Nonprofit

Overview

With offices in New York City, Los Angeles and the nation’s capital, each home to a vast number of associations, charities, cultural institutions, educational institutions and hospitals, Arent Fox has developed an extensive nonprofit organization practice based on thorough understanding of the unique concerns, legal, tax, environment and business needs of entities in this sector.

Arent Fox advises exempt organizations on tax, government relations, finance, real estate, labor, intellectual property, antitrust and litigation. We serve as general counsel to many associations and nonprofit organizations. We provide counsel to educational institutions, hospitals and health care organizations, trade and professional organizations, religious institutions, museums, foundations and public charities. Arent Fox offers legal services in these areas:

General Counsel and Transactional Services

Arent Fox serves as general counsel to many nonprofit organizations. We have substantial experience advising clients regarding general corporate matters including conflicts of interest, bylaws and procedures, document retention and voluntary compliance with Sarbanes-Oxley guidelines. We also provide corporate governance counseling for directors and officers and other fiduciaries faced with increased public and private scrutiny and enhanced standards of accountability. Our lawyers in this field lecture on corporate governance issues for, among others, the American Society of Association Executives and Board Source.

Tax

Tax issues are critical in the nonprofit world. Arent Fox obtains tax-exempt status for new organizations, represents organizations before the Internal Revenue Service and other taxing authorities, negotiates arrangements with for-profit and nonprofit entities in ways that address the unique tax considerations applicable in the arena, and maximizes tax benefits for executives. Other services include:

• Advising clients on how to avoid the imposition of intermediate sanctions and unrelated business income when entering into transactions with private individuals and other taxable entities
• Advising clients on structuring joint ventures, royalty, affinity and sponsorship agreements, scholarship programs, lobbying and political activity, use of tax-exempt bonds and achieving public charity status
• Providing guidance to clients undergoing IRS audits and conducting mock IRS audits
• Counseling on corporate reorganization of tax-exempt organizations and on cost sharing agreements among exempt and non-exempt organizations and among organizations exempt under different Cod provisions
• Advising on campaign finance laws and statutes regulating political activity of nonprofits
• Counseling on planned giving techniques, the use and registration of charitable annuities and the establishment of testamentary charitable trusts and gifts

Government Relations

Arent Fox is skilled in direct lobbying, monitoring legislative activities, drafting legislation and representing clients in Congressional and executive branch efforts. Our government relations team includes several former US senators and House members, a former member of the board of directors of the Export-Import Bank of the United States, as well as lawyers and professionals with extensive and recent experience on Capitol Hill, in the executive branch and in the political arena. We have built a reputation of credibility and effectiveness by working with Republicans and Democrats over the 60 years Arent Fox has represented clients in Washington.

We regularly counsel nonprofit organizations that confront federal and state legislation, regulation and agency policies that affect their and their members’ economic and policy interests. Public policy management work includes:

• Shaping legislation, regulations, appropriations and government policy through direct lobbying and coordination with members of Congress and their key staff, the executive branch, and state legislators and regulators
• Securing Congressional approval for creating, expanding or modifying federal programs, including authorization and appropriations matters
• Drafting legislation, report language, position papers, comments and testimony
• Preparing witnesses for hearings and testifying on behalf of clients before Congress, the executive branch and state or local bodies
• Representing clients in Congressional and executive branch investigations
• Conducting political audits to assist clients in refining their political strengths
• Building and maintaining effective coalitions, grassroots efforts and constituent support initiatives, including Web-based advocacy networks
• Counseling clients on a wide array of political law issues
• Offering coordination and integration of public relations efforts, fundraising and media campaigns
• Serving clients’ internal government relations needs as a Washington office headquarters

Arent Fox advises nonprofit clients on all aspects of tax, election and lobbying laws. Congress is considering new legislation that will mandate change in many aspects of nonprofit governance—and how exempt organizations can be involved in grassroots or multimedia issue advocacy. We are advising clients on these changes that will affect fundraising and mission success.

Finance

Arent Fox assists tax-exempt institutions in using tax-exempt and conventional-test financing to augment and develop projects and acquire equipment, with a particular focus in Washington, DC, area, New York City and New York State. In the District of Columbia, important clients have included the John F. Kennedy Center for the Performing Arts, the Howard Hughes Medical Institute, The George Washington University, the National Geographic Society and the Carnegie Endowment for International Peace. We also assist entities locally and nationally in financing public facilities, school facilities, headquarter facilities and other projects.

