Nonprofit and Exempt Organizations
DCBFB attorneys have decades of experience helping nonprofits and exempt organizations, both secular and religious
Nonprofit and tax exempt organizations have long been the backbone of civic engagement and social change in the United States. In 1831, during his historic visit to the United States, Alexis de Tocqueville observed:
Americans of all ages, conditions, and dispositions constantly unite together. Not only do they have commercial and industrial associations to which all belong but also a thousand other kinds, religious, moral, serious, futile…Americans group together to hold fetes, found seminaries, build inns, construct churches, distribute books… I have frequently admired the endless skill with which the inhabitants of the United States manage to set a common aim to the efforts of a great number of men and to persuade them to pursue it voluntarily.
One recent estimate showed over 1.5 million such registered organizations. And this number does not include a multitude of religious organizations (temples, churches, synagogues, mosques, etc.) that are treated as tax exempt but do not have to be individually registered with the Internal Revenue Service. The sector is also financially large with a 2017 survey (the last year statistics are available) showing total assets of 501(c)(3) groups (only a portion of all tax exempt organizations) at 4.3 trillion dollars.
While the concepts of nonprofits and tax exempt organizations are related, they refer to different legal issues.
“Charles Bridgers offered valuable help to us as we started an international relief organization. He guided us through the various registrations with the state of Georgia, helped us with the IRS 1023 form, and made suggestions for our business plan and governance documents to start us on the correct path to success.” – M.M.
State law provides for a number of formal business structures such as corporations, limited liability companies, limited partnerships, etc. A nonprofit corporation is a type of corporation whose purpose is to engage in charitable, education, service, religious, or social change. In Georgia, nonprofit corporations are either members nonprofits (where a separate membership votes on the Board of Directors) or non-members nonprofits (where the Board of Directors replaces itself). Georgia law now (as of January of 2021) also allows for a hybrid organization known as a social benefit corporation that allows social entrepreneurs to dedicate their organizations to more altruistic purposes than purely increasing shareholder value.
"As a newly filed 501(c)(7), nonprofit social club, we needed assistance making sure that our release, waiver and covenant not to sue were legally sufficient. As a membership organization that organizes social events for our members, we were contemplating requiring proof of COVID-19 vaccination to attend our events and we needed legal guidance in making those decisions. Charles's advice was timely and thorough and the information he provided was set forth in clear, understandable language which enabled our board to make educated decisions on how to move forward. He even carved out some time after hours to join our Zoom board meeting to answer questions. It enabled us to bring our practices in line with Georgia law, which is important since all of our events currently are held there and to avoid potential liability. " - Client
Tax exempt organizations
A nonprofit corporation usually, but not always, applies to the Internal Revenue Service to be recognized as “tax exempt” under section 501(c) of the Revenue Code. The most common type is a 501(c)(3) is organized for the purpose of charitable, educational, or religious missions and does not turn a profit. However, there are 28 other forms of 501(c) organizations including 501(c)(4) social welfare organizations, 501(c)(6) business leagues, 501(c)(7) social organizations, etc. Each type allows some variation of being exempt from the paying income taxes on revenue it receives and allowing gifts to the organization to be tax deductible by a donor.
An organization applies for tax exempt status using an IRS 1023 form that varies in complexity depending on, primarily, the amount of income the organization anticipates over the first few years of its existence. Typically, a tax exempt organization then files an IRS 990 tax return on a yearly basis that also varies in complexity depending on an organization’s yearly revenue.
A tax-exempt or nonprofit corporation, like any other effective organization, must be built on a firm foundation with clear and trustworthy governance structures. To that end, we provide the following services:
- Formation of a non-profit corporation
- Obtaining an EIN for the organization
- Registration with the IRS as an exempt organization (501)(c) organization
- Registration of the non-profit under the Georgia Charitable Solicitations Act (if the organization is not otherwise exempt)
- Creation of Governance Documents (for example, bylaws, continuing resolutions, constitutions, conflict policies, etc.)
- Registration of service/trademarks in the State of Georgia
- Employment policies if the organization will hire employees
- Review of business plans in support of donor accessibility
Not every organization needs all of these services or may not need them at different points in its life cycle. But we are ready to work with you to determine what is the best path for your organization.
Members of our firm are not only versed in the laws of nonprofits but are active in them. For instance, Charles Bridgers is currently President of a multi-location camping ministry and previously served for six years as Vice-Chair of a 12 million dollar budgeted social service organization in Georgia. Kevin Fitzpatrick has been a long time member of the Board of Trustee of Oglethorpe College and Michael Caldwell served the Georgia Chiefs of Police association as general counsel for decades. We understand the legal and practical issues of these organizations both as lawyers and as volunteers.
Contact a Georgia law firm experienced in organization formation
DeLong, Caldwell, Bridgers, Fitzpatrick, & Benjamin, LLC in Atlanta assists in the formation of nonprofit and exempt organizations. Call us at 470-443-0524 or contact us online to arrange a FREE consultation. Our Atlanta office is ADA accessible.