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    Legal Duties for Directors - An Association Guide from Jerald Jacobs

    Nonprofit Organizations


    Navigators for Nonprofits

    Pillsbury represents well over two hundred national nonprofit organizations, including trade, professional, educational, social welfare, veteran and philanthropic organizations. A decades-long commitment to the unique needs of nonprofits positions our Nonprofit Organizations Practice team to thoroughly and cost-effectively counsel clients, to address near-term challenges and devise long-term strategies.

    The firm assists nonprofit organizations not only on routine issues such as governance, contracts and tax exemption, but also on more complex matters such as private or governmental antitrust investigations or adjudications; transactions involving merger/consolidation of organizations; acquisition or divestiture of trade shows, publications or programs; reorganizations or restructurings for tax exemption or other reasons; and legislative campaigns to change the landscape for an industry, profession or field. The creativity and judgment we bring to each challenge are evident as we strive to maintain what outside observers have characterized as the preeminent practice of its kind in the U.S.

    Our leadership in nonprofit law is demonstrated by how often Pillsbury lawyers are selected to present speeches and write articles on legal topics for a variety of nonprofit organization audiences. For more than 10 years, a Pillsbury partner has keynoted the nation’s premier nonprofit law event, ASAE’s Legal Symposium; others speak regularly at ABA and ACCA. In fact, Pillsbury “wrote the book” on nonprofit organization law: The Association Law Handbook: A Practical Guide for Associations, Societies, and Charities, published in its Fifth Edition in 2012. The book was authored by the lead partner in our Nonprofit Organizations Practice and published by ASAE, the 24,000-member “association of associations,” for which that partner serves as General Counsel.

    Each of our lawyers can access a digitally-searchable catalog of nearly 25 years of advice we have provided for nonprofit organizations. This unique and invaluable Compendium tool includes memoranda, opinion letters, articles and research, giving the firm a significant head start on virtually every project. This translates to faster, more efficient legal assistance.

    Pillsbury is far ahead of the field in this area, having advised clients in more than 50 nonprofit organization mergers, consolidations and other combinations. Notable past transactions include the merger of America’s Community Bankers into the American Bankers Association; a consolidation of the World Presidents’ Organization with the Young Presidents’ Organization that involved an unsuccessful proxy challenge; two transactions merging the American Plastics Council into the American Chemistry Council; merging 50 state chapters into a national health charity; and consolidating five national organizations in an amateur sport. Each deal raises unique operational and legal challenges that play to our firm’s full-service, cross-practice strengths.

    Nonprofit organizations often request our assistance to ensure consistency of their articles and bylaws with state law. We also provide interpretations of bylaw provisions relevant to governance issues or disputes. Our lawyers establish related charitable and education foundations, from incorporation and adoption of bylaws to obtaining tax-exempt status. The firm advises on how best to structure the relationships with affiliated organizations in order to maximize efficiency and minimize potential liability. We counsel clients on voting requirements and board committee issues. Our lawyers have often been engaged as principal outside consultants in overall governance reform of nonprofits, from a one billion-dollar budget national membership organization to dozens of others.

    Our lawyers have counseled and advocated for exempt organizations on every conceivable issue, from obtaining/maintaining exemption, to unrelated business income, to state and local tax issues. Nonprofits are interested in maximizing non-dues revenues through affinity, sponsorship, preferred provider, endorsement and other programs. Pillsbury provides legal advice on relevant agreements and extensive experience in minimizing tax liability.

    Pillsbury aids nonprofit clients in negotiating important contracts with partners and vendors of all kinds. Hotel/convention center contracts are a singular challenge for nonprofit organizations; we help minimize the risk from meetings. We provide counsel on how to negotiate attrition, cancellation, mitigation, force majeure and other provisions. We assist with contract termination or enforce contract requirements with vendors, or negotiate settlements and release of claims. Pillsbury’s world-class litigation resources have assisted scores of nonprofits in major contract disputes.

    Pillsbury provides counseling and advocacy in all types of antitrust review and litigation matters. We have represented many nonprofit organizations as defendants or plaintiffs in government or civil antitrust suits, and we have the broadest experience of any firm in assisting nonprofit organizations at the Department of Justice Antitrust Division and Federal Trade Commission. We prepare and review antitrust compliance policies and provide advice on implementation and antitrust ramifications, including the application of “antitrust safety zones.” We also counsel associations on matters such as the permissibility of limiting non-member access to products, services and programs.

    Pillsbury provides legal and business counseling to nonprofit organizations on employment law issues, reductions in force and actions like furloughs, suspension or reduction of employee benefits, attrition incentives and other employee actions intended to reduce costs and mitigate or avoid terminations. We are often asked to assist in the review of plans for terminating employees, specifically arranging settlements, severance and appropriate releases. The firm also provides advice and handles claims regarding allegations of discrimination both in court and before administrative agencies. The firm likely has the most expansive experience in the nation in the intricacies of complex employment and benefit arrangements with nonprofit organization CEO’s and other senior executives.

    Intellectual Property
    Most nonprofit organizations have trademarks, slogans, logos and copyrighted materials. Pillsbury provides counsel on appropriate use policies, protection regimes, infringement and licenses to third parties. We advise our clients on contracts with publishers as well as appropriate releases and assignments for authors, speakers and editors. We have often litigated significant intellectual property disputes involving nonprofits.

    Our clients rely on us to stay abreast of Internet changes and policies relevant to nonprofit organizations. We regularly review and provide comments on web site hosting and development agreements. We also draft and review web site policies and disclaimers including privacy policies and listserv, bulletin boards and chat room policies.

    Certification, Accreditation and Standards
    It is important that appropriate policies and procedures be in place for eligibility, exam review, codes of ethics, intellectual property use and discipline in accordance with requirements for substantive reasonableness and procedural “due process” legal requirements. Pillsbury regularly helps clients with these concerns. We provide advice on the development of standards and recognition programs, as well as complex IP policies for standards developers.

    Lobbying and Political Activities
    Pillsbury represents nonprofit organizations before Congress and federal administrative agencies, as well as state bodies. Our breadth of experience extends to counseling on applicable political campaign, lobbying disclosure and ethics rules, as well as PAC regulations and administration. Our public policy team has often achieved very significant changes in laws and regulations to benefit our client nonprofit organizations’ industries, professions or fields.

    Disputes and Liability
    We work to keep our nonprofit organization clients out of lawsuits by evaluating possible claims and potential risks for programs or transactions. When necessary however, we aggressively defend our clients against claims and demands in arbitrations, mediation and litigation. We have handled countless settlements for clients in disputes with commercial businesses or other nonprofits dealing with contract, hotel attrition, employment, intellectual property, defamation and other legal claims.

    Real Estate
    Nonprofit organizations have leased or owned headquarters and therefore face numerous real estate issues. We regularly advise our clients on lease agreements. For clients who own office space or seek to buy, we counsel on all aspects of the transactions, including zoning, financing, acquisition agreements, tax implications and risk management.

    We assist our nonprofit clients in the evaluation of insurance policies and coverage, including applicability of endorsements and exclusions. We also provide notice to insurers of claims in arbitration, litigation, or negotiation settlements. Among the types of policies we review are directors and officers insurance policies, association professional liability insurance policies, commercial general liability policies and meeting cancellation insurance.

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