I am extremely excited to announce that we now have another attorney on our team. Please welcome Jennifer Hubbard to the team! Jennifer started earlier this week and has already served as an excellent resource for our clients.

We are very lucky that Jennifer decided to join us. She has a passion for the clients we support and the firm we are trying to build, the talent and demeanor to become an expert in the field, and years of experience running a program and creating resources for people overwhelmed by the legal system. As we continue to build a firm that meets our clients where they are and provides practical advice so they can navigate the law and move towards better practices, I know that she will be a huge part of it.

A related announcement: we are officially a national operation! Jennifer is based in Atlanta and licensed in Georgia, and we’ll work together so that we can continue to effectively serve non-profit clients around the country on all of the issues that they face. We now have an Atlanta address (Five Concourse Parkway, Suite 3000; Atlanta, GA 30328) and we’ll eventually take meetings there as things get back to normal. We really look forward to getting involved in the Atlanta non-profit community and learning more about how we can support our priority causes there.

One last note: Michelle and I received incredible applications from around the country and had great conversations with a number of talented and interesting candidates (and even more applications that we wanted to follow up with but ran out of bandwidth). The hiring process alone was inspiring because it connected us with a number of people who share our idealism and who have their own unique vision for an impactful career and workplace that we would love to incorporate. Over the next several months, we hope and expect to announce more new hires (and new cities!) to build our capacity and incorporate additional skillsets to provide more comprehensive services to our clients.

We are so grateful for all of our clients who have helped us grow to this point.

There are times when I read over the most recent batch of IRS 501(c)(3) denial rulings and shed a tear (figuratively speaking, of course) for the shattered dreams of well-intentioned but misguided applicants. This is not one of those times.

There was a batch of six IRS denial rulings that came across my desk, and I will probably cover at least a few of the other five eventually. But my penchant for schadenfreude drew me to the one that mentioned blatant partisan campaign intervention and prohibited benefits to a multi-level marketing company. And honestly, it’s much worse than that.

Let’s do a quick recap as an excuse to cover these two issues, one of which is as “black-and-white” as they come (electioneering) while the other (managing private benefit so that a relationship to an affiliated for-profit does not cost the 501(c)(3) its exempt status) is typically a very gray area and one that we spend a lot of time talking to clients about in order to get the balance right. But, honestly, I just wanted to share some insane facts.

To be honest, I have a very hard time getting excited about California legislative updates when it comes to non-profits. I’m not sure why — I’ll get worked up about the occasional ballot initiative or state legislation when it comes to social issues I care about. For example, I have lots of only vaguely informed thoughts on SB 8 and its (in my mind, exciting) override of local zoning. (If I could afford Bay Area real estate, I’d be trying to build a 2nd unit in my backyard as we speak).

But when it comes to charities, maybe I’m just too close to it. Or maybe there are just too many discussions of potential changes that I just generally wait until things come into effect before getting too stressed about the potential effects.

For example, there is a new crowdfunding bill (AB 488), it is objectively important to the big and small players. And if you ask me, AB 488’s broad language makes it important to perhaps more players than is intended (or at least more organizations than I think they need to be subject to this bill). But, I do not have strong feelings about it yet. My guess is that I will once it goes into effect and a lot of clients have questions about it, and by the time I form opinions, there may well be a push to change it. So, for now, if you want to read about the crowdfunding bill, check out this article on For Purpose Law Group’s blog by Linda Rosenthal (whose work is consistently a great resource for the sector).

For now though, I’d rather use a far less important bill (AB 900, which, admittedly, I also only learned about from Linda’s other recent blog post) to talk about trusts as an option for charities considering what legal form to select.

I have been delinquent in keeping this blog as updated as I like, but there are some exciting updates coming about the firm both in the next couple of weeks and going into next year.

In the meantime, to make some gesture towards public service, I wanted to publish the materials I put together for a presentation I gave earlier today: “At the Intersection of 501(c)(3) and Social Enterprise: The Basics”. The presentation was for the exempt organization section of the Chicago Bar Association (great group of people with great questions!) and drew on some materials I’d put together in the past in collaboration with a former colleague, Jinna Kwak (many thanks to her for her assistance with it).

There’s some useful (and not useful) charts and information in there, all intended to reflect a bit on the Social Enterprise Sector, how to make sense of what it means, a process for determining what structure is the right one for a “social entrepreneur,” some time running through technical issues, and just a lot of rambling (and there was considerably more rambling by me over Zoom).

Anyway, if you’re interested, check it out here. And more information to come soon!

What exactly are we supposed to do?  And how do non-profits fit into it?

