It’s been a quiet few months on our blogs, but we hope to have some exciting updates soon.

In the meantime, we wanted to share a couple of upcoming events where we will be doing hopefully unique and fun talks on charitable giving in different parts of California:

I will be giving a presentation at the Annual Meeting of the Northern California Planned Giving Council in San Francisco on April 24, 2023. The topic will be “Taxes and Charitable Giving – What Do Gift Planners Need to Know?” I’m looking to use it to talk as non-lawyerly as possible about the tax concepts that drive certain types of giving and decision-making, and give charities a greater ability to have persuasive conversations with their donors.

My colleague, Jennifer Hubbard, and I will be giving a joint presentation at the Western Regional Planned Giving Conference hosted by the Los Angeles Council of Charitable Gift Planners in Costa Mesa, CA, which runs from May 16 to May 18, 2023. The topic will be “Gifts That Make You Call a Lawyer: Working Through Some Stressful Planned Giving Situations”. This one should be a fun one, with Jennifer and I sharing anecdotes from tricky gifts that our clients have dealt with and some strategies to try and make everyone happy (or at least make most people, mostly happy).

Our blog has been a little quiet lately as we have all been doing our best to keep up with what has been a very busy last few months for our clients. To commemorate our first full year as a firm, and a year where we added several new members and many great nonprofits as clients, we want to take a quick look back at some of our posts and resources from the past year.

We (Ehsan Ali and I, along with our good friend Jinna Kwak from Adler & Colvin) just gave a fun presentation on fiscal sponsorship and spotting (and resolving) risks in the context of new projects, here at the annual meeting of the National Network of Fiscal Sponsors in San Diego

It was a lot of fun and involved us throwing together some useful (if a bit chaotic thanks to me) materials. Sharing those here in case they are useful to anyone, either who made it to the conference or is just interested in fiscal sponsorship.

I’m speaking at the “Ask the Expert” session with Erin Bradrick of NEO Law Group tomorrow. Looking forward to that too!

Most of our blog posts are for the benefit of nonprofits and the legal and accounting community that serve them. This is not one of those posts.

At this point, if you are not a billionaire*, we ask that you stop reading. No hard feelings — there will be more posts on UBIT, lobbying, and other fun tax-exemption issues for you soon. Come on back then. This is just a very special post for a special audience.

*We try to be as inclusive as possible here at MLC, so if your net worth is not yet over $1B but is at least many millions of dollars and you’re feeling bullish, we welcome you to stick around.

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Are we alone now? Great.

I want to talk to you about a special opportunity we have. Namely, one where you give our 501(c)(4) affiliate the entirety of your company, save yourself hundreds of millions of dollars in taxes, and dominate our political system from the grave in perpetuity. And get yourself fawning and misleading (in your favor!) coverage in major publications.

Sound good? Excellent, let’s continue…

While most primarily associate it with the end of summer and a three-day weekend, 2022 is an excellent year to recognize Labor Day for what it is:  a celebration of workers and their power to organize. 

With the erosion of labor law by politicians and the courts that began in the 1970’s and continued through the last administration, it is hard to believe that in 1894, this country believed in unions enough to declare Labor Day a federal holiday.  Review the sweeping rights of workers introduced by the National Labor Relations Act in 1935 and consider just how far the mainstream left has retreated from economic justice – Congressional Democrats today could never pull this off.

But, if you will indulge a fleeting moment of optimism, consider the viral success of organizing efforts at Starbucks, Amazon, and other megacorporations, the 500-Day Warrior Met coal strike that continues as we speak, the sectoral bargaining that (subject to Gov. Newsom’s signature) would be created in California to regulate wages and practices in the fast food industry under AB 257, and a new Gallup poll showing a record high in terms of the public support of unions (71%!  Think of how many matters of objective fact fail to get that high of a consensus!).  It is possible that the decline in union membership, which closely parallels the stagnation and decline of the true wages of the working and middle class, may be reaching a turning point.

So….what does this all have to do with nonprofit law?  I’m glad you asked. 

Since reading The Lever and ProPublica’s excellent and essential joint piece, by Andrew Perez, Andy Kroll & Justin Elliott this morning, I have been wrestling with the best way to write about Barre Seid’s $1.6B gift to “The Marble Freedom Trust.” The Trust, a 501(c)(4), will be run by Leonard Leo, the co-chair of the Federalist Society who advised on the prior administration’s disfiguration of the judicial branch and is dedicated to various conservative and theocratic causes. 

