Good Counsel E-Book

Lesley Rosenthal

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 506

Veröffentlichungsjahr: 2011

Beschreibung

A concise overview of the legal needs of nonprofit organizations Good Counsel is a compact and personable overview of the legal needs of nonprofits, crafted by one of America's most astute nonprofit general counsels. The book distills the legal needs of the 1.8 million tax-exempt organizations in the United States.Written in a clear and accessible style, with plenty of humor and storytelling as well as illustrative case studies, Good Counsel explains the basics of nonprofit corporate law, governance, and the tax exemption. It then takes a department-by-department look at legal topics relevant to program, fundraising, finance, communications, human resources, operations, contracts, government relations, and more. Good Counsel is designed help organizations fulfill their missions to do the public good. Designed to impart confidence and demystify the issues, Good Counsel is a must-read for nonprofit professionals and board members as well as lawyers and law students. Using Good Counsel as their playbook, lawyers, executives, and trustees can get an overview of the most common legal, governance, and compliance issues facing their organization and together ramp up a top-notch legal function. * Contains practice pointers, checklists, and assessment tools * Features sample contracts, licenses, and other form documents * Filled with case studies and end-of-chapter focus questions, as well as available lesson plans for easy classroom use by educators in business, management, public policy, and law schools Good Counsel is the first-of-its-kind guidebook written by the sitting General Counsel of a major nonprofit. Written by influential author, speaker, and Bar leader Lesley Rosenthal, the General Counsel of Lincoln Center for the Performing Arts, Good Counsel shares the insights of a Harvard Law School graduate with years of in-house and business law experience as well as board service.

Leseprobe

Contents

Preface

Acknowledgments

Introduction

Who Should Use This Book

Features of the Book

How This Book Is Set Up

Preliminary Observations

Illustrative Cases

Part I: An Overview of Nonprofits’ Legal Needs

Chapter 1: What Good Counsel Can Do for Nonprofits

What Legal Needs Do Nonprofits Have in Common?

Beyond Laws about Nonprofits: Complying with Business Laws, Too

First Stop for Legal Advice: CYA (Consult Your Attorney)

In Sum/Coming Up Next

Chapter 2: Nonprofit Legal Basics: Corporate Law and the Requirements of the Tax Exemption

The Benefits of Incorporating

Getting Organized as a Nonprofit Corporation

Following Good Corporate Law Practices

Obtaining Recognition of Tax-Exempt Status

Maintaining Tax-Exempt Status

Meeting Additional IRS Expectations

Chapter 3: Good Counsel about Corporate Governance

What Does the Board Do?

Advocacy and Independent Judgment: Counsel in Relation to the Chief Executive

When Governance Fails: Learning by Negative Example

Part II: A Grand Tour of Nonprofits’ Business Law Needs

Chapter 4: Contracts and Intellectual Property: Laws that Matter to Program Staff

Understanding the Organization’s Program

Contracts: At the Heart of the Program’s Legal Arrangements

What Is Intellectual Property (and What Does It Have to Do with Nonprofits?)

Copyright Law for Nonprofits: An Introduction

Chapter 5: Counseling the Rainmakers: Legal Aspects of Raising Money

A Lawyer’s Introduction to Fundraising

Laws That Matter to Fundraisers

Other Places Where Legal Meets Fundraising

Better Fundraising Through Good Governance and Compliance

Chapter 6: Laws That Matter to the Finance Department (or Not-for-Profit, but Not-for-Loss Either)

Understand the Big Financial Picture

A Year in the Life

Other Places Where Legal and Finance Meet

Chapter 7: Getting Personnel: Human Resources Law for Nonprofits

Human Dynamics, Nonprofits, and the Law

Key Legal Elements of Employment Relationships

Other Laws that Matter to Nonprofit Human Resources Professionals

Chapter 8: Getting the Word Out, Legally: Counseling the Nonprofit Communications Team

Introduction to the Legal Aspects of Nonprofit Communications

What Nonprofit Marketing Directors Should Know about Trademark Law

Clearing Rights to Use the Protected Works of Others

Consumer Regulatory Laws

Getting the Word Out, Digitally

Other Places Where Legal Meets Communications

Chapter 9: Legal Meets Operations, Facilities Management, and Security

Laws That Matter to Operations

About Leases

Risk Management and the Chief Operating Officer

Chapter 10: Political Activities and Governmental Lobbying

Thou Shalt Not Politick

Lobbying: Advocacy with Limits

Recordkeeping, Registration, and Financial Disclosure

What Isn’t Lobbying?

