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Private and Corporate Philanthropy

Practices

Foundation & Exempt Organizations

Our Foundations and Exempt Organizations group assists clients in establishing and effectively operating nonprofit tax-exempt organizations, including private foundations, community foundations, publicly supported charities, supporting organizations, tax-exempt organizations affiliated with municipal governments, trade associations and taxable nonprofit entities. The group advises clients on tax and corporate planning for nonprofit organizations; formation of nonprofit entities; qualification of nonprofit entities for tax-exempt status; formation of ancillary and subordinate affiliates: conversions to and from exempt status; structuring of joint ventures with for-profit entities; formation of LLCs among nonprofit and for-profit organizations; and corporate reorganizations and liquidations, including reorganizations of hospitals, arts organizations, museums, foundations and other exempt organizations.

The group, particularly, and the firm, generally, have strong expertise in corporate governance matters. The group advises nonprofit boards on fiduciary duty issues and organizations on nonprofit corporate law issues, including best governance practices for boards, preferred protocols for corporate governance, and Sarbanes-Oxley principles applicable to tax-exempt organizations.

The group has significant experience working with family foundations, particularly second and third generation family members who are managing the private foundations established by their ancestors and working to retain the relevance of the foundations' charitable goals. The group also has deep expertise in counseling corporate private foundations, particularly on the permissible connections between the foundations' activities and those of their corporate or family sponsors.

The group represents exempt organizations before the Internal Revenue Service and in connection with proceedings with or initiated by the offices of various states’ attorneys general, including, in the latter case, attorney general review of transactions/actions undertaken by charitable organizations, i.e., Ohio Revised Code §1702.39 reviews. The group requests formal and informal advice from the Internal Revenue Service on behalf of clients, including the filing of ruling requests, and represents them in connection with tax controversy work, including Internal Revenue Service audits, appeals and tax litigation.

  • Modifying the governance structure of a family foundation to address geographic dispersion of family members.
  • Handling the split-up of private foundations.
  • Restructuring private foundations to accommodate divergence of views as to philanthropic focus among family members.
  • Assisting a tax-exempt organization in implementing a strategic plan, including the consolidation of operations, the development of new operations and formation of other related entities, and a change in status for federal tax-exempt purposes.
  • Liquidating private foundations and public charities.
  • Converting private foundations to supporting organizations or donor-advised funds.
  • Restructuring an exempt organization by forming a holding company, operating subsidiaries and taxable subsidiaries to align the corporate structure with the business objectives and shield the tax exemption for the organization from growing for-profit lines of business.
  • Forming a tax-exempt organization to handle operations for and on behalf of a municipal body.
  • Restating charitable giving documentation for a large community foundation.
  • Creating a fundraising foundation for a tax-exempt operating charity.
  • Structuring the private use of a tax-exempt financed facility to comply with private use bond restrictions and avoid unrelated business income on certain uses.
  • Negotiating and handling all aspects of the affiliation of a local hospital with a larger health care system.
  • Assisting a corporate private foundation in creating and expanding programs that address charitable initiatives of its domestic and foreign employees.
  • Developing a joint venture between a tax-exempt charity and a for-profit corporation for the operation of a new initiative of the charity in a new geographic location.
  • Forming supporting organizations to a large tax-exempt institution to allow it to accept complex interests in other business entities as charitable gifts.
  • Converting a for-profit home health care agency to a nonprofit entity and operation.
  • Structuring an LLC involving a tax-exempt charity and for-profit entities for the undertaking of educational operations for the tax-exempt charity intended to qualify as a charitable activity.
  • Assisting charities with the establishment of endowment funds, special purpose funds and charitable giving vehicles.