I find the current state of affairs repugnant, and it is brutally depressing to see our country’s reactionary forces so thoroughly financed in perpetuity.  So, rather than try to organize a blog post, I will just free-associate…

One of our favorite things to do is talk to people with ideas for a new charitable activity and help them figure out whether and how they want to move forward.

And, in those conversations, we find ourselves raising the same question fairly often, particularly for small projects or projects that may or may not last for the long-term: are you better off just doing this as a fiscally sponsored project instead?

While we certainly love to help people form new non-profits, it is undoubtedly true that not every project needs a new entity to bring into existence. Fiscal sponsorship represents a great alternative in many cases and helps people with a big idea keep things simple while they figure out if it is going to work or not.

In the spirit of helping clients make a more informed decision, our team (Charli Cleland, Cate Chang, and myself) worked together to create a guide to weighing the option between a new entity and securing a fiscal sponsor.

We’ve also added this to our Resources page — where it joins several other resources we hope will be useful to non-profits and the people who lead them (clients and non-clients alike).

In true self-serving fashion, I want to at least note a milestone in the life of our firm: our first anniversary.

When I started the firm as a sole proprietorship on June 15 of 2021, I had hopes for a firm like this, but my primary memory is of racing home from my last firm’s office to start billing in the hopes of having enough revenue for paying my rent in August.

Now, we’re a law corporation with 7 employees with a structure I find exciting and more than 200 clients from all over the nonprofit, philanthropic, and social enterprise spectrum. The growth of the firm over the past year, the culture we have created, and the quality of firm we are becoming is by far the thing I am the most proud of, professionally or personally.

When I went to read back over the first post I wrote with the idea behind MLC this morning, I certainly recognized my own writing and priorities, which I think have persisted today: a focus on external and internal equity, a different approach to billing and customer service, and not appreciating having to use my own name in the firm (suggestions for other words starting with “M” continue to be welcome so that we don’t have to replace the MLC business cards).

But I also recognized something profoundly different about that blog post from how I might write about the firm now. And, of course, that is because it is truly not “my” firm anymore, but “our” firm. This blog is no longer just a reflection of my thoughts about law firms and the nonprofit sector, but the outlet for a collective enterprise with governance driven by and profits split equally among all of our employees, with its own personality and vision. And, truly, that is everything I could ask for.

So, with that, I’d just like to give my immense thanks to our wonderful attorneys (Jennifer Hubbard, Ehsan Ali, Charli Cleland, and Cate Chang — all of whom are exceptional, with different backgrounds and skillsets, and who are already incredible resources for our clients), to our legal support specialist (Zulefika Mofokeng) who deals with the chaotic energy of legal work and wrangles it all into an incredibly efficient operation, and, most of all, to our managing paralegal, Michelle Leung. Without Michelle, I have no doubt that this would still be a solo shop, and a disorganized, less successful one at that — Michelle’s business acumen, prodigious skill as a paralegal, and natural talent as a kind and effective manager of people and operations has allowed us to thrive as an organization while providing consistent quality service to our many clients.

I look forward to future anniversaries, when I can fully recede into the background behind this great group and all the new people we hope to bring into our community in the coming months and years.

Thrilled to announce a new item on our resources page: a video overview of the political activity rules for public charities by one of our attorneys, Charli Cleland. Reposting it here so the regular readers of our blog can find it more easily.

For those who do not have the privilege of knowing Charli, the video is a wonderful example of Charli’s ability to clearly, cogently, and humorously explain complicated concepts, while underlining something we believe deeply as a firm: charities (or at least the ones doing the work we believe in) should embrace the potential for conducting advocacy fearlessly in the many ways the law allows. Very proud to be able to promise more of these videos in the future. And like the video says, please feel free to reach out to Charli or another member of team if you have any questions on how your organization can engage effectively and legally.

A draft opinion was leaked yesterday that was somehow both shocking and unsurprising. A fifty-year war on the reproductive rights and bodily autonomy of people – in the name of theocracy, patriarchy, or the ingrained antipathy that drives our country in its current direction – approaching a monumental and devastating victory.

