Nonprofit & religious organizations face special challenges in today's business and legal environment. While some of these legal problems might be the same as those that confront for-profit entities – including questions about real and intellectual property, labor and employment issues and contract matters – others are uniquely characteristic of a nonprofit organization.
From transactional issues to governance and structure matters, from regulatory and land-use issues to joint ventures, from insurance to church-and-state matters, we understand the unique needs of our clients and use our on-point experience to represent them.
Stradley Ronon has a long history of representing tax-exempt organizations, the majority of which we represent under Section 501(c)(3) of the Internal Revenue Code. We have formed many nonprofit organizations, including schools, churches, hospitals, nursing homes, assisted-living facilities, political action committees, donor-advised funds and supporting organizations.
We advise our clients on a variety of issues, including:
- forming nonprofit entities, such as corporations, charitable trusts and limited-liability companies
- preparing and filing applications for federal tax exemption (on Forms 1023 and 1024)
- obtaining determination letters from the Internal Revenue Service
- compliance with IRS requirements, including the revised Form 990
- remaining qualified as tax-exempt by counseling on joint ventures, other affiliations and day-to-day operations
- understanding and applying the rules on lobbying and political activity
- applying for and obtaining sales and real-estate tax exemptions
- obtaining exemptions, minimizations and eliminations for realty transfer tax and unrelated business income
- counseling on tax consequences of alternative investments in hedge funds and real estate
- handling fractions rule applications in debt-financed property
- counseling on the use of advertising
- managing tax audits on the federal, state and local levels
- handling private letter rulings from the Internal Revenue Service and state and city revenue departments on tax consequences
In addition to our work with 501(c)(3) public charities, we represent private foundations and advise them on the self-dealing rules, excess business holdings, taxable expenditures and prohibited grants. In addition, we advise them on how they may qualify to pay a reduced rate of tax on their investment income. Also, we form and work with organizations exempt from federal income tax under other subsections of 501(c) of the Internal Revenue Code, including 501(c)(2) and 501(c)(25) title holding companies, 501(c)(4) social welfare organizations, 501(c)(6) business leagues, 501(c)(14) credit unions and 501(c)(19) veterans organizations.
Stradley Ronon's Tax Practice Group regularly advises clients about the tax and other consequences of charitable gifts, including keeping up with changing IRS rules. We assist organizations with the rules applicable to properly documenting gifts, such as quid pro quo contributions, conservation easements, intellectual property and issuing charitable contribution acknowledgments. We help our clients to comply with special state and local rules that apply when an organization conducts a raffle or other game of chance held for fundraising purposes. We counsel our clients about the registration, exemption and disclosure requirements under state solicitation of funds for charitable purposes laws. We also draft contracts with professional fundraising counsel and professional solicitors to ensure compliance with these laws.
Like all nonprofits, religious organizations must operate in an environment of increasing regulation and scrutiny. However, because of their religious identities, the law places these institutions in a special category where their activities and integrity are protected under the Religion Clauses of the First Amendment and similar provisions of state constitutions. Our attorneys understand and apply that unique body of law in each of these client representations, including:
- handling church tax audits
- interpreting federal statutes, such as the Religious Freedom Restoration Act (RFRA), the Religious Land Use and Institutionalized Persons Act (RLUPA), and state law such as Pennsylvania's Religious Freedom Protection Act (PRFPA)
- structuring tax-exempt bond financing
- advising on qualification for participation in public programs
- defending legitimate autonomy from unreasonable government action in courts and in legislatures around the country
We have also distinguished ourselves through involvement in significant disputes marking the boundaries between church and state, including the U.S. Supreme Court's landmark decisions in Lemon v. Kurtzman and Valley Forge Christian College v. Americans United. In addition, Mark Chopko, chair of our Nonprofit & Religious Organization Practice Group, has considerable experience advising and advocating for religious institutions based on his more than 20 years' service as general counsel to the Roman Catholic Bishops in the United States.
Stradley Ronon recognizes the constitutional limitations placed upon government intrusion, and we work closely with our clients to protect those boundaries appropriately. We have handled everything from collective bargaining agreements to faculty and tenure disputes. We ensure proper participation in government programs of assistance to schools and to parents.
Given that this is an era of ever-increasing regulation and oversight emanating from both governmental and private sources, our attorneys draw expertise from other practice groups and attorneys in the firm, including litigation, labor and employment, real estate and tax. These groups regularly advise clients on issues such as structure and operation of a school, qualification for exemption, development of policies and handbooks, and matters related to litigation.
