Toolkit · Nonprofit

The Nonprofit Legal Toolkit

26 U.S.C. § 501(c)(3)

Type
Toolkit
Jurisdiction
National
Date
2026-06-16
Topic
Nonprofit

This toolkit is the front door to nonprofit law on UpLaw. It maps the whole terrain in eleven pillars — entity formation and federal exemption under Section 501(c)(3), the public charity versus private foundation divide, the fiduciary duties of nonprofit boards, private inurement and the intermediate-sanctions regime, the lobbying limits and the absolute political-campaign ban, charitable solicitation registration and donor substantiation, unrelated business income tax on earned revenue, restricted gifts and fiscal sponsorship, employment and volunteer compliance, trademark and copyright for mission organizations, and reporting and dissolution. Each pillar gives you plain-English doctrine, the anchor authority in the Internal Revenue Code and state nonprofit corporation law, the traps that catch real organizations, and links into UpLaw's deeper guides and checklists. A running example follows Wrenfield Youth Arts, a fictional volunteer collective that grows into a staffed organization with earned revenue and discovers a new legal problem at every stage. Use it as a research map: skim the landscape, jump to the pillar you need, then follow the links down.

The Nonprofit Legal Toolkit

Nonprofit > Tax-Exempt Organizations | Published 16 June 2026 - Updated 14 July 2026 | UpLaw - uplaw.us

A nonprofit is not a business that forgot to make money. It is a creature of two legal systems at once — state corporate law, which says who controls it, and federal tax law, which says what it may do with what it raises. Almost every serious nonprofit failure is a failure to notice that both systems are watching.

Keywords: nonprofit law, 501(c)(3), Form 1023, public charity, private foundation, public support test, fiduciary duties, private inurement, excess benefit, intermediate sanctions, lobbying, 501(h), campaign ban, charitable solicitation, donor substantiation, UBIT, restricted gifts, fiscal sponsorship, Form 990, dissolution

How to read this toolkit

Nonprofit law is not one subject. It is a stack of eleven, each with its own doctrine, its own governing authority, and its own way of going wrong. State law creates the entity and tells its directors what they owe it. Federal tax law grants the exemption and then polices, in extraordinary detail, how the exempt entity spends, pays, lobbies, earns, and dies. State attorneys general police the charitable assets. Fifty separate registration regimes police the fundraising. Employment, contract, and intellectual property law apply in full — no mission discount.

This toolkit walks that stack pillar by pillar. It is a research map, not a treatise. Each pillar gives you the plain-English rule, the anchor authority, the classic traps, and a link into the UpLaw guide or checklist where the real depth lives. The deep doctrinal treatment sits in Forming and Operating a Nonprofit: A Comprehensive Guide to Tax-Exempt Status; the step-by-step exemption filing lives in Applying for Tax-Exempt Status: A Form 1023 Checklist. Keep both open.

Use this document three ways. Read it end to end once, to build the mental model of how a charitable organization is actually regulated. Jump to a pillar when you have a live question — "can we endorse a candidate?", "is our gift shop taxable?", "can the founder be paid?" — and follow the deep-dive links. Or run the consolidated gated checklist near the end as an annual legal audit.

A running example keeps it concrete. Meet Wrenfield Youth Arts, a fictional organization that begins as six neighbors running free Saturday theater workshops in a church basement, and over four years becomes a staffed nonprofit with a $1.4 million budget, a paid executive director, a foundation grant, a summer camp that charges tuition, a licensed logo on a coffee brand's cause-marketing cups, and — eventually — a decision about whether to wind down. Wrenfield will hit every pillar below, mostly by walking into it.

A word on which law governs what. Federal tax exemption is federal: the Internal Revenue Code, Treasury Regulations, and IRS guidance, uniform across the country. Everything about the entity — incorporation, directors' duties, member rights, merger, dissolution, and attorney-general oversight — is state law, and it varies. There is no national nonprofit corporation statute. Many states draw on the Model Nonprofit Corporation Act (the Revised Model Nonprofit Corporation Act of 1987 and the Model Nonprofit Corporation Act, 3d ed. 2008), but adoption is patchy, and large states such as California and New York have their own elaborate codes. Charitable solicitation registration is likewise state-by-state. Where this toolkit states a rule of entity law, it is teaching the majority or model approach and using representative states as illustrations — confirm your own state's statute before you rely on it.

The nonprofit legal landscape at a glance

The eleven pillars, in the order this toolkit walks them:

  1. Formation and federal exemption — Incorporate under state law, then earn the federal exemption. (26 U.S.C. § 501(c)(3); Treas. Reg. § 1.501(c)(3)-1; § 508(a); Form 1023)
  2. Public charity vs private foundation — The single most consequential classification in the Code. (§ 509(a); §§ 4940–4945)
  3. Governance and fiduciary duty — Care, loyalty, and obedience, enforced by an attorney general rather than shareholders. (State nonprofit corporation acts; Model Nonprofit Corporation Act)
  4. Private inurement, excess benefit, and compensation — Nobody may siphon the charity's value. (§ 501(c)(3); § 4958; § 4960; Treas. Reg. § 53.4958-6)
  5. Lobbying, advocacy, and the campaign ban — Lobbying is limited; electioneering is fatal. (§§ 501(c)(3), 501(h), 4911, 4912, 4955; Rev. Rul. 2007-41)
  6. Fundraising, registration, and substantiation — Register in the states, and paper the gift correctly. (§ 170; § 170(f)(8); § 6115; state charitable solicitation acts)
  7. Earned revenue and UBIT — Charities may run businesses; they just pay tax on the unrelated ones. (§§ 511–514; § 513(i))
  8. Grants, restricted gifts, and fiscal sponsorship — Someone else's money with strings attached. (UPMIFA; § 4945(h); cy pres)
  9. Employment and volunteers — Full employment law, plus a volunteer problem all your own. (FLSA; Title VII; 42 U.S.C. §§ 14501–14505)
  10. Intellectual property and brand — Mission does not license the work. (Lanham Act; Copyright Act; § 513(i))
  11. Reporting, transparency, and dissolution — The Form 990, the public file, and the exit. (§ 6033; § 6104; state dissolution and AG approval)

Pillar 1 — Formation and federal exemption

The doctrine. Nonprofit status and tax exemption are two different things, obtained from two different governments, in that order. First you create an entity under state law — almost always a nonprofit corporation filed with the secretary of state, occasionally a charitable trust or a nonprofit LLC. That step makes the organization a legal person with limited liability and a board; it does not make it tax-exempt. Then you apply to the IRS under 26 U.S.C. § 501(c)(3) for recognition of exemption, typically on Form 1023 (or the streamlined Form 1023-EZ, which is available only to small organizations meeting the eligibility criteria and which invites less scrutiny going in and more risk on audit).