We have the leading borrower’s counsel practice in the Washington, DC, area and have participated in approximately 80 percent of the conduit municipal bond issues of the District of Columbia since the inception of its bond program. Members of the firm serve as borrower’s counsel, bond counsel, special tax counsel, underwriters’ counsel, credit enhancer’s counsel or trustee’s counsel on numerous such financings.

Real Estate

Arent Fox structures transactions to take full advantage of the tax-exempt status of our clients and minimize tax on unrelated debt-financed income and techniques to avoid or reduce local real property tax. We represent nonprofits and end users of real estate, including in the financing, acquisition, leasing and development of real estate for nonprofits, turn-key development, in-leasing, out-leasing and “like minded” leasing in which unrelated business taxable income is avoided.

Labor, Employment, Compensation and Benefits

Arent Fox has broad experience representing primarily management in solving all types of legal problems that arise out of the employment relationship, such as employment discrimination and sexual harassment claims, wrongful discharge cases and alternative dispute resolution (ADR) programs. We also have experience in tenure, credentialing, hospital privileges and similar employment issues unique to nonprofit clients.

Nonprofit organizations are subject to unique rules in the compensation and benefits areas. We practice extensively in the areas of executive compensation and recruitment, ERISA, and employee benefits including providing tax advice and plan design for deferred compensation plans, retirement (Section 401(k), Section 403(b) and Section 457) plans, welfare (including health, disability, life, AD&D, cafeteria and severance pay) plans and fringe benefit plans maintained by nonprofit organizations. We counsel clients on COBRA and HIPAA issues, and provide advice on fiduciary requirements, reporting and disclosure obligations, funding requirements (such as VEBAs and other types of trusts) and plan termination liability issues and procedures.

Intellectual Property, Technology, E-commerce, Sweepstakes and Promotion

Arent Fox conducts trademark availability searches and registers trademarks for nonprofit clients in the United States Patent and Trademark Office. We also work closely with several major trade associations in establishing, implementing and negotiating contracts with network service providers and their industry-wide and online services, including industry-wide product catalogs and other databases. We also counsel clients on the protection and use of copyrighted material and the registration of copyrighted works with the United States Copyright Office.

Our technology transactions and e-commerce services include assisting trade associations and nonprofit clients to procure, dispose of and license intellectual property and conduct activities on the Internet. We have experience in domain name disputes, and we draft and negotiate agreements regarding intellectual property rights, including multimedia transactions, technology transfer, co-branding, revenue sharing, procurement, product and software development, distribution, outsourcing and system integration. We also counsel clients on Internet home page development, corporate e-mail policies, hyperlinks and electronic data interchange. We bring domain name and copyright infringement actions to protect clients’ intellectual property rights, and we advise clients on whether their Web sites are “tax-compliant.”

Arent Fox’s contests, sweepstakes and international promotion management practice encompasses all aspects of running a sweepstakes or contest, from initial conception to post-promotion activities.

Antitrust and Competition Law

Trade associations and other nonprofits have unique antitrust and competition law needs. Frequently composed of competitors, trade associations need to be wary of communications between members that can be viewed as violations of antitrust laws. An inopportune conversation between members at a meeting can lead to civil litigation and criminal charges. Groups often receive subpoenas for documents and other information from civil plaintiffs and the government, in civil and criminal investigations and trials. Services in this area include:

• Helping clients respond to subpoenas by negotiating their scope with the requesting party
• Answering document requests and interrogatories
• Producing documents and other information
• Defending depositions and defending clients at trial
• Establishing trade groups, rules and bylaws

Clients include dozens of national trade associations in many industries, including health care and pharmaceutical distribution (the Healthcare Distribution Management Association, Visiting Nurses Association), automotive (the Motor and Equipment Manufacturers Association), biotechnology (the Biotechnology Industry Organization), retailing (the National Association of College Stores), food and beverage (National Soft Drink Association), construction (Associated General Contractors), agriculture (National Grain and Feed Association.) and consumer credit (National Foundation for Consumer Credit).

Litigation

More than 70 Arent Fox litigators are skilled in the arts of advocacy and dispute resolution. We have a strong team of trial lawyers, and have won verdicts for our local, national, and international clients in state and federal courts throughout the country. We also have an active appellate practice and have argued cases before state and federal appellate courts throughout the country as well as before the United States Supreme Court. Again, certain unique rules apply to litigation for (and against) exempt organizations, including unique jurisdictional and process issues—all areas we are experienced in.

Arent Fox litigators will help the client undertake an analysis of the potential benefits, costs and risks of pursuing a particular litigation strategy.