Part III: For Good Counsel Only

Chapter 11: Taking Charge of the Legal Function

Catalogue and Prioritize Legal Needs

The Softer Skills of Good Counsel

Chapter 12: Finding Your Dream Job as In-House Counsel at a Nonprofit

Where to Begin Searching for an In-House Job at a Nonprofit

How to Position Yourself to Win an In-House Job in a Nonprofit

Don’t Believe the Myths

Chapter 13: Mobilizing Other Legal Forces for the Good

Paid and Pro Bono Representations

A Broad-Gauge Role for the Legal Profession in the Nonprofit Sector

Notes

Index

More praise for

Good Counsel: Meeting the Legal Needs of Nonprofits

“Essentially a one-volume guide to the entire practice of law relating to nonprofits—a remarkable achievement!”

—Kelly Kleiman, The Nonprofiteer; Principal, NFP Consulting (Chicago)

“A remarkable, comprehensive, thoughtful, wise, and useful book. Good Counsel will be of immense value to new and experienced board members, regulators and commentators, and counsel. I have not seen anything like this in a publication. An exceptional tour de force, drawing upon Rosenthal’s incredible range of experience as a General Counsel.”

—Scott Harshbarger, former Attorney General of Massachusetts

“Good Counsel serves as a layman’s legal primer for nonprofit organizations. It is everything about nonprofits that you need to know, and a must read for its leaders, boards, and donors.”

—Philip L. Milstein, Trustee, Columbia University

“Lesley Rosenthal’s Good Counsel fills a much-needed void of information for the nonprofit world. It is an invaluable resource in furthering the public good.”

—Damian Woetzel, Director, Aspen Institute

“Good Counsel was desperately needed, and Lesley Rosenthal was the perfect person to write it.”

—Jeannie Suk, Professor of Law, Harvard Law School

“Good Counsel is an invaluable first-stop reference for anyone who now does—or has ever wanted to—work or volunteer as a nonprofit lawyer or executive.”

—Victoria B. Bjorklund, Head, Exempt-Organizations Group, Simpson Thacher & Bartlett LLP, and co-author, New York Nonprofit Law and Practice

“ . . . an absolutely invaluable book for any lawyer who does pro bono work for nonprofits . . . ”

—Jeffrey S. Tenenbaum, Chair, Nonprofit Organizations Group, Venable LLP, Washington DC

“Good Counsel, Lesley Rosenthal’s extraordinary work about the legal issues, problems, and obligations facing nonprofits, is a magnificent resource, full of practical advice for officers, directors, trustees, employees, and corporate partners. Anyone so engaged should purchase Good Counsel for frequent reference.”

—John P. McEnroe, director of a family foundation and The Irish Repertory Theatre

“I’ve read many books and guides for these various audiences, but never something this comprehensive and accessible. Lesley Rosenthal has done a terrific job in striking all the right notes. Easy and fun to read!”

—Marnie Berk, Director, Pro Bono Programs, New York Lawyers for the Public Interest

“Good Counsel is a valuable contribution to members of the nonprofit bar and all those who seek insight into the world of inhouse lawyers: their day-to-day responsibilities, what motivates them, and the issues they confront.”

—Michael S. Solender, Americas Vice Chair and General Counsel, Ernst & Young; Lecturer, Yale Law School

“Good Counsel is an indispensable training manual on corporate governance. It is a must-read for anyone serving the legal needs of nonprofits.”

—Tracee E. Davis, Trustee, Literacy, Inc.

Copyright © 2012 by Lesley Rosenthal. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: We hope you will find this book to be a useful preliminary guide to the legal issues facing nonprofits. The book is for informational purposes only and does not constitute legal advice. While this information can help you understand the basic subjects, it is very important that you obtain the advice of a qualified professional where appropriate.

While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The information contained herein may not be suitable for your situation. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Rosenthal, Lesley, 1965–

Good counsel : meeting the legal needs of nonprofits / Lesley Rosenthal. — 1

p. cm.

Includes index.