Section 501(c)(3) imposes two tests, spelled out in Treas. Reg. § 1.501(c)(3)-1:

  • The organizational test looks at the paper. Your articles of incorporation must limit the organization's purposes to one or more exempt purposes (charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports, preventing cruelty to children or animals), must not empower it to engage more than insubstantially in non-exempt activities, and must dedicate its assets permanently to charitable purposes on dissolution. A generic state-form purpose clause ("any lawful business") fails this test. So does a missing dissolution clause. These are the two most common reasons a 1023 comes back.
  • The operational test looks at reality. The organization must be operated exclusively — read as primarily — for exempt purposes. The Supreme Court's formulation in Better Business Bureau of Washington, D.C. v. United States, 326 U.S. 279 (1945) still controls: "a single non-educational purpose, if substantial in nature, will destroy the exemption regardless of the number or importance of truly educational purposes."

Two more federal doctrines sit on top. Private benefit (Treas. Reg. § 1.501(c)(3)-1(d)(1)(ii)) forbids serving private interests more than incidentally, even when no insider is involved — the Tax Court applied it to deny exemption to a school training campaign professionals for one political party in American Campaign Academy v. Commissioner, 92 T.C. 1053 (1989). And exemption carries a public policy limit: Bob Jones University v. United States, 461 U.S. 574 (1983) held that an institution whose practices violate fundamental public policy is not "charitable" at all.

Timing matters. Under § 508(a) and Treas. Reg. § 1.508-1(a)(2), if you file Form 1023 within 27 months of the end of the month in which the organization was formed, recognition is retroactive to the date of formation. Miss that window and exemption generally runs only from the filing date — leaving a gap in which contributions may not be deductible.

Wrenfield. The six neighbors run workshops for two years with no entity at all — an unincorporated association, meaning every volunteer is personally exposed on the lease and the liability. They incorporate as a nonprofit corporation, adopt bylaws, elect a five-person board, get an EIN, and file Form 1023 within the 27-month window. Their first draft of the articles copies a for-profit template and omits the dissolution clause. The IRS asks. They amend. Cost: four months.

Traps. Federal exemption does not give you state income tax exemption, state sales tax exemption, or property tax exemption — those are separate applications under separate state statutes, and property tax exemption in particular is frequently contested. Do not assume "we're a 501(c)(3)" answers a county assessor. Also: exemption under § 501(c)(3) is not the only kind. A 501(c)(4) social welfare organization may lobby without limit and engage in some political activity, but contributions to it are not deductible; a 501(c)(6) is a trade association; a 501(c)(7) is a social club. Pick deliberately.

Deep dives. Forming and Operating a Nonprofit: A Comprehensive Guide to Tax-Exempt Status and Applying for Tax-Exempt Status: A Form 1023 Checklist. The mechanics of standing up any entity — filings, EIN, bylaws, minute book, registered agent — are the same as for a for-profit; borrow from Incorporating a Startup the Right Way: A Founder's Legal Checklist and The Small Business Legal Toolkit. For the entity-choice analysis in tax terms generally, see Business Taxation: A Comprehensive Guide to Entity Choice and Federal Income Tax and Choosing a Tax Entity: A Practical Checklist.

Pillar 2 — Public charity vs private foundation

The doctrine. Here is the rule that surprises everyone: under § 508(b), every § 501(c)(3) organization is presumed to be a private foundation unless it demonstrates otherwise. Private foundation status is the default, not the exception, and it is a heavier regime. To escape it, the organization must fit one of the categories in § 509(a):

Route What it covers Core test
§ 509(a)(1) Churches, schools, hospitals, governmental units, and publicly supported organizations (via § 170(b)(1)(A)) Generally, at least 1/3 public support over a 5-year measuring period; or 10% plus favorable facts and circumstances
§ 509(a)(2) Organizations funded largely by exempt-function revenue — program fees, ticket sales, tuition 1/3 support from gifts, grants, and related program receipts; and not more than 1/3 from investment income and net UBI
§ 509(a)(3) Supporting organizations attached to a public charity Organized and operated exclusively to support a specified public charity; Type I, II, or III, with escalating restrictions
§ 509(a)(4) Public safety testing organizations Narrow

Public support is computed on Schedule A of the Form 990 and is a live number, not a status. Organizations drift into private foundation status by accident — most often when one wealthy donor's gift swamps the denominator. Large gifts from any one person are counted only up to 2% of total support in the § 170(b)(1)(A)(vi) test, so a single transformative gift can shrink the measured public support fraction rather than help it.

Why it matters. A private foundation lives under Chapter 42's excise taxes: § 4940 (tax on net investment income), § 4941 (self-dealing — a flat prohibition on nearly all transactions between the foundation and its disqualified persons, including transactions that are good for the foundation), § 4942 (mandatory annual distribution, generally 5% of non-charitable-use assets), § 4943 (excess business holdings), § 4944 (jeopardizing investments), and § 4945 (taxable expenditures — including lobbying, grants to individuals without advance approval, and grants to non-public charities without expenditure responsibility under § 4945(h)). Deduction limits for donors are lower, and the Form 990-PF is public in full.

Wrenfield. In year three a local family foundation offers a $600,000 grant against a $1.4 million budget. Wrenfield's accountant runs Schedule A and finds that under the § 170(b)(1)(A)(vi) test, the gift counts only to 2% of total support — and it would push the ratio below one third. The fix is not to refuse the money. It is to (a) check whether the grantor is itself a public charity or governmental unit, whose grants are not subject to the 2% cap if they qualify as public support, (b) run the alternative § 509(a)(2) test, under which the growing summer-camp tuition counts as public support, and (c) consider the 10%-plus-facts-and-circumstances route. Wrenfield lands under § 509(a)(2), because tuition is exempt-function income. It also starts, deliberately, to broaden its small-donor base — because public support is a ratio, and the only durable defense is a real denominator.

Traps. Support fractions are computed on a rolling five-year window, so a bad year does not kill you immediately — but two consecutive failures do. Donor-advised funds and supporting organizations carry their own layered rules (§ 4966, § 4967, § 4943(f)). And a private foundation cannot fix a self-dealing problem by paying fair market value; § 4941 is a per se rule.

