An important part of maintaining an organization’s 501(c)3 tax-exempt status is correctly filing paperwork. It may be a tedious job, but it is essential for any charitable organization. Some may wonder why so much paperwork is involved in obtaining and keeping a charitable status, but it all has to do with how the government looks at tax exemption.

In the ordinary course of business for any nonprofit, members of the board of directors will come and go. Sometimes a board member leaves voluntarily, and other times the organization takes action to remove a board member. It’s important to handle each situation correctly and according to your organization’s bylaws.

At some point, every nonprofit will have a board member who doesn’t attend meetings regularly. Some board members think being on the board is just an honorary role to lend the weight of their name or their company to the organization. For others, life happens, and they may need to step back a bit.

When you have a great philanthropic idea, there are many things to consider about how you accomplish that goal. How you set up the legal entity is one of the critical first steps, and that includes the question of nonprofit versus for-profit organizations. The choice involves not only the legal definition of what qualifies as a nonprofit, but also what option makes the most sense for you. Each has its own benefits and drawbacks.

When these situations occur, the concern is that one party could unfairly benefit from the transaction because of the existing relationship. That’s an issue because, according to IRS regulations, nonprofits are not allowed to operate for the benefit of private interests. If a conflict of interest arises and there is an overpayment or underpayment involved (thus someone received a benefit), those transactions are subject to taxes and penalties that can be quite costly.

In those examples, the entire situation could have been prevented if some basic practices were in place. In other situations where the embezzlement is much more intentional and malicious, having the right policies and practices could lessen the damage by catching the issue sooner.

Fraud costs nonprofits thousands of dollars annually and occurs in many different forms. Embezzlement is when an employee steals money from the organization for their own personal use, and it happens more frequently than you might think, especially within nonprofit organizations.

Employers, as the controllers of employee's livelihoods and ability to access essential services, have a legal obligation to ensure that their employees are protected from discrimination.

We recommend that organizations consider diversity training for their board and all employees before staff members return to the office and regular programming resumes. With sometimes heated debate occurring around the topic of racial justice right now, being proactive with training can help reduce the risk of discrimination claims or tension among team members.

All organizations interact with people and therefore carry some amount of risk. Generally, potential risk for nonprofits falls into three basic categories: corporate compliance, employee and HR compliance, and programming/events. It’s important to consider risk in all three categories and take appropriate steps to mitigate that risk in advance.

One of the things we talk to nonprofit clients about a lot is taking a proactive approach to legal matters. A proactive approach means you address any potential legal problems before they happen or as soon as you see them happening instead of waiting until they become bigger issues.

There are a lot of nonprofit organizations in Oklahoma and across the United States. Some are well-established and extremely successful, while others struggle through their first few years and eventually close down completely. As nonprofit lawyers, we know that nonprofit failure isn’t due to lack of heart.

It’s good for companies to give back to the community and be socially responsible. But it comes with some caveats, and every nonprofit organization needs to know the difference between sponsorship and advertising.

So how exactly do you distinguish between sponsorship and advertising, and more importantly, why does it matter?

The nonprofit space includes organizations of all sizes, from large national and international organizations with hundreds of employees to tiny startups with one employee or no paid staff at all. They’re all working hard to solve an issue or serve a specific population, but it takes money to do so.