is injured while participating in a charity event, you could be held liable. An attorney can help you identify potential risks and put policies and procedures in place to mitigate them. 

Reason #4: To Stay Up-To-Date on changing laws 

The laws governing nonprofits are constantly changing, which can make it hard to keep up. But if you don’t stay current on the latest developments, you could run into trouble down the road. An attorney can help you stay abreast of changes in the law so that you can make sure your nonprofit is always in compliance. 

Reason #5: To Help With Governance Issues 

Nonprofits are governed by a board of directors or trustees who are responsible for making decisions about the organization’s direction and operations. If there are disagreements among board members or between the board and management, an attorney can help resolve them. 

As the head of a nonprofit, legal compliance should be at the top of your list of priorities. There are serious implications (including the loss of tax-exempt status) if your organization is not in compliance with state and federal regulations. An attorney can help you navigate the complex labyrinth of laws and regulations surrounding charitable organizations so that you can avoid any missteps that could jeopardize your tax-exempt status. In addition, an attorney can help you handle contracts and agreements, manage risk and liability, stay up-to-date on changing laws, and resolve governance issues . Do not wait until there’s a problem; put a qualified attorney on retainer now so that you can rest assured knowing your nonprofit is always in compliance with the law.