Pillar 3 — Governance and the fiduciary duties of nonprofit directors

The doctrine. Nonprofit governance is state corporate law, not tax law, and it looks a great deal like for-profit governance with the shareholders removed. Directors owe:

  • Duty of care — act in good faith, with the care an ordinarily prudent person would use in like circumstances, and in a manner reasonably believed to be in the organization's best interests. Most states apply a business judgment rule to nonprofit boards, protecting informed, disinterested, good-faith decisions from second-guessing.
  • Duty of loyalty — no self-dealing, no usurping the organization's opportunities, disclose conflicts, and recuse. Conflict-of-interest transactions are typically validated only if disclosed and approved by disinterested directors on fair terms.
  • Duty of obedience — a duty with no clean for-profit analogue: adhere to the organization's stated mission and to the restrictions donors imposed. Charitable assets are held for charitable purposes, and the board is not free to redirect them.

The enforcement structure is what makes nonprofits different. There are no shareholders to sue. In most states the attorney general is the principal enforcer of charitable assets, with standing to sue directors, void transactions, and block dissolutions, mergers, and asset sales. Directors of a membership corporation may also face suit by members. Donor standing to enforce a gift is limited and state-specific — some states and the Uniform Trust Code (§ 405(c)) allow the settlor of a charitable trust to enforce it, but a check written to a charity generally does not make the donor a plaintiff.

Whose corporate law? There is no federal law of fiduciary duty, and no national nonprofit corporation statute — this is state law, entity by entity, and the answer depends on the state of incorporation. Two reference points matter, and they are not the same one. For the content of the duties — what care requires, how the business judgment rule operates, when a conflicted transaction is cleansed — Delaware is the reference point that American corporate law actually argues from, and the UpLaw treatment of the duties is built on Delaware doctrine. Nonprofit courts and commentators borrow that vocabulary freely. But Delaware is a for-profit reference point being borrowed by analogy: relatively few charities are Delaware nonstock corporations, Delaware's nonprofit case law is thin, and the duty of obedience and attorney-general enforcement have no Delaware for-profit analogue at all. So: reason from Delaware for the shape of the duties, and from your own state's nonprofit corporation act for what is actually binding on your board.

State variation is real and worth naming. New York's Nonprofit Revitalization Act of 2013 layered on mandatory conflict-of-interest and whistleblower policies and independent-director requirements for audit oversight (N-PCL §§ 715, 715-a). California's Nonprofit Integrity Act of 2004 requires audited financials and an audit committee above a revenue threshold and regulates compensation approval. Many other states borrow the Revised Model Nonprofit Corporation Act's more permissive defaults. None of this is nationwide. Read your own statute.

Federal tax law does not directly mandate governance, but it asks: Form 990, Part VI, inquires about conflict-of-interest, whistleblower, and document-retention policies, whether the 990 was reviewed by the board, and how executive compensation was set. Those answers are public, and a "no" is an audit invitation.

Wrenfield. Two of the five founding board members are also the two paid teaching artists. That is not automatically unlawful, but it is a loyalty problem, a public-support optics problem, and — once compensation grows — an excess-benefit problem (Pillar 4). Wrenfield adopts a written conflict-of-interest policy on the IRS's model, expands the board to nine with a majority of independent directors, moves compensation decisions to a committee of the disinterested, and starts keeping real minutes.

Deep dives. The duties, the business judgment rule, and the Delaware reference points are treated in full in Corporate Governance and Fiduciary Duties: A Comprehensive Guide for Directors and Officers — read it with the shareholders swapped out for the attorney general, and with Delaware understood as the analogy rather than the governing law. The mechanics of doing it right are in Board Governance, Minutes, and Corporate Formalities: A Practical Checklist. For D&O and general liability coverage — which nonprofit boards routinely under-buy — see The Business Insurance and Coverage Toolkit and Insurance Coverage Law: A Comprehensive Guide for Policyholders. Note that insurance is regulated almost entirely at the state level: policy forms, the duty to defend, the notice-prejudice rule, and bad-faith remedies are creatures of state law and differ materially from state to state. There is no national law of coverage, and a D&O policy that behaves one way in one state may behave differently in another. Read the policy, then read your state's cases on it.

Pillar 4 — Private inurement, excess benefit, and executive compensation

The doctrine. Section 501(c)(3) says that "no part of the net earnings" of the organization may "inure to the benefit of any private shareholder or individual." Private inurement is an absolute prohibition aimed at insiders, and its sanction is nuclear: revocation of exemption. Because revocation punishes the charity's beneficiaries rather than the wrongdoer, Congress added a scalpel.

Section 4958 — intermediate sanctions. If an applicable tax-exempt organization (a public charity or a § 501(c)(4)) provides an economic benefit to a disqualified person — someone in a position to exercise substantial influence, plus family and controlled entities — that exceeds the value of what the organization gets back, the excess is an excess benefit transaction. The taxes fall on the people, not the charity:

  • 25% of the excess benefit on the disqualified person;
  • 200% if not corrected within the taxable period;
  • 10% on any organization manager who knowingly participated, capped per transaction.

The rebuttable presumption of reasonableness. Under Treas. Reg. § 53.4958-6, a compensation arrangement is presumed reasonable if three things happen before the deal is done: (1) it is approved in advance by an authorized body of independent persons with no conflict of interest; (2) the body relied on appropriate comparability data — comparable positions at similarly situated organizations, compensation surveys, actual written offers; and (3) it contemporaneously documented the basis for its determination in the minutes. This is the single most valuable procedural device in nonprofit law, and it costs almost nothing to obtain. Get it every time.

Note the boundary lines. Private foundations do not use § 4958 — they use § 4941 self-dealing, which is stricter and does not care about fairness. And § 4960 imposes a 21% excise tax on remuneration over $1 million paid to a covered employee, plus excess parachute payments.

Reasonable compensation is not "no compensation." Founders may be paid, and paid well, for real work at market rates. What kills organizations is process: no comparables, no independent approval, no minutes, and a loan to the executive director that nobody documented.

Wrenfield. The founder becomes the paid executive director at $110,000. The board — the independent members — pulls three compensation surveys for arts organizations of similar budget and region, discusses them, votes, and writes down why. That memo, in the minutes, is worth more than any opinion letter. Wrenfield also refuses to make the ED a short-term "bridge loan" for a home purchase. Loans to insiders are excess-benefit landmines and, in a few states, flatly prohibited by the nonprofit corporation act.

Pillar 5 — Lobbying, advocacy, and the political-campaign ban

The doctrine. These are two different rules and conflating them is the most expensive mistake in the field.