Our Insurance Practice Group attorneys counsel nonprofit clients in the procurement of coverage and the use of insurance as a business or personal asset. Our lawyers assist with risk management issues, premium financing, negotiation with brokers and agents, and the preparation and review of our clients’ insurance programs.
Employment and Labor
Our Employment and Labor Practice Group attorneys counsel nonprofit institutions in a broad spectrum of labor and employment law matters involving federal, state and local issues. We represent our clients regularly before the Equal Employment Opportunity Commission, state and local agencies, federal and state courts, arbitration panels and the National Labor Relations Board on issues including:
- drug testing
- employee benefits
- employee privacy
- employment contracts and noncompete agreements
- family and medical leave
- personnel policies and procedures
- religious and employment discrimination
- religious exemptions
- union issues
- wage and hour requirements
- wrongful discharge
Our Public Finance Practice Group attorneys regularly represent borrowers, lenders, underwriters and letter of credit providers and serve as bond counsel in connection with tax-exempt bond and note transactions for and on behalf of various types of 501(c)(3) organizations. We have helped universities, hospitals, elementary schools, YMCAs and other nonprofit entities finance their expansion and capital improvement projects and refinance existing debt.
Our Trusts, Estates & Personal Planning Group handles all aspects involving developing charitable-giving programs, from drafting policies and procedures to helping select administrators and investment advisors for planned-giving vehicles. Our lawyers also handle the routine aspects of organizing planned-giving programs, including:
- advising boards of directors on establishing programs
- drafting planned-giving trusts and annuity agreements
- reviewing marketing materials
- providing sample donor documents
- assisting donors with establishing planned gifts
- acting as general counsel to directors of planned-giving programs
We regularly provide advice on the tax-saving devices often used in planned-giving programs, including charitable remainder trusts, charitable lead trusts, gift annuities, pooled-income funds, personal-residence trusts and other trusts allowing the grantor to retain control of assets and minimize taxation.
Our Real Estate Practice Group handles all aspects of real estate transactions for various tax-exempt and religious organizations, including acquiring land and facilities, negotiating and drafting financing documents, grants and tax credits through government agencies, as well as all types of real estate-related contracts. Our lawyers have represented nonprofit institutions before government agencies regarding taxation issues, licenses, zoning, land-planning and tax-exempt issues at local, state and federal levels.
Our Litigation Practice Group regularly litigates antitrust, securities, commercial, civil rights and tort cases, as well as criminal actions and constitutional appeals, including the protection of constitutional rights against government encroachment. The group, comprised of skilled advocates of both trial and appeal procedures, has experience in all courts, including at the state level and with the U. S. Supreme Court.
We have also represented our clients in the preparation of amicus curiae briefs when their interests are implicated in litigation involving other parties. We have tried cases before judges, juries, arbitrators, administrative officers in areas such as:
- conflicts with zoning and taxing authorities
- internal property disputes
- real and threatened schisms
- faculty tenure and promotion
- due process and academic freedom asserted in faculty handbooks
- allegations of employee and volunteer misconduct
Alternative Dispute Resolution
In some cases, when traditional litigation is not the best solution, many clients find that alternative dispute resolution – especially mediation – is a powerful tool in resolving disputes early, cost-effectively and fairly. We are one of the few law firms in the nation to have a designated ADR Practice Group. Notably, The CPR International Institute for Conflict Prevention and Resolution awarded Stradley Ronon's ADR Practice Group its inaugural "Law Firm Award for Excellence in Alternative Dispute Resolution" for our "commitment to principled and creative conflict-management and resolution."
Employee Benefits & ERISA
Our Employee Benefits & ERISA Practice Group deals with the various problems confronting nonprofit and religious institutions, including:
- designing and drafting new plans and amendments
- providing legal advice on administrative issues and regulatory compliance
- securing rulings and opinion letters from the Internal Revenue Service and the Department of Labor concerning plan exemption from ERISA as "church plans"
We also assist many of our tax-exempt clients with highly complex problems associated with Section 403(b) tax-sheltered annuity and custodial account programs, as well as Section 457 deferred compensation plans and pension programs designed exclusively for clergy. Additionally, we have experience with handling the prevention of liability in connection with the operation of such programs.
COMMITMENT TO THE COMMUNITY
Stradley Ronon is committed to giving back to the communities in which we work and live. Through our financial support, volunteer efforts and fundraising, we have helped nonprofit schools, health care institutions and other organizations reach their potential. In addition, many of our attorneys serve on the boards of colleges, universities and health systems, as well as other civic and service organizations.