ISBN 978-1-118-08404-5 (cloth); ISBN 978-1-118-22279-9 (ebk);

ISBN 978-1-118-23667-3 (ebk); ISBN 978-1-118-23683-3 (ebk)

1. Nonprofit organizations—Law and legislation—United States. I. Title.

KF1388.R67 2012

346.73′064—dc23

2011039741

Preface

Every nonprofit organization I have served has had a tiny or nonexistent legal team. From the modern dance company with a shoestring budget I helped out as a fledgling attorney, to the child care advocacy organization I served when its outside pro bono general counsel suddenly passed away; from my childhood summer camp that tracked me down as an adult and invited me to join the board, to the foundation of one of the greatest violinists in history and to the largest voluntary state bar association in the nation with 75,000 members—the total number of in-house counsel in each organization has been binary: zero or one.

Even when I arrived at Lincoln Center for the Performing Arts, Inc., the world’s largest and most comprehensive performing arts center, from Paul Weiss Rifkind Wharton & Garrison, a 500-lawyer major law firm in Manhattan where I had practiced for the previous 13 years, Lincoln Center’s Legal Department consisted of just an executive assistant and me. When friends who knew the size of my previous practice setting asked me how big Lincoln Center’s staff of lawyers was, I would look myself up and down and joke, “Oh, around five-foot-five!”

These experiences are not at all unusual: Of the nation’s one million charitable organizations, only a minuscule fraction has regular access to counsel, whether in-house or outside, paid or voluntary. The organization’s first hire is its executive director, usually its founder; next come program managers: drug counselors for drug treatment programs, teachers for educational organizations, curators for museums, and so on. Successive hires may include fundraisers, financial and accounting staff, and an administrative manager to take care of personnel and office matters. Public relations may soon follow, and if the organization has physical facilities to operate and secure, someone will eventually be hired to oversee and coordinate that work. Early on the organization may have an outside accountant, an outside public relations firm, management, and/or fundraising consultants. But unless the organization has an unusually high-risk profile or is particularly savvy about legal matters, it is generally not until the organization has reached a much larger size—perhaps the hundredth employee—that consideration will be given to putting an attorney in charge of the organization’s legal affairs.

Until now. Tectonic shifts in the nonprofit landscape are persuading directors and senior executives that it is necessary and desirable to bring on counsel to oversee the organization’s legal function at a much earlier stage in the organization’s life. Fortunately, there is a great deal of goodwill for nonprofit organizations among public-spirited lawyers, and there is more time and willingness to serve among the legal profession than has been fully tapped to date. Lawyers can serve nonprofits as in-house counsel or from the outside, at law firms. Outside or in-house, paid or volunteer, there should be one person—a general counsel—in charge of overseeing the legal affairs of most tax-exempt nonprofit corporations.

With this book, I hope to show nonprofits how to better recognize their legal needs and, at the same time, to inspire and empower a new generation of lawyers and law students, whose primary exposure may be far afield of the issues facing nonprofits, to help meet those needs.

My arrival at Lincoln Center in 2005 coincided with a budgetary mandate to significantly cut the Center’s expenditures for outside legal fees in order to ensure that scarce mission-critical funds would go to core program areas such as arts and education.

Meanwhile, the organization’s legal, governance, and regulatory complexities were about to grow exponentially. Already a highly visible organization at the center of New York’s vibrant cultural scene, Lincoln Center was planning a $1.2 billion expansion and rejuvenation of its 16.3-acre complex. After nearly five decades of artistic excellence and service to the public, Lincoln Center was undertaking 37 projects to fully modernize its concert halls and public spaces, renew its urban campus, and reinforce its vitality for decades to come. In addition to renovating and expanding infrastructure and many of its storied performance and educational facilities, Lincoln Center also embarked on a plan to make the public areas of the campus more welcoming, user-friendly, and expressive of its arts and educational mission. The new design incorporated elements of glass where there was once opaque travertine marble; sunlight where there was darkness; innovative visitor information systems where there was once a vexing lack of signage; grass, trees, and free wireless Internet access where there were underutilized public areas; and safer spaces for pedestrian circulation. In addition, for the first time the complex would have a visitors’ center, which would feature a community gathering place with ample seating, another free Wi-Finode, free weekly performances, food service, a relaunched tour program, a staffed information desk, clean public restrooms (a rare commodity in New York City), a centralized ticket location, and a same-day discounted ticket booth.