Lobbying is limited, not banned. A § 501(c)(3) may not have lobbying as a "substantial part" of its activities. What counts as substantial under the default test is famously vague — it is a facts-and-circumstances inquiry weighing time, money, and prominence, with no safe harbor. The escape is the § 501(h) expenditure election, made on Form 5768, which replaces the fog with arithmetic: lobbying expenditures are capped on a sliding scale keyed to exempt-purpose expenditures (starting at 20% of the first $500,000, stepping down, with an overall ceiling of $1,000,000), and grassroots lobbying — appeals to the public to contact legislators — is capped at 25% of the total lobbying limit. Section 4911 defines the terms and imposes a 25% excise tax on excess lobbying expenditures; only persistent, substantial excess costs the exemption. Sections 4911–4912 and Treas. Reg. § 56.4911-2 also carve out safe activities: nonpartisan analysis, study, or research; technical advice furnished in response to a written request from a governmental body; and self-defense lobbying on legislation affecting the organization's own existence, powers, or tax-exempt status.

For most charities that do any advocacy at all, taking the 501(h) election is a clear win: it converts an unmeasurable standard into a number, and it excludes volunteer lobbying time and unpaid effort from the count. Private foundations may not make the election — lobbying by a private foundation is a taxable expenditure under § 4945.

Political campaign intervention is absolutely prohibited. Section 501(c)(3) bars participating or intervening in "any political campaign on behalf of (or in opposition to) any candidate for public office." There is no substantiality threshold, no de minimis exception, and no dollar amount that is safe. The sanctions are revocation and an excise tax on political expenditures under § 4955. Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000), upheld the IRS's revocation of a church's exemption after it ran a newspaper advertisement opposing a presidential candidate — and rejected the First Amendment and RFRA defenses.

The line between education and electioneering is drawn by facts and circumstances. Rev. Rul. 2007-41 is the working guide: voter registration and get-out-the-vote drives are fine if genuinely nonpartisan; candidate questionnaires and voter guides are fine if they cover a broad range of issues, treat candidates evenhandedly, and do not compare answers to the organization's positions; a candidate may speak at an event if all candidates get an equivalent invitation and no endorsement is expressed; and issue advocacy near an election is scrutinized for timing, targeting, and whether it identifies a candidate's position. Leaders may endorse personally, on their own time, without using the organization's name, funds, letterhead, mailing list, or website.

Organizations that want a bigger political footprint build an affiliated structure: a § 501(c)(3) for charitable and educational work, a § 501(c)(4) for unlimited lobbying and some political activity, and a § 527 political organization for the electoral work — each separately incorporated, separately governed, with a cost-sharing agreement and scrupulous accounting so that no charitable dollar funds electioneering. The structural logic is the same one used in commercial group structures; see Running Multiple Businesses Under One Structure: A Deep Dive into Holding, Operating, and Parent Companies for the separation discipline (separate books, separate boards, real agreements) that keeps affiliates from being collapsed into one another.

Wrenfield. The state legislature is debating arts-education funding. Wrenfield files the § 501(h) election, budgets a defined lobbying line, testifies by invitation of a legislative committee (a technical-advice safe harbor), and publishes a nonpartisan analysis of the bill. It declines to print "Vote for Councilmember Ruiz, who supports us" in its newsletter — even though Ruiz genuinely does — because that sentence would put the exemption at risk. Wrenfield's board chair endorses Ruiz on her personal social media, on her own account, with no reference to Wrenfield.

Pillar 6 — Fundraising, charitable solicitation registration, and donor substantiation

Registration is state law, and it is a fifty-front problem. Roughly forty states plus the District of Columbia require a charity to register before soliciting contributions from their residents, file annual financial reports, and register their professional fundraisers and fundraising counsel. Requirements diverge on thresholds, audit requirements, fees, and renewal dates. Some states accept a common form; many now run their own portals. There is no federal charitable solicitation statute.

The hardest modern question is when a website solicits. The prevailing (non-binding but widely followed) framework is the Charleston Principles, adopted by the National Association of State Charity Officials in 2001: a passive website that merely accepts a gift from an out-of-state donor is treated differently from one that specifically targets a state's residents or repeatedly and substantially receives contributions from them. Practical translation: a national "Donate" button plus an email campaign aimed at a state's residents plus recurring gifts from that state means you should register there.

The First Amendment sets outer limits on how far states may go. Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620 (1980), Secretary of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947 (1984), and Riley v. National Federation of the Blind of North Carolina, 487 U.S. 781 (1988) together hold that states may not condition solicitation on a percentage of funds going to program rather than fundraising costs — charitable solicitation is protected speech. But Illinois ex rel. Madigan v. Telemarketing Associates, 538 U.S. 600 (2003) holds that states may bring fraud actions against fundraisers who affirmatively misrepresent how funds will be used. And Americans for Prosperity Foundation v. Bonta, 594 U.S. 595 (2021) struck down California's blanket demand for Schedule B donor names as facially unconstitutional under exacting scrutiny — donor privacy is a live constitutional interest.

Substantiation is federal, and it is unforgiving. Section 170 gives the donor the deduction, but only on the charity's paperwork:

  • § 170(f)(8) — for any gift of $250 or more, the donor must have a contemporaneous written acknowledgment from the charity stating the amount of cash and describing any non-cash property, and stating whether the charity provided any goods or services in return and, if so, a good-faith estimate of their value. "Contemporaneous" means obtained by the earlier of the filing date or the due date of the return. Courts have denied seven-figure deductions over a missing sentence. The magic language when nothing was given back: "No goods or services were provided in exchange for this contribution."
  • § 6115 — for a quid pro quo payment over $75 (a gala ticket, a benefit auction, a membership with perks), the charity must give a written statement informing the donor that the deductible amount is limited to the excess over the value of what they received, and providing a good-faith estimate of that value.
  • § 170(f)(11) — non-cash gifts over $5,000 generally require a qualified appraisal and a Form 8283 signed by the appraiser and the donee. If the charity disposes of the property within three years, it files Form 8282. Donated vehicles have their own regime (§ 170(f)(12); Form 1098-C).
  • Deduction ceilings differ by gift and recipient: cash to public charities is deductible up to a higher percentage of AGI than long-term capital gain property, and gifts to private foundations are more limited still. Never advise a donor on their own return — but never let them be surprised by your receipt, either.