There are better places to read about how this happened, what we can do to mitigate the crushing harm this will have on birthing people, and what we need to do to ensure this victory of theirs is a fleeting one. And, on an individual level, I cannot claim to be able to fully grasp the personal impact of a decision like this, being told that the legal precedents and traditions that secure your rights are somehow more disposable than those of everyone else. We may post or link to further reflections on these more essential topics by more capable people.

I would like to at least briefly reflect, however, on something I vaguely understand: the relationship between nonprofits and the law.

As we at MLC move into (yet another) busy season and fall behind on substantive blog updates, we at least want to jump in for an exciting announcement and to share a quick plug/powerpoint.

Most excitingly, I’m very glad to announce that one of my favorite lawyers, Cate Chang, has joined our team as Of Counsel. Cate brings many years of tax experience in-house and at law firms, including time at Adler & Colvin as an exempt organizations lawyer that overlapped with mine where she proved herself to be one of the smartest and kindest lawyers I’ve come across. Cate has only been with us for a couple of weeks and has already made a tremendous difference in helping us meet client needs and continuing to build the firm’s capacity and culture. Cate will also maintain our firm’s San Francisco presence and be a great resource for our many clients in the Bay Area. Please join us in welcoming Cate!

Less excitingly, but perhaps of interest to our private foundation clients: I’ll be speaking about self-dealing tomorrow for CPA Academy with Alan Gassman of Gassman, Crotty & Denicolo. It’s free, so if you’re interested (either live or later on tape), check it out here: https://www.cpaacademy.org/webinars/a0D2S00000rjD4yUAE

A couple quick updates:

For those who checked out the cryptocurrency presentation from a couple of weeks back, and wanted to spend more time hearing me talk about charitable giving and tax rules, in collaboration with the excellent attorneys at Gassman, Crotty & Denicolo, there are two new presentations to check out. One, on Selecting a Philanthropic Vehicle, took place last week and you can find the video here. (I’ll fully admit that I moved too fast because there was far more material than we could hope to cover). The second part of that presentation: “Charitable Solutions for Wealthy Clients of Caring CPAs: UBIT and Tax Reporting” will actually take place on Wednesday (2/23/22) at 1pm. Both are free, so feel free to check them out and judge my presentation style and content. In the spirit of sharing information, I’m embedding some of the slides that I contributed to the presentation. We’ll be adding more fine-tuned versions of these to the Resources page soon.

We have added a new location: Los Angeles! In terms of our office address for meetings and days where the Southern California-based employee(s) (as of 2 weeks ago, just me) deign to venture into the office, that is 445 S. Figueroa Street, Suite 3100, Los Angeles, CA 90071. San Francisco will continue to be our headquarters, and I’ll be traveling back and forth regularly (without charge to clients) for client and networking meetings. And, we should have another attorney starting in a few weeks that can help us ‘hold down the fort’ up there. But, we are very excited to be expanding into Southern California and getting to know more of the non-profits and philanthropists down here doing great work, especially those aligned with our mission. Please don’t hesitate to reach out to us if there is anything we can do to support the Los Angeles nonprofit community!

As the churn of work has picked up as we move into 2022, our ability to put out as many educational resources as we’d like has slowed a bit unfortunately. I look forward to turning that around soon.

I do want to share, however, a presentation on Charitable Donations of Cryptocurrency I recently did with Alan Gassman of Gassman, Crotty & Denicolo, a great estate planning firm out of Florida that puts on a tremendous series of webinars I recommend that estate planners and other attorneys check out.

In addition to the powerpoint, I’m also embedding the video (or at least I assume it’s all the video of me talking — once I hear the sound of my own voice, I have to turn it off).

Keeping our momentum going, I’m pleased to announce a new resource on our MLC Resources page. This time, the topic is “Non-Profit Corporate Structures: The Basis and Advanced Applications.”

I think the intro to the presentation on that page does most of the work, but a few stray thoughts:

One of our main resolutions for the new year for MLC was to start fulfilling our promise to publish resources for non-profits and social entrepreneurs. At some point, this activity will roll over to our non-profit affiliate, MLC Collective, as part of its educational mission when that launches later this year.

