Why Your Nonprofit Needs a Dedicated Attorney
When you launched your nonprofit, perhaps you had big dreams of feeding the hungry or protecting our wildlife. You’ve since assembled a team of volunteers and employees, but that team is still missing one key player: a nonprofit attorney.
In this guide, learn why it’s smart to hire a nonprofit organization attorney in Denver, CO, to help you make an informed legal decision.
Your Nonprofit Can’t Go Without an Attorney – Here’s Why
Nonprofits aren’t businesses, but that doesn’t mean they can go without a dedicated attorney. Not having one can expose your nonprofit to legal trouble that you could have avoided with a good law firm in your corner.
Here’s what an experienced nonprofit attorney will do for you and why their services warrant serious consideration.
Starting Things Off on the Right Foot
In Colorado (or any other state, for that matter), you can’t simply start collecting donations and bill yourself as a nonprofit. The first thing you’ll need to do is register with the Colorado Secretary of State and apply for tax-exempt status. You’ll also need to structure your nonprofit correctly by clarifying your nonprofit’s mission, how it will operate, and how it will manage resources.
It’s easy to make mistakes when creating a nonprofit, which could come back to bite your organization financially and legally if you’re not careful. By hiring a lawyer, you’ll avoid common pitfalls and set your nonprofit up for success.
Identifying Risks That Could Cause Your Nonprofit Headaches
A nonprofit may not be a business, but yours will face operational risks all the same. For example, what will you do if you discover a conflict of interest? What about if an employee tries to sue you for discrimination or you accidentally leak a donor’s private information?
You may want to believe your nonprofit is a happy, harmonious place where everyone works toward a shared goal. But risks like these are inevitable, and you’ll need an attorney who deeply understands nonprofits to help you manage them.
Protecting Your Valuable Intellectual Property
Your nonprofit doesn’t sell goods but has something equally important: intellectual property (IP). Intellectual property includes everything that sets your nonprofit apart, such as your logo, brand imagery, slogans, etc.
Without an attorney, someone could steal your intellectual property and use it as their own. An attorney can prevent IP theft by ensuring your intellectual property is registered correctly.
Keeping You Compliant With Fundraising Laws
There’s a big difference between a child collecting donations for a field trip and a nonprofit requesting money for its cause. Fundraising is tightly regulated in Colorado and must comply with the state’s Charitable Solicitations Act, which the state enacted to prevent residents from contributing to fraudulent charities.
Not complying with the CSA and other fundraising laws will land your nonprofit in hot water. You could face heavy fines or even the shutdown of your organization. It’s not worth the risk, so hire an attorney for guidance.
Helping Your Nonprofit Grow
Your nonprofit may be small now, but it’s wise to plan for growth. For example, perhaps you started with an all-volunteer staff, but you’d eventually like to hire full-time employees for fundraising, accounting, and marketing. A nonprofit attorney will guide you through this switch by advising you on good hiring practices for nonprofit organizations.
Nonprofits need regular funding to stay afloat and expand. Grant funding is available, but applying for it can be complex. Hiring a lawyer to assist you in this process is a good idea.
Guiding Your Nonprofit During Lobbying
When your nonprofit wants a regulation to change, it can lobby someone in power to make that change happen: a city council member, state legislator, or a member of Congress, for instance. Individuals can lobby on anything they want and as much as they want, but there are strict requirements on how nonprofits may lobby. For example, nonprofits aren’t allowed to endorse one political candidate over another.
An attorney can help you determine whether certain actions constitute lobbying. For instance, attempting to change a law is lobbying, while discussing your nonprofit’s interests is generally not.
Saving Your Nonprofit Money Over the Long Term
Some nonprofits steer clear of hiring an attorney because of the costs involved. They’re already running on a shoestring budget, and paying for a lawyer doesn’t seem worth it. However, having a lawyer on your side can save your nonprofit a significant sum.
An attorney can protect your nonprofit from losing money in a lawsuit. And if your nonprofit is the plaintiff in a legal dispute, your lawyer will fight for a fair settlement.
Nonprofit attorneys also help you save money on taxes via exemptions, credits, and deductions. For example, many organizations don’t know that legal fees associated with maintaining the nonprofit are often tax deductible. Your attorney will keep up with ever-changing tax laws and ensure your nonprofit is in compliance so you won’t lose your tax-exempt status.
How To Choose the Right Attorney for Your Nonprofit
Thinking of hiring a nonprofit attorney for your organization? It’s a big step, and you want to be sure you’re choosing the right one. Here’s what to look for.
- Experience with nonprofits: Just because someone is a lawyer does not mean they have the requisite experience to guide your nonprofit. Look for an attorney who has represented nonprofits with similar missions.
- Fee schedule: Unlike personal injury lawyers who usually work on contingency, nonprofit lawyers typically charge by the hour. Ask the lawyer about their fee schedule before hiring them.
- Testimonials: Testimonials from other nonprofits help you decide whether the attorney has the know-how to guide your organization.
Legal Guidance Your Nonprofit Can Count On
Whether you’re already established or are taking your first steps as a nonprofit, our attorneys at Thomas N. Scheffel & Associates, P.C. are here to help. We can guide you through nonprofit corporation formation, help you apply for tax-exempt status, and represent you during transactions such as mergers and acquisitions.
For a consultation with a nonprofit attorney, call (303) 759-5937.