Wrenfield. Its spring gala sells $150 tickets against a $60 dinner; every ticket receipt must state the $60 estimate under § 6115. A donor gives a $30,000 grand piano; Wrenfield does not value it (that is the donor's job, via a qualified appraiser) but does sign Part IV of the Form 8283 and calendars a three-year Form 8282 tripwire in case it sells the piano. And because Wrenfield's donation page reaches donors in a dozen states and its email appeals target three of them, it registers in those states before the campaign, not after.

Deep dives. Fundraising is marketing, and the marketing rules apply in full: see The Advertising and Marketing Law Toolkit for truth-in-advertising and endorsement rules that apply to charitable appeals, and CAN-SPAM Compliance for Commercial Email: A Practical Checklist — donor email is not automatically outside CAN-SPAM, because the statute turns on whether the primary purpose of the message is commercial, and a fundraising email pushing merchandise or event tickets can cross the line. Donor data is regulated data: run it through The Privacy and Data Protection Toolkit: Building and Operating a Compliance Program and post a real policy using Drafting a Privacy Policy: A Practical Checklist. Planned-giving conversations — bequests, charitable remainder trusts, beneficiary designations — belong to The Estate Planning and Wealth Transfer Toolkit and Wills, Trusts, and Probate: A Comprehensive Estate Planning Guide.

Pillar 7 — Earned revenue and UBIT

The doctrine. Charities may run businesses. They simply pay corporate income tax on the income from businesses that are not related to the mission — the unrelated business income tax, §§ 511–514, reported on Form 990-T. Three elements must all be present for income to be taxable:

  1. It is a trade or business (an activity carried on for the production of income from selling goods or performing services);
  2. It is regularly carried on (with the frequency and continuity of a comparable commercial activity — an annual weekend bake sale usually is not; a year-round shop is); and
  3. It is not substantially related to the exempt purpose — meaning the activity itself, apart from producing money, does not contribute importantly to accomplishing the mission. Needing the money is never a relationship.

Two Supreme Court decisions frame the inquiry. United States v. American College of Physicians, 475 U.S. 834 (1986) held that advertising revenue in a medical society's journal was unrelated business income — the ads were not shown to contribute importantly to the educational mission. United States v. American Bar Endowment, 477 U.S. 105 (1986) treated a group insurance program run for members as an unrelated business.

Then come the exceptions and modifications, which do most of the real work:

  • § 513(a)(1) volunteer labor — a business in which substantially all the work is performed without compensation is not an unrelated trade or business. (This is why the volunteer-run thrift shop is untaxed and the staffed one may not be.)
  • § 513(a)(2) convenience exception — a business carried on for the convenience of members, students, patients, officers, or employees (the hospital cafeteria, the campus bookstore).
  • § 513(a)(3) donated merchandise — selling goods substantially all of which were received as gifts.
  • § 513(i) qualified sponsorship payments — a sponsor's payment is not taxable where the sponsor gets only an acknowledgment: name, logo, locations, value-neutral descriptions, product displays. It becomes advertising — and taxable — the moment you add qualitative or comparative language, price information, or a call to action. "Brought to you by Kestrel Coffee" is fine. "Kestrel Coffee — the smoothest roast in the city, $2 off with this program" is advertising.
  • § 512(b) modifications — passive income is generally excluded: dividends, interest, royalties, and rents from real property. But § 514 pulls debt-financed income back into tax, and the royalty exclusion evaporates if the organization is really providing services rather than licensing a name. Sierra Club v. Commissioner, 86 F.3d 1526 (9th Cir. 1996), held that affinity credit card payments were excludable royalties where the organization licensed its name and mailing list without substantial services.
  • § 512(a)(6) siloing — since the 2017 Act, an organization with more than one unrelated trade or business must compute UBTI separately for each, so a loss in one silo cannot shelter income in another. There is a $1,000 specific deduction and no more.

The looming background rule is that a charity whose commercial activity becomes primary does not merely pay tax — it loses the exemption under the operational test. That is the commerciality limit, and it is what turns a UBIT question into an existential one.

Wrenfield. Three revenue streams, three answers. Summer camp tuition: substantially related — teaching youth theater is the mission — so no UBIT, and it counts as exempt-function income for the § 509(a)(2) public support test. The lobby café, open to the public year-round with paid baristas: a regularly carried on trade or business, not substantially related, and the volunteer and convenience exceptions do not fit. Taxable; file the 990-T. The Kestrel Coffee sponsorship of the fall production: structured as a plain acknowledgment on the program and a logo on the banner, it is a qualified sponsorship payment under § 513(i) — until the marketing team offers to add "voted best latte in the county," at which point it becomes advertising. Counsel strikes the line.

Deep dives. The Business Tax Toolkit maps federal tax generally, and if the IRS comes calling, Handling an IRS Audit and Tax Controversy: A Comprehensive Guide is the procedural map. Note that federal tax is federal — the UBIT analysis is the same in every state, though many states impose their own tax on unrelated business income and may condition sales-tax exemption on it.

Pillar 8 — Grants, restricted gifts, and fiscal sponsorship

The doctrine. Restricted money is a contract, a trust, and a fiduciary obligation at once, and the board's duty of obedience runs straight through it.

Donor-restricted gifts. When a donor imposes a purpose restriction ("for the scholarship fund") or a time restriction, the charity must honor it. It cannot simply reallocate the money when priorities change. To be released from a restriction, the organization generally needs the donor's written consent, or relief from a court or (in many states) the attorney general. The equitable doctrines are cy pres — where the specific purpose has become impossible, impracticable, wasteful, or illegal, a court may redirect the gift to a purpose as near as possible to the donor's intent (Restatement (Third) of Trusts § 67; Uniform Trust Code § 413) — and deviation, which changes administrative terms rather than purpose.

Endowments. Nearly every state has adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which governs how institutional funds are invested and spent. UPMIFA replaced the old "historic dollar value" floor with a prudence standard: the institution may spend from an endowment fund as is prudent for its uses, purposes, and duration, weighing enumerated factors (duration and preservation of the fund, purposes, general economic conditions, effects of inflation, expected return, other resources, investment policy). Several states add a rebuttable presumption of imprudence above a stated spending rate. UPMIFA also provides a small-fund, old-fund release mechanism with notice to the attorney general. Because adoption details vary, check your state's version.

Grant agreements. A foundation grant is a contract with reporting, budget, and reversion terms. Read it like a contract, because it is one: scope of the funded work, allowable costs, payment milestones, reporting and audit rights, publicity and logo rights, unspent-funds reversion, termination. Federal awards add the Uniform Guidance (2 C.F.R. Part 200) — cost principles, procurement standards, and a Single Audit obligation once federal expenditures exceed the applicable threshold (the threshold was raised in the 2024 revisions; confirm the current figure before assuming you are under it). Private foundation grants to anything other than a public charity require expenditure responsibility under § 4945(h): pre-grant inquiry, a written agreement, segregated funds, reports, and reporting on the 990-PF.

