Davis Malm's tax-exempt business attorneys adopt a pragmatic approach to resolving the regulatory, tax, and governance problems that uniquely challenge tax-exempt organizations in today's environment.
We advise numerous churches, temples, and other religious organizations; schools; museums and art associations; housing cooperatives; quasi-public financing agencies; public charities dedicated to relieving poverty, helping children, and achieving other social goals; and grant-making private foundations.
We assist with:
- Creation of the entity, including applying for federal tax-exempt status and securing local property and sales tax exemptions.
- Regulatory compliance, especially as mandated by the Sarbanes-Oxley Act of 2002, including liaison with the Massachusetts Attorney General's Public Charities Division and comparable agencies in other states.
- Corporate governance, including establishing board committees, providing for independent review, setting executive compensation, monitoring insider transactions, addressing potential conflicts of interest, defining director responsibilities, and securing liability protection.
- Fundraising, including setting appropriate controls; organizing fundraising events; prudently accepting noncash gifts such as securities, licenses, and intellectual property; and selling assets to raise funds.
- Grant making, including the special issues created by grants to private individuals or to foreign organizations.
- Employee benefits, including Section 457 plans and other tax-deferral vehicles uniquely available to tax-exempt entities.
- "Unrelated" activities issues, including political and lobbying activities, bookstores, publishing, and retail operations.
- Tax and information returns, especially disclosures regarding compensation, governance, and insider transactions required by the new IRS Form 990 (effective 2008), as well as planning for and reporting unrelated business taxable income (UBTI).
- Winding up the entity when it needs to dissolve or when it seeks to combine with another tax-exempt entity.
- Private foundations and various clarifications for public charities.
At each step in the association's life cycle, our focus is always on helping the organization best achieve its social goals while pragmatically implementing best practices in compliance, governance, and administration.
- Assisted in formalizing a plan for a private school sitting on a large parcel of land to sell a portion of the land for development so that the school could continue operations. The school and a developer executed a 99-year lease that included a purchase option of a portion of its land. The school received $1 million in rental income annually. The developer located a tenant for which it constructed research buildings, and the tenant then purchased the parcel from the developer and the school. Read more.
- Using the Dover Amendment, which exempts nonprofit organizations from certain zoning restrictions, counseled a local church facing neighborhood claims of zoning prohibitions in its efforts to build a new building.
- In a local permitting matter, successfully represented a national religious and teaching organization that encountered organized neighborhood opposition.
- Obtained a "public charity" designation for several nonprofit clients.
- Assisted a private school in the "change of use" of its building, financed with tax-exempt bonds.
- Assisted a nonprofit temple in expatriating funds for its foreign mission.
- Helped a church maintain its tax-exempt status and property tax exemptions during the relocation of its main facility.
- Assisted a religious association in the tax-free sale of its temple building.
- Advised a nonprofit social club on how to receive a large donation for capital improvements to its clubhouse while avoiding any tax or loss of its tax-exempt status.
- Represented the Massachusetts Development Finance Agency (MDFA) in financing for a charter school to purchase a former church, parochial school, and convent, and to rehabilitate the property and construct a new addition for the school.