We regularly counsel public charities on issues regarding their tax-exempt and public charity status, as well as unrelated business income and executive compensation. We also counsel such organizations on appropriate objectives and vehicles for investment of their property, creating special endowment funds to allow for proper management and expenditure of charitable property, and obtaining licenses for an organization to solicit contributions in different jurisdictions. We provide counsel to planned giving and development officers on all aspects of charitable planned gifts, bequests, contested estates and regulatory matters. To help charitable organizations attract contributions from the public, we have counseled organizations regarding the establishment of charitable split-interest trusts, gift annuity programs, pooled income funds and other arrangements. We also advise individual and corporate donors on the most advantageous way to structure their charitable contributions.
Sidley has substantial experience in advising public charities on issues involving governance and administration including consideration and adoption of “best practices” designed to improve and enhance these organizations’ governance, administration and accountability. Our lawyers and clients have been involved with many watchdog groups in helping to formulate new policies for the charitable sector.
For example, we have worked with our charitable clients on:
- Formation of independent and competent audit committees to oversee the audit, accounting and financial reporting processes of charitable organizations.
- Adoption and enhancement of conflicts-of-interest policies governing transactions involving the charitable organization when one or more of its trustees, officers or staff has an interest in the transaction separate from the organization’s interest.
- Advice on establishing compensation for officers in a manner consistent with the “excess benefit transaction” rules under section 4958 of the Internal Revenue Code.
- Advice on establishing internal controls and policies on maintaining books and records.
- Adoption of “whistle-blower” policies for handling complaints on accounting, controls, audit, governance and other relevant matters.
- Adoption of a “code of ethics” for the charitable organization’s trustees, officers and staff of the organization, setting standards that promote honest conduct, accurate and clear public disclosure, compliance with applicable law, and maintaining confidentiality where appropriate.
- Establishing and maintaining tax-exempt and public charity status and avoiding unrelated business taxable income.