Fiscal sponsorship. A young project that has no exemption yet — or never wants one — can operate under an established charity's exemption. Two structures dominate. In Model A (comprehensive), the project is inside the sponsor: the sponsor employs the staff, owns the assets and the intellectual property, signs the contracts, and bears the liability, and the project runs as a restricted fund under the sponsor's board. In Model C (pre-approved grant relationship), the project stays a separate legal entity and the sponsor re-grants restricted funds to it, retaining discretion and control. The one thing both models require is variance power — the sponsor's genuine legal discretion to redirect the funds to its own charitable purposes if the project fails. Without it, the sponsor is merely a conduit, the donors' deductions are at risk, and the sponsor's exemption is exposed.

Wrenfield. In year one, before it has its determination letter, Wrenfield operates as a Model A project of a community foundation, which employs its one part-time teacher and holds the grant. That is why the volunteers are not personally on the hook for the lease. After exemption, Wrenfield exits the sponsorship with a written transfer agreement covering funds, records, and — importantly — the name and logo (see Pillar 10; a sponsor that owns the IP and does not assign it can strand a project). Later, a donor gives $250,000 "to endow a scholarship for students from the Wrenfield neighborhood." When the neighborhood is rezoned and the school closes, Wrenfield cannot quietly move the money to general operations. It goes to the attorney general for a cy pres modification.

Deep dives. Grant agreements, MOUs, and sponsorship contracts are commercial contracts; work them with The Commercial Contracts Toolkit: Drafting, Reviewing, and Enforcing Business Agreements, and understand what a breach is worth via Contract Damages: How Courts Make the Injured Party Whole.

Pillar 9 — Employment, volunteers, and workplace compliance

The doctrine. There is no charitable exception to employment law. If you have employees, you owe minimum wage and overtime under the FLSA; you withhold and remit payroll taxes; you comply with Title VII (15+ employees), the ADA, the ADEA (20+), the FMLA (50+), OSHA, and a thick layer of state law. A § 501(c)(3) is exempt from FUTA under 26 U.S.C. § 3306(c)(8) and may often elect to reimburse its state unemployment system rather than pay contributions — but it still owes FICA, and it is still an employer for every other purpose.

The genuinely nonprofit-specific problem is volunteers. A true volunteer — someone who donates services for civic, charitable, or humanitarian reasons, without promise or expectation of compensation — is not an employee. But the label does not control the analysis. Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (1985) held that workers at a religious foundation's commercial businesses were employees under the FLSA even though they disclaimed any expectation of wages, because they depended on the foundation for food, shelter, and clothing — in-kind compensation is compensation. The bright-line trap that catches real organizations: an employee may not "volunteer" to perform the same type of work they are paid to do. The receptionist who staffs the gala check-in desk on a Saturday is working, and the hours are compensable.

The Volunteer Protection Act of 1997, 42 U.S.C. §§ 14501–14505, preempts state law to immunize volunteers of nonprofits and governmental entities from liability for harm caused by ordinary negligence within the scope of their responsibilities (with carve-outs for willful, criminal, and reckless misconduct, and for operating a vehicle). Read the limit carefully: it protects the volunteer, not the organization, which remains vicariously liable. Insurance, not the VPA, is the organization's protection.

Two more that bite. Interns are analyzed under the DOL's primary-beneficiary test; an unpaid intern who is really doing the work of a staff position is an employee. And religious employers have a constitutional carve-out: the ministerial exception bars employment-discrimination claims by employees who perform vital religious duties — Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, 565 U.S. 171 (2012), broadened in Our Lady of Guadalupe School v. Morrissey-Berru, 591 U.S. 732 (2020) — a doctrine that turns on function, not job title.

Wrenfield. Hiring its first three employees, Wrenfield discovers that its teaching artists have been paid as 1099 contractors while being scheduled, supervised, trained, and given curricula — a classification that will not survive an audit. It reclassifies them as employees. It writes a handbook. It stops letting its paid box-office manager "volunteer" at the gala box office. And it buys D&O and general liability coverage, because the Volunteer Protection Act protects its volunteers and no one else.

Deep dives. The Employment Law Toolkit: From Hiring to Separation is the front door. On the classification problem, see Worker Classification: A Comprehensive Guide to Employee and Independent Contractor Status and Classifying Workers: Employee or Independent Contractor — A Practical Checklist. Build the handbook with Building a Legally Sound Employee Handbook and Drafting an Employee Handbook That Holds Up: A Practical Checklist. For discrimination exposure, Employment Discrimination Law: A Comprehensive Guide.

Pillar 10 — Intellectual property and brand for mission organizations

The doctrine. Nonprofits are full participants in the IP system, on both sides. A charity's name and logo are its most valuable non-cash asset and its most commonly neglected one. Reserving a corporate name with the secretary of state and registering to solicit in a state give you no trademark rights. Rights come from use in commerce and are secured by federal registration under the Lanham Act — and "commerce" includes the services a charity renders. Clear the name before you print the banners, and register it.

On the input side, there is no nonprofit exemption from copyright. Section 107's first fair-use factor considers whether the use is "of a commercial nature or is for nonprofit educational purposes," but that is one thumb on one scale, not a license. A charity that puts a licensed photograph on its annual report, plays a copyrighted song at its gala, or reproduces a news article in its newsletter is infringing unless it has a license or a defense. Nonprofit performances have a narrow statutory carve-out under 17 U.S.C. § 110(4) for certain live, non-transmitted performances with no commercial advantage and either no admission charge or proceeds used exclusively for educational, religious, or charitable purposes — but its conditions are strict and it does not cover recorded music at a ticketed fundraiser as most people assume.

Where nonprofit IP gets distinctively tricky is at the intersection with tax. Licensing the charity's name and logo to a company — cause marketing, affinity credit cards, "a portion of proceeds benefits Wrenfield" — generates income that is excluded from UBIT as a royalty under § 512(b)(2) only if the charity is genuinely licensing a name and not performing services (Sierra Club, above). Bolt on staff time, endorsements, promotional obligations, and event appearances, and the payment starts to look like compensation for services and slides into UBIT. Structure it deliberately: a licensing agreement with quality-control provisions (which trademark law requires anyway, on pain of naked-license abandonment) and, where services are truly provided, a separate, separately priced services agreement. And note that several states — Massachusetts and California among them — regulate commercial co-ventures and require the company, the charity, or both to register, bond, and contract in writing before running a "portion of proceeds" campaign.

