Syllabus 7
Financial and legal infrastructure for organizations
Building legal infrastructure can build organizational muscle, unlock fundraising capacity, and help you expand your work. There are many options for setting up a nonprofit, bail fund, or mutual aid network, and these guides run you through the pros and cons of various legal structures.
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What can the president currently do?
The good news: in the existing legal order, the president can’t unilaterally revoke tax-exempt status, limit which types of organizations can receive 501(c)3 status, influence IRS determinations, or freeze nonprofit funds. The IRS is required to follow administrative procedure before revoking tax-exempt status, and there will be avenues to appeal. That doesn’t mean that the president can’t send down a flurry of executive orders - but don’t panic, and expect litigation.
What might be changing? What can the IRS do?
Here’s a summary of the changing landscape, information about the historical scope of tax revocation for contravening “public policy,” and information about IRS policy around organizational sponsorship of illegal activities (including direct action protest). The resource includes steps for nonprofits to take to protect themselves.
https://www.icnl.org/evolving-threats-to-the-tax-exempt-status-of-501c3-nonprofits
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Investigations into nonprofits can originate from many arms of the government, but there are defined commonsense steps your organization should take. Pages 34-38 list what your organization should do to harden its defenses against politically-driven investigations - and other bad actors, besides. And if your organization becomes the subject of an inquiry, Pages 24-25 cover what’s voluntary and what requires immediate legal attention.
Before your organization comes under investigation, you need a clear sense of which documents and communications (emails) to preserve, and which can be deleted without concern. Your organization should have a document retention policy that preserves records you’ll need in an audit, insulates you from allegations about improper document destruction, and limits the scope of discovery in legal proceedings. This resource includes a sample document retention policy:
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Avoid making your nonprofit a soft target for audits and state repression.
Here’s a graphic overview of what you should consider:
Here’s a webinar covering steps your organization can take to protect itself:
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501(c)3 organizations are allowed to engage in limited lobbying without losing tax-exempt status, subject to restrictions. This resource explains what activities count as lobbying and covers your legal options for tracking lobbying.
https://nonprofitquarterly.org/advocacy-lobbying-501c3-charitable/
States and localities may have additional restrictions around lobbying. Here are guides for all 50 states and DC:
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Big-picture questions to consider when establishing a bail fund; options for different legal structures. Technical details on implications for fundraising, etc.
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With H.R. 9495 potentially putting nonprofits under siege, compounding existing threats to political organizing, here’s what to consider when navigating creating legal infrastructure. Map threats to movement infrastructure, get pointers on navigating material support for terrorism laws, and know your rights when providing mutual aid. Additional resources are linked at the end of the document.
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“Can we get sued?” is a top question for many mutual aid organizations. Should we incorporate? What are the risks and benefits to different legal structures? are other top questions. This (admittedly dense) guide runs you through the advantages and disadvantages of various legal structures, including LLCs and nonprofit corporations. Here’s also the nuts and bolts of banking under alternative legal models. Includes NY specific information on food exchanges
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If your organization provides support to immigrants, there are steps that you can take to insulate yourself from legal risk. The big one: status agnosticism, or providing aid regardless of immigration status. Here’s a guide to organizational legal risks at different points of intervention:
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