The organization’s board itself, ably led in turn by chairs Bruce Crawford, Frank A. Bennack Jr., and Katherine G. Farley, was about to undergo a substantial enlargement, both in terms of number of members as well as engagement through expanded committee work and a major capital and endowment campaign.

The Revson Fountain at Lincoln Center

The Josie Robertson Plaza at Lincoln Center, renovated in 2009 as part of a series of 37 redevelopment projects at the complex, provides a welcoming entrance to the world’s largest performing arts center.

Mark Bussell/Lincoln Center. Reprinted with permission.

If you are in the habit of spotting legal issues, you will have identified a range of legal needs in the areas of corporate law and governance, real estate, construction, fundraising, financing, community and government relations, environmental law, consumer regulation, technology, and many more.

But that was not all. Lincoln Center’s innovative president, under the leadership of an extraordinary board and executive team, also envisioned a simultaneous redevelopment of our economic model. This economic redevelopment was building out our sources of revenue far beyond the traditional two streams—ticket revenues and contributed income. Our balance sheet would soon include income and expenses from all sorts of start-up ventures: media deals, an international consultancy practice, leases, licenses, and brand expansions into fashion, book publishing and beyond. Each of these strategic initiatives, too, would present novel legal challenges and complexities.

At the same time of the redevelopment of the complex, the growth of the board and the diversification of our lines of business, the nonprofit sector as a whole was coming into a new phase of increased regulatory scrutiny. Arising from several highly publicized nonprofit scandals in the early 2000s, and following in the footsteps of spectacular corporate governance failures of Enron and Arthur Andersen in the private sector, there was a palpable move by charities regulators at the federal, state, and local levels as well as by organizations themselves to import new Sarbanes-Oxley-style accountability measures into the nonprofit world. These moves counseled adding or enhancing audit committee charters, conflict of interest policies, whistleblower policies, executive compensation committees, and other oversight structures to a degree previously unknown in what once was a sleepy backwater called nonprofit governance.

There was no way our leanly staffed legal department could take all of that on ourselves. Fortunately, coinciding with my arrival, Lincoln Center’s President Reynold Levy and board members Bart Friedman and Richard K. DeScherer envisioned that the organization could build a council of in-kind supporters to take on this vast expanse of legal work on a voluntary basis.

Working together, we quickly began to assemble the council, which I dubbed the Counsels’ Council. Initial members included those law firms already represented on our Board of Directors, such as Willkie Farr & Gallagher and Cahill Gordon & Reindel. The law firm that had been my professional home for the prior 13 years, Paul Weiss Rifkind Wharton & Garrison, unhesitatingly accepted my request to join. To their great credit, so did Weil Gotshal & Manges, and in particular R. Bruce Rich, who was adverse counsel in one of my longest-running representations.

Today, the Council boasts over 25 members, including large law firms, the General Counsel of major companies, and even a professor or two. We lined up the legal needs—reviews of pledge agreements, government relations matters, real estate transactions, labor and employment issues, corporate governance developments and more—with willing and able providers. Together, members of the Lincoln Center Counsels’ Council have helped the organization meet the strategic and legal challenges and take on projects on a pro bono basis. The total value of this work in a little over six years is close to $8 million. The net result is a significant increase in our legal productivity and acumen—substantially greater than if we were either to do the work ourselves or to try to find the funds to pay for outside help of this magnitude.

This book came into being because the efforts of the Lincoln Center Counsels’ Council came to the attention of the president of the New York State Bar Association, Stephen P. Younger, and the Chief of the Charities Bureau of the New York State Attorney General’s Office, Jason Lilien. Messrs. Younger and Lilien had the idea to gather a statewide group of attorneys willing to serve as pro bono counsel to help meet the legal needs of tens of thousands of under-resourced and deserving nonprofits. I promptly accepted their request to help organize this effort, then started looking around for training materials.

I felt strongly that there should be a common set of materials to train the people on both sides of the attorney/client relationship: the volunteer lawyers, who may be seasoned in their own areas of the law but not necessarily knowledgeable about the legal needs of nonprofits; and the clients, leaders of worthy but unrepresented nonprofits, who may be quite sophisticated about running and overseeing their organizations but not in recognizing the range of legal needs, framing the issues, and taking the advice of counsel. In initiating a new and productive relationship between lawyers new to nonprofit counseling and nonprofit leaders unaccustomed to working with lawyers, it was important that both the lawyers and the clients play from the same playbook.