Wrenfield. Its logo has been used for four years with no clearance search. A regional dance company with a similar name and an earlier registration sends a demand letter. Wrenfield rebrands — at real cost — and this time clears and registers the mark. Its Kestrel Coffee cause-marketing deal is papered as a trademark license with quality control and a fixed royalty, kept clean of service obligations so the royalty exclusion holds, and registered as a commercial co-venture in the two states that require it.

Deep dives. Trademark Fundamentals: A Plain-English Primer and From Brand Idea to Registered Mark: A Trademark Registration Toolkit cover clearance through registration. The Copyright Law Toolkit: A Complete Resource Library covers ownership, licensing, and fair use — including the work-made-for-hire problem that arises every time a volunteer designer hands you a logo without an assignment. When you paper the cause-marketing deal, the license is the whole game: see Intellectual Property Licensing: A Comprehensive Guide to Structuring and Negotiating License Agreements for scope, field of use, royalty structure, and termination, and work the clauses with Drafting a Trademark License Agreement: A Practical Checklist — the quality-control provisions it walks you through are the same ones that keep the § 512(b)(2) royalty exclusion intact. For the website, the donation page, and the accessibility obligations that come with them, see The Website and Internet Law Toolkit.

Pillar 11 — Reporting, transparency, and dissolution

Annual reporting. Section 6033 requires most exempt organizations to file an annual information return: Form 990 (larger organizations), Form 990-EZ, the electronic Form 990-N postcard (very small organizations under the gross-receipts threshold), or Form 990-PF (private foundations, regardless of size). Add Form 990-T if you have unrelated business income. The hard deadline behind all of them is § 6033(j): three consecutive years of failure to file triggers automatic revocation of exemption, with no discretion and no notice required. Reinstatement means re-applying. This is the most common way small nonprofits die, and it is entirely preventable.

Public disclosure. Section 6104(d) makes the Form 990 and the exemption application (Form 1023 and the determination letter) publicly inspectable — the organization must provide copies on request, and posting them conspicuously online satisfies the obligation. Schedule B donor names are generally redacted from the public copy for § 501(c)(3) organizations other than private foundations. Add state annual charitable reports (California's RRF-1, New York's CHAR500, and their analogues) and, above thresholds, audited financial statements.

Dissolution. Winding down a charity is not like winding down a company, because the assets are not the founders' to keep. Federal law requires the dissolution clause (Treas. Reg. § 1.501(c)(3)-1(b)(4)): on dissolution, remaining assets must be distributed for exempt purposes — to another § 501(c)(3), or to a government for a public purpose. State law supplies the process, and it is exacting: board approval, member approval where there are members, a written plan of dissolution and distribution of assets, creditor notice, and — in many states, including California and New York — notice to or approval by the attorney general or a court before assets move. The same AG oversight typically attaches to a merger with another nonprofit or a sale of substantially all assets, which is why nonprofit combinations look like M&A with a regulator in the room. File the final Form 990 with Schedule N and check the terminated box; § 6043(b) requires the report of liquidation.

Wrenfield. Six years in, a larger arts organization proposes a merger. Wrenfield's board runs the fiduciary analysis, gives the attorney general the notice its state requires, verifies that the restricted scholarship fund's purpose travels with the assets, and files the final return with Schedule N. Nobody takes a distribution. That is the whole point of a charity.

Deep dives. Nonprofit combinations borrow the process discipline of The Mergers and Acquisitions Toolkit and Mergers and Acquisitions: A Comprehensive Guide from Letter of Intent to Closing — letter of intent, diligence, disclosure schedules, representations, and closing mechanics — with charitable-asset review and attorney-general clearance layered on top. Run the target's exemption, its restricted funds, and its 990 history through Conducting Merger and Acquisition Due Diligence: A Practical Checklist; in a charity deal, an undisclosed donor restriction or a lapsed exemption is the equivalent of an undisclosed lien.

The landscape as a working checklist

Run this annually. A "no" anywhere is a project.

Formation and exemption

  • [ ] Articles contain a compliant purpose clause and an irrevocable dissolution clause (Treas. Reg. § 1.501(c)(3)-1(b)(4)).
  • [ ] Form 1023 or 1023-EZ filed within 27 months of formation; determination letter on file and findable.
  • [ ] State income, sales, and property tax exemptions applied for separately — federal exemption does not confer them.
  • [ ] Corporate registrations, registered agent, and annual reports current in every state of operation.

Classification

  • [ ] Public support fraction computed on Schedule A this year; five-year trend reviewed by the board.
  • [ ] Any single gift exceeding 2% of total support flagged and modeled before acceptance.
  • [ ] If a private foundation: § 4942 5% distribution met; no § 4941 self-dealing; expenditure responsibility on non-public-charity grants.

Governance

  • [ ] Written conflict-of-interest policy, signed annual disclosures, recusal actually documented in minutes.
  • [ ] Majority-independent board; compensation set by disinterested directors.
  • [ ] Minutes taken and approved for every meeting; bylaws followed as written.
  • [ ] Whistleblower and document-retention policies adopted (Form 990, Part VI asks).
  • [ ] D&O insurance in force and adequate.

Insiders and compensation

  • [ ] Rebuttable-presumption process run for every executive's compensation: independent body, comparability data, contemporaneous documentation (Treas. Reg. § 53.4958-6).
  • [ ] No loans to officers or directors.
  • [ ] Related-party transactions disclosed on Schedule L and approved on fair terms.

Advocacy

  • [ ] § 501(h) election filed (Form 5768) if the organization lobbies at all; lobbying expenditures tracked against the § 4911 ceiling.
  • [ ] Zero candidate endorsements, contributions, or in-kind support — no exceptions, no de minimis.
  • [ ] Voter guides, candidate forums, and issue advocacy tested against Rev. Rul. 2007-41 before publication.
  • [ ] Any § 501(c)(4) or § 527 affiliate separately incorporated, separately governed, with a written cost-sharing agreement.

Fundraising

  • [ ] Registered to solicit in every state where required, including states reached by online and email appeals (Charleston Principles).
  • [ ] Professional fundraisers and fundraising counsel under written contract and registered where required.
  • [ ] Every gift of $250+ acknowledged with compliant § 170(f)(8) language, contemporaneously.
  • [ ] Every quid pro quo payment over $75 accompanied by a § 6115 statement with a good-faith value estimate.
  • [ ] Form 8283 signed for noncash gifts over $5,000; three-year Form 8282 tripwire calendared.
  • [ ] Gift acceptance policy adopted (so someone can say no to the timeshare).