There have been many days that I considered writing this post.  Apparently, Texas’ two latest blows against the autonomy of women and voting rights were enough, especially when cast against a backdrop of a pandemic and displacement around the globe from war and climate-caused disasters.  Horrendous injustice and suffering are not new, of course. The dominant forces in this country have always actively fought to disenfranchise and inflict cruelty upon women and people of color.  

But I’d argue that the way we experience these tragedies is new.  Technology may have increased our capacity to solve problems.  But, that increase is exponentially outpaced by the increase in our awareness of the full extent of misfortune.  Even when we manage to put our phone down and try to enjoy the relative privilege of our lives, it still rattles against our table, reminding us of its portal back to a situation that feels hopeless.

The answer to the questions at the top?  I have no idea, truly.  I default to pessimism, which may have a high degree of accuracy but is not always constructive when it comes to pushing the rock back up the hill.  

Still, if you think you know what to do and you want to leverage the non-profit sector to push back against these developments, I can at least offer a few thoughts on some tools to think about. 

I can’t promise I’ll write up every 501(c)(3) denial letter from the IRS. I would like to think that one day, the IRS will be replete with resources and separating out wheat from chaff so efficiently that no EO law blogger could keep pace. But we are not there yet. And I enjoy this and believe in these denial letters as useful reminders of the rules enough that, for now, we’ll keep this going.

To that end, we have 4 new rulings this week, at least 3 of which are at least interesting in the sense of “I could easily see someone setting up a 501(c)(3) wanting to do something like this, and not quite getting why it doesn’t work.” And another that I can’t pretend anyone would want to read.

I am beyond excited to announce Mill Law Center’s first hire: Michelle Leung, an exceptionally skilled and dedicated paralegal with years of experience meeting the wide variety of legal needs of non-profit corporations.

Michelle will be Mill Law Center’s Managing Paralegal and will only make us more efficient as we form non-profits, help them establish and maintain tax-exempt status, and efficiently handle ongoing governance and compliance tasks. Michelle also has significant planned giving experience to support the services we provide donors interested in executing charitable gifts or forming charitable remainder trusts. Above all that, Michelle is deeply committed to our mission and is a passionate advocate for the causes we support.

Our ongoing series on 501(c)(3) denials continues with not one but two rulings addressing a frequent topic of discussion: open source software development as a tax-exempt activity.

(A denial letter also came out for a rodeo that wants to be a 501(c)(3), but as a San Francisco-based attorney, I talk to a lot more open-source applicants than I do rodeos.)

I often make the comment about practicing non-profit law that it is hard to give advice and get people to listen to it when it feels like the regulators are not minding the store. I even wrote a blog about it for my prior firm in the context of exemption applications.

Every once in a while though, the IRS breaks its silence, says ‘no’ to a non-profit, and people like me try to gather the scraps and learn something from it.

To that end, I thought it might be useful or entertaining to start a series on IRS Denial Rulings. They are somewhat rare and so redacted that it is hard to make any sense of them, but they are all that the tax gods are willing to offer us. So, we must make of them what we can and draw overbroad conclusions.

Let’s get started with PLR 202127040 (aka the Case of the Anime Convention That Was Apparently Too Fun).

I will not pretend to be the most diligent follower of legislative developments and Supreme Court cases. It is important, no doubt, but I excuse myself based on my limited reserve of emotional energy to allocate to disappointment. It probably never has been, but the current state of affairs is not a source of inspiration. No award-winning musicals will be made of one Senator’s quest to save the filibuster at the apparent expense of democracy (though admittedly “Manchin!” sounds like a more interesting writing project than this blog). There will be no prestige historical drama about the conquest of the American judiciary by the Federalist Society.

But as the keeper of a non-profit legal blog, I have an obligation to briefly (and perhaps cynically) address two big developments from the past month: The ACE Act and Americans for Prosperity Foundation v. Bonta.

Where there is money, there are lawyers and consultants. And where there are lawyers and consultants, there are acronyms, deployed like they are words that everyone knows.

There is a lot of money flowing around the impact investment sector. Therefore, it can be very easy for non-profits, and especially private foundations, to get lost in a sea of letters when they want to invest in a manner that advances their charitable purposes. There’s only so much a blog post can do, but let’s see if we can unpack four of the big acronyms.

When planning this firm, one of the first things I did was write a first draft of this blog post. I find that if you leave behind a great and established boutique firm to start your own firm from scratch, it can be helpful to journal.

To that end, I thought I would lead with some "frequently” (i.e not-yet) asked questions about Mill Law Center, what lies ahead, and what I hope to achieve here.