Many fine books have been written about nonprofit law, addressing such topics as what is a nonprofit, how to form and govern a nonprofit corporation, how to obtain and comply with the tax exemption, and so on. But nonprofits have business law needs besides those directly arising from their nonprofit status. Nonprofits also have employees; contracts; physical locations or facilities to operate; intellectual property; communications strategies; insurance, and more. Some excellent, although somewhat scattered, resources explain the basics of each of these complex areas in the nonprofit context: articles, associations of nonprofits, and bar groups. Yet I could not locate the book I was looking for: a single volume for attorneys counseling public charities as well as nonprofit professionals, board members, volunteers, and students of the sector who need a concise, accessible overview of the legal needs of nonprofits.

The purpose of this book is to fill that gap.

I stand in awe of the work those nonprofit executives, staff, trustees, volunteers, and other friends of the sector do with such passion, energy, and commitment. I am also inspired by the public spiritedness of the great (and sometimes maligned) legal profession, which has a tradition of volunteering free legal services—pro bono publico, for the good of the public—that I believe is unsurpassed by any other profession.

The aim of this book is to build on these efforts, to empower and facilitate even more productive relationships between and among nonprofit executives, their governing boards, and public-spirited attorneys.

This book is dedicated to them.

Lesley Rosenthal

Acknowledgments

This book would not exist without the extremely generous contributions of time and know-how by many people.

Supporters: Ted Rosenthal, Aron and David Szanto, Reynold Levy, Dan Rubin, Karen Levinson, Alicia Glekas Everett, Roy and Jenny Niederhoffer, and Cecelia Gilchriest.

Wiley editors: Susan McDermott, Jennifer MacDonald, and Donna Martone.

Overall research and drafting assistance: Adam Ness, Cardozo Law School LLM 2011; Elizabeth Dann, Georgetown Law School 2012. Case studies: Josh Sekoski, Harvard Law School 2012. Focus questions: Amy Perry, Spelman College 2012. Chapters 2 and 3: Michael Cooney, Nixon Peabody LLP; Deborah Hartnett, Music Theatre International; Mark Hoenig, Weil Gotshal & Manges. Chapter 4: Elizabeth W. Scott, Major League Baseball; Emma Dunch, Dunch Arts; Megan C. Bright, Fordham Law School 2012; Simon J. Frankel, Covington & Burling. Chapter 5: Emma Dunch, Dunch Arts; Jeffrey S. Tenenbaum, Venable LLP; John Sare, Patterson Belknap Webb & Tyler; Jane McIntosh, Lincoln Center and Columbia University Teacher’s College. Chapter 6: David Sayles, BlackRock Solutions; Kara Medoff Barnett, Shilla Kim-Parker and Clive Chang, Lincoln Center for the Performing Arts; Susan Leeds, New York City Energy Efficiency Corporation; Erin S. Gore, UC–Berkeley; Kenneth B. Roberts, Hawkins Delafield & Wood LLP; Lisa B. Herrnson, Proskauer Rose (pension law section). Chapter 7: Allan S. Bloom, Paul Hastings Janofsky & Walker LLP; Jeffrey S. Klein, Weil Gotshal & Manges; David R. Warner, Venable LLP; Debra Osofsky, Harvard Law School 1989; Philip M. Berkowitz, Littler Mendelson; Stephanie Marks, Wormser Kiely Galef & Jacobs (immigration law section). Chapter 8: Elizabeth W. Scott, Major League Baseball; Emma Dunch, Dunch Arts; Keith E. Danish, Hiscock & Barclay (trademark law section); R. Bruce Rich and Caroline Geiger, Weil Gotshal & Manges; Barry Agdern, Hearst Corporation and Donald Saelinger, Covington & Burling (sweepstakes issue-spotter). Chapter 9: Suzanne St. Pierre and Peter S. Britell, Dewey & LeBoeuf LLP; Debra Sapp, Katsky Korins LLP; Elizabeth B. Stein, Environmental Defense Fund; Andrew A. Lance, Gibson Dunn & Crutcher; John Tiebout and Sara Chang, Lincoln Center for the Performing Arts. Chapter 10: Brittany Uthoff, Harvard Law School 2011; Alexandra Megaris, Venable LLP. Chapter 11: Thomas J. Ostertag, Major League Baseball; Lewis M. Smoley, Davidoff Malito & Hutcher LLP; Cory Greenberg, Alvin Ailey American Dance Theater; Andrew J. Lauer, Yeshiva University. Chapter 12: Liza Parker, Lincoln Center for the Performing Arts; Debra Sapp, Katsky Korins LLP; Sharman Propp; Amanda B. Horowitz, Paul Weiss Rifkind Wharton & Garrison; Lisa Williams, Office of Public Interest Advising, Harvard Law School. Chapter 13: Brandon N. Egren, Dewey & LeBoeuf, David A. Rosinus, Covington & Burling.

