Pro bono and community service is an essential duty for Indiana attorneys, but helping doesn’t have to feel like work. Helping new and existing nonprofits allows lawyers to merge their legal expertise with their personal interests and hobbies, while making a noticeable difference in their communities. Many companies offer a billable credit for nonprofit volunteer work, and many employers also offer paid time off for community service and volunteer days.
Nonprofits come in many forms and can support a wide range of services, making it easy to find one that matches a particular interest or purpose. Whether it’s your favorite amateur sports league, your kids’ daycare, or a museum you like to visit, local nonprofits all need some level of legal services.
The need for nonprofit volunteer representation, as well as board and committee service, is particularly high now that new charities are emerging to solve problems and existing nonprofits are struggling with the challenges. economic difficulties caused by the pandemic. While attorneys can certainly serve nonprofit clients through pro bono work, they are also uniquely positioned to work and serve on boards, committees, or other functions that may fall outside the scope of pro bono legal work. Under section 6.7 of the Indiana Professional Conduct Rule, pro bono legal services are legal services provided directly to persons who are reasonably believed to be of limited means. Although this article focuses primarily on pro bono efforts related to the formation and organization of Indiana nonprofits and the experiences of attorneys serving on boards and committees in nonprofit, many pro bono and community service opportunities exist for attorneys who wish to serve nonprofit organizations in another way. .
The legal process involved in creating a new nonprofit organization often requires a certain amount of legal analysis.
Clients forming a nonprofit often lack the funds to hire an attorney, but still need help with the technicalities of forming a nonprofit and applying for tax exemption. To start a nonprofit organization (specifically, an organization seeking an exemption under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended), the organization must write and file its articles of association with the competent State authority. In Indiana, nonprofit corporations incorporate with the Indiana Secretary of State. In order to qualify for Code Section 501(c)(3) status, certain provisions will need to be included in the articles, including language related to the purposes of the nonprofit corporation and what will happen to it. its assets upon dissolution.
The organization should also write its bylaws and any policies to be approved at the organization’s first board meeting. After the Articles of Incorporation are certified by the Indiana Secretary of State and the organization’s bylaws and policies are drafted, the organization’s Board of Directors may meet to pass Board of Directors resolutions. ‘administration. By these resolutions (adopted by majority vote at the Board meeting or signed by all Board members by unanimous written consent), the Board may adopt the Articles of Association, any organizational policies, authorize the submission of an application for a employer identification, or EIN, from the IRS, appointing officers of the organization, authorizing the officers to take steps to complete the organization’s formation, and dealing with similar organizational matters (for exampleopening a bank account).
After the organization meeting (or after execution of the organization’s written consent), the organization may proceed with obtaining an EIN, opening a bank account, and beginning of the exemption request process.
The longest part of the process is to claim an exemption from federal income tax by completing and filing Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Code. with the IRS, which has a $600 filing fee. Some small and medium-sized nonprofits may choose to file Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Code, which costs significantly less to file and requires less information to fill out.
Heather Moore, an attorney at Faegre Drinker Biddle & Reath LLP, has helped establish many Indiana nonprofits through Faegre Drinker’s pro bono program. Moore described several challenges with starting nonprofits, including the time it takes for the IRS to review and approve an organization’s tax-exempt status, which can take up to seven or eight months. after submitting a Form 1023 request for review (unless the IRS grants expedited review). Regarding the time commitment, Moore explained that drafting the documents to incorporate and create a nonprofit can take a few hours or more, depending on whether the lawyer has templates to use as a starting point or develops organizational documents from scratch. Moore further noted that drafting the Form 1023 request can take up to 10 hours or more, depending on an attorney’s familiarity with the request and the activities the organization plans to engage in. Once an organization receives a determination letter from the IRS confirming its tax-exempt status, the organization must file an NP-20A, Nonprofit Application for Sales Tax Exemption, with the department. of Indiana Revenue as soon as possible, claiming an Indiana sales tax exemption. Other states have similar exemption request processes at the state level.
In addition to legal representation, attorneys can also help nonprofit organizations by serving on boards of directors or participating in committees, where they often provide a unique perspective.
“Lawyers are really good at helping a group get the ball rolling, creating action items and keeping deliverables really concrete,” said Sarah Thompson Parks, litigation partner at Quarles & Brady LLP.
Parks serves on the Indianapolis Art Center’s Young Professionals Advisory Board, which helps elevate the mission of the Indianapolis Art Center, prepares programming events targeting young professionals to increase engagement and volunteers with the center. art. Parks also serves on the Children’s Organ Transplant Association’s Miracle Maker Committee, which plans the organization’s annual fundraising event.
COTA is a charitable organization that facilitates funding for families of children who need organ transplants, including covering donor expenses. Parks first heard about the organization when she covered her own expenses as an organ donor.
“I personally care a lot about the mission and have seen the impact it can have on a family and a community, being there for people in a tangible way when they are going through a very difficult time and lightening a part of this burden,” Parks says.
In addition to having a positive impact on the community, serving on a committee can be a great way to try serving on the board as a young professional, even if you don’t have the experience to serve on a board. advice. As for the time commitment, “it can be anything you make of it,” Parks said. “There’s so much more you can do beyond the minimum requirement of being a committee member.”
Elaena Harris, a partner at Faegre Drinker, serves on the Fort Wayne Metro Board for the YMCA, chairs its Christian Emphasis Committee and participates on its Board Development Committee. Harris joined the organization’s board of directors after being recruited by the chairman of the board. Harris volunteers at least four or five hours of her time per month to participate in board and committee meetings and devotes more time to planning events and presenting at organizational workshops or other public forums .
Harris explained her favorite thing about being a board member: “I’m a problem solver in my local community, doing multiple projects that could have a really big impact, and I’m really into it. proud.” Harris further described several initiatives and programs being carried out by the organization, including a major fundraising campaign project to build an enterprise zone that should provide technical training and alternative educational opportunities for community members.
Harris further described the organization’s programs: “They identify a need in the community and want to be at the center of it, providing opportunities for community members. …Our Y is more than just a gym, it’s one of the largest child care providers in the community, it offers many health initiatives, it supports education in the State of Indiana and offers programs such as financial literacy training, lifeguard services and swimming lessons. ”
Harris thinks the organization is ideally placed: “The Y is not a church, it is not a for-profit entity and it is not politically affiliated. … His outreach and community programs are really powerful, and he leads and does his work very quietly.
Harris strongly encourages other attorneys to serve on nonprofit boards and/or committees, noting that it has helped her make connections and integrate into the Fort Wayne community, but the best part is making a difference: “I feel great after leaving our board meetings. I feel like I’m helpful. I feel like I’m doing well. »•
Rachel Phillips is a partner at Faegre Drinker Biddle & Reath in Indianapolis and Zena Braish is a partner lawyer at EVERSANA. The opinions expressed are those of the authors.