Appropriately enough our first resource is actually on the topic of for-profit and non-profit affiliates. In my mind, these are always some of our most interesting projects and often brings us in contact with people with big, exciting ideas, who are passionate about their mission, but wary about whether a non-profit structure can be too limiting.

There are definitely pitfalls in the area, but I’m generally an optimist when it comes to making these structures work, which is why we are starting our own non-profit affiliate in the first place. In the course of advising clients, we have developed our own way of thinking about these projects. After having had this conversation countless time, I thought now would be a good time to put into writing and pictures to share it a bit more broadly (though we are always happy to bombard anyone who wants to talk about this with us with even more information and ideas).

First and foremost, I want to welcome Charli Cleland to the firm as our second Of Counsel, which we fully expect to evolve into a full-time role by early next year. Charli brings an exceptional and eclectic background as a former public defender, civil litigator, and consultant to non-profits on hiring equity. These experiences, Charli’s passion for the same causes that we care about, and Charli’s potential to build this organization into something that contributes meaningfully to them in unique ways has me incredibly proud to announce Charli as the newest team member. In the coming months and years, Charli is going to be an incredible resource for our clients and I’m just proud he can continue his career doing meaningful work as part of our team.

Between, Charli, Jennifer, and Ehsan as attorneys bringing varied backgrounds and perspectives and Michelle, who is unquestionably the best managing paralegal and business partner anyone could ask for to create a firm and culture like this, I am truly overwhelmed by the team we have. The fact that they are all here together working on this project with me before our 6 months’ anniversary (Happy 1/2 birthday to us on December 15th!) is incredible and has me more confident than ever that we can actually achieve some of the ambitious ideas I’ve had that I have mostly kept to myself (unless you’re one of my good friends that is tired of hearing about them).

So, let’s take a moment to run down those ideas that will start becoming reality in the next few weeks and months:

Before I forget and this gets lost in the holidays, I wanted to make sure I used this (very) modest platform to plug Loyola Law School’s and UCLA Law School’s joint conference on exempt organizations: Western Conference on Tax-Exempt Organizations (WCTEO).

Ever since I started practicing in this area, this has been my favorite conference to attend. Not just because I enjoy the time spent in downtown LA but because they get great panelists from among IRS representatives, advisors, nonprofits, and other experts, and there is really something for everyone. For this year, the conference is virtual, which still makes me a little sad of course, but hopefully gives more people the chance to see the great program Ellen Aprill and others have been putting on for years. I’m particularly looking forward to the keynote from Teddy Schleifer from Puck News and the session on legal issues associated with becoming an anti-racist non-profit moderated by Gene Takagi at NEO Law Group. Ingrid Mittermaier and Nancy McGlamery of Adler & Colvin (my prior firm) are also doing on sessions on private foundation terminations and charitable giving, which I’m sure will be great.

Hope to see some people there — if only through Zoom.

I could not be happier to announce that we have another new attorney to announce: Ehsan Ali, who is licensed in New York, based in New York City, and joining us in an Of Counsel role.

Ehsan brings so much great experience to the firm that will only make us stronger. Ehsan has years of experience as litigator and runs his own mediation practice at Venn Mediation, which makes him a terrific resource for helping our clients navigate contentious situations productively. Ehsan has also spent years as outside general counsel to a wide variety of businesses, helping them identify practical solutions and strategies for growth, so he will be a vital resource on a wide range of non-profit transactional matters. Over the next few months, that role will expand as we develop a social enterprise practice, through which we will support for-profit clients doing meaningful adjacent to or collaboration with the non-profit sector (more to follow soon!). And most importantly, Ehsan shares our vision for being a leading and cost-effective resource for private foundations and public charities throughout the country, which will always be at the core of what we do.

Speaking of which, we are also announcing our presence in New York City. We look forward to taking meetings at our new office on the 9th floor of 14 Penn Plaza (225 West 34th Street, New York, NY) and getting to better know the nonprofit sector in the NYC metropolitan area.

Lastly, from a personal perspective, it is immensely satisfying to be able to announce great attorneys like Ehsan Ali and Jennifer Hubbard joining us, and a physical presence in three cities with robust nonprofit sectors before we are even five months old. And there are more exciting developments to come — all thanks to the clients who give us the opportunity to support them as they carry out their missions. We are incredibly grateful.

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.