Earned revenue

  • [ ] Every revenue line classified: related / exempt-function, or unrelated.
  • [ ] Form 990-T filed if UBI exceeds $1,000; § 512(a)(6) silos computed separately.
  • [ ] Sponsorships drafted as § 513(i) acknowledgments, not advertising — no qualitative or comparative language, no prices, no calls to action.
  • [ ] Commercial activity monitored against the operational test — is it still ancillary?

Restricted funds

  • [ ] Every restriction documented in writing at the time of the gift, and tracked in the accounting system.
  • [ ] Endowment spending policy compliant with the state's UPMIFA.
  • [ ] Grant agreements reviewed as contracts; reporting deadlines calendared; unspent-funds reversion understood.
  • [ ] Federal awards: Uniform Guidance (2 C.F.R. Part 200) cost principles applied; Single Audit threshold checked.

People

  • [ ] Every worker classified correctly; no paid staff "volunteering" to do their own job.
  • [ ] Handbook current; wage-and-hour, leave, and anti-harassment policies in place.
  • [ ] Volunteer screening, training, and (for youth-serving programs) background checks; abuse-prevention policy and coverage.

Brand and reporting

  • [ ] Name and logo cleared and federally registered; assignments obtained from every designer and volunteer creator.
  • [ ] Cause-marketing deals structured as licenses; commercial co-venture registration checked.
  • [ ] Form 990 filed — never three consecutive misses (§ 6033(j)).
  • [ ] Forms 990 and 1023 posted publicly (§ 6104(d)); state annual charitable report filed.

Primary Authority

Internal Revenue Code (26 U.S.C.)

  • § 170 — charitable contribution deduction; § 170(f)(8) contemporaneous written acknowledgment; § 170(f)(11) qualified appraisals; § 170(b)(1)(A) public charity categories and percentage limits.
  • § 501(c)(3) — exemption; the inurement prohibition; the substantial-lobbying limit; the absolute political-campaign ban.
  • § 501(h) and § 4911 — the lobbying expenditure election and its ceilings; § 4912 — tax on disqualifying lobbying.
  • § 508 — notice requirement (27 months) and the presumption of private foundation status.
  • § 509(a) — public charity classifications; § 509(a)(1), (a)(2), (a)(3) supporting organizations.
  • §§ 511–514 — unrelated business income tax; § 512(b) modifications; § 512(a)(6) siloing; § 513(a) exceptions; § 513(i) qualified sponsorship payments; § 514 debt-financed income.
  • § 4940 and §§ 4941–4945 — private foundation excise taxes: net investment income (§ 4940), self-dealing (§ 4941), mandatory distributions (§ 4942), excess business holdings (§ 4943), jeopardizing investments (§ 4944), and taxable expenditures with expenditure responsibility (§ 4945, § 4945(h)).
  • § 4955 — tax on political expenditures. § 4958 — excess benefit transactions and intermediate sanctions. § 4960 — excise tax on excess executive compensation.
  • § 6033 — annual information returns; § 6033(j) automatic revocation after three years. § 6043(b) — liquidation reporting. § 6104(d) — public inspection. § 6115 — quid pro quo disclosure.

Regulations

  • Treas. Reg. § 1.501(c)(3)-1 — the organizational and operational tests, private benefit, and the dissolution requirement.
  • Treas. Reg. § 1.508-1(a)(2) — retroactivity of recognition.
  • Treas. Reg. § 53.4958-6 — the rebuttable presumption of reasonableness.
  • Treas. Reg. § 56.4911-2 — direct and grassroots lobbying; the safe harbors.
  • 2 C.F.R. Part 200 — Uniform Guidance for federal awards.

Cases

State law (no nationwide rule — confirm your own state)

  • Revised Model Nonprofit Corporation Act (1987) and Model Nonprofit Corporation Act (3d ed. 2008) — the model from which many state nonprofit corporation acts draw; adoption is partial and uneven.
  • Individual state nonprofit corporation acts (e.g., California Nonprofit Corporation Law and the Nonprofit Integrity Act of 2004; New York N-PCL and the Nonprofit Revitalization Act of 2013). For the content of directors' duties, Delaware corporate law is the analytical reference point American courts and commentators reason from — but it is a for-profit reference point applied by analogy, and the governing law for any given charity is its own state of incorporation.
  • State charitable solicitation and registration acts, and state attorney-general oversight of charitable assets — the enforcement engine of nonprofit law, and entirely state-by-state.
  • State insurance codes — coverage, the duty to defend, and bad-faith remedies are state law and vary materially.

Other authority

  • Rev. Rul. 2007-41 — political campaign intervention: the facts-and-circumstances framework.
  • Uniform Prudent Management of Institutional Funds Act (UPMIFA); Uniform Trust Code §§ 405, 413 (charitable trusts and cy pres); Restatement (Third) of Trusts § 67.
  • National Association of State Charity Officials, Charleston Principles (2001) — the widely followed (but non-binding) guidance on when internet solicitation triggers state registration.
  • Volunteer Protection Act of 1997, 42 U.S.C. §§ 14501–14505.
  • Fair Labor Standards Act, 29 U.S.C. § 201 et seq.; Title VII, 42 U.S.C. § 2000e et seq.; Lanham Act, 15 U.S.C. § 1051 et seq.; Copyright Act, 17 U.S.C. §§ 106, 107, 110(4).

Secondary Sources

  • Bruce R. Hopkins, The Law of Tax-Exempt Organizations (Wiley) — the standard treatise; the first place to go on any § 501(c)(3) question.
  • Hopkins, The Tax Law of Charitable Giving — substantiation, appraisals, and deduction limits.
  • Gregory L. Colvin, Fiscal Sponsorship: 6 Ways to Do It Right — the source of the Model A / Model C vocabulary.
  • Marion Fremont-Smith, Governing Nonprofit Organizations: Federal and State Law and Regulation — the definitive account of AG oversight and fiduciary duty.

Related UpLaw Resources

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This toolkit is general legal information from UpLaw (uplaw.us), not legal advice, and does not create an attorney-client relationship. Nonprofit corporation law, charitable solicitation registration, and attorney-general oversight vary by state, and federal tax rules and thresholds change; verify current requirements and consult qualified counsel before acting.