And those patient souls who reviewed the manuscript in draft: Hon. Judith S. Kaye, Skadden Arps, and Chief Judge Emerita, New York Court of Appeals; Jay Topkis, Paul Weiss Rifkind Wharton & Garrison; Prof. Mark Kleiman, UCLA School of Public Affairs; Gary E. Friedman, Schacker Realty; Rebecca Sayles, Copland House; Phyllis Isaacson; Nancy Fadem, Americana Student Center; David Munkittrick, Proskauer Rose; Thomson Kneeland; David B. Ramsey, Harvard Law School 2005; Alan H. Fallick, Newsday; Joy A. Fallick; Julie Lineberger, Vermont Businesses for Social Responsibility; Prof. Tobie Stein, Director, MFA Performing Arts Management, Brooklyn College, The City University of New York; Kelly Kleiman, NFP Consulting and The Nonprofiteer; Scott Harshbarger, Proskauer Rose and former Attorney General of the Commonwealth of Massachusetts; Marnie Berk, New York Lawyers for the Public Interest; Caroline Geiger, Weil Gotshal & Manges; Prof. Brian Glick, Director, Community Economic Development Clinic, Fordham University School of Law; Richard Speizman, KPMG; Prof. Robert Holmes, Director of the Community Law Clinic, Rutgers School of Law; Betsy Vorce, Lincoln Center for the Performing Arts; and Sean Delany, Lawyers Alliance for New York.

My deepest thanks to all for their good counsel.

L.R.

Introduction

America’s one million charities represent a gorgeous array of goodness.

These nonprofits lead our efforts to prevent or cure disease, alleviate poverty and hunger, advance education, address environmental and social concerns, and ennoble through culture.

Our nation’s robust charitable sector includes such powerhouses as the American Red Cross, the Mayo Clinic, the National Council of YMCAs, and major universities, as well as community-based organizations including neighborhood drug-prevention programs, local wildlife refuges, small community theaters and religious and secular charities.

These organizations not only work hard to fulfill their missions; they work hard for our economy as well. As a sector, nonprofits employ over 10 million people, or 7 percent of the U.S. workforce. More people work in nonprofit jobs than in finance, insurance and real estate—combined.1 Charitable nonprofits in America account for some $1.4 trillion in revenues and expenditures annually—more than all the holiday shopping for three strong Christmas seasons a year—making the sector a powerful economic engine as well as a force for the good.2

In addition to jobs created and dollars expended on worthy causes, charities harness the volunteer labor of millions more good-hearted people, carrying out the organizations’ missions through generous contributions of time spent serving, teaching, assisting, visiting, consoling, enlightening, and more. The estimated value of the over eight billion hours a year spent volunteering in the United States is close to $175 billion.

The sector is large and growing—in scope, scale, and complexity, including legal complexity. Every one of these organizations faces legal issues, and yet most do not have regular access to counsel. The purpose of this book is to offer practical and compact guidance about the panoply of issues likely to arise.

Business law issues pertaining to contracts, fundraising, personnel, real estate, operations, intellectual property, financial and other matters are omnipresent across the sector, in organizations small and large; but the issues can be daunting and difficult to navigate. Many nonprofits either lack the acumen to spot legal matters, or they hesitate to address them head-on for fear of untold expense or of opening Pandora’s box. Still others subscribe to commonly held negative views about lawyers and the law and try to avoid dealing with them at all. The unaddressed legal issues may disappear for a while, but they have a way of recurring and mushrooming, and occasionally they result in a spectacular blowup that sends good institutions reeling and causes shockwaves throughout the entire sector.