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Jonathan Hwang, nonprofit lawyer in Chicago, counsels a variety of nonprofits including religious institutions, public charities, and private foundations in corporate and tax issues affecting tax exempt organizations.

Starting a Section 501(c)(3) nonprofit can be quite an adventure! What legal steps are required? While the details may vary widely, the concrete steps may be best summarized as follows: (1) form a nonprofit corporation, consistent with Section 50... | Jonathan Hwang

Is it possible for a business to both maximize value for its owners and prioritize social improvement? Traditionally, business founders have been forced to choose one or other. Taxable limited liability companies (LLCs), partnerships, and corpora... | Jonathan Atkinson

“From our birthday, until we die, / Is but the winking of an eye." - William Butler Yeats How exciting to start a nonprofit, to dream about all the good to accomplish in the world! The starting passion, joy, and energy drives nonprofit founders t... |

Forming a new nonprofit organization for charitable, religious, or educational purposes? How exciting! Doing so involves careful planning, leadership development, donor prospecting, and of course nonprofit paperwork. For Section 501(c)(3) tax-exe... |

Does your organization own real estate that could be used by others? Perhaps your organization’s building or other property is currently occupied in whole or in part by other occupants? While the nonprofit sector has occupants, usage fees, and re... |

It’s no surprise to pay sales tax when buying goods at stores. But what happens when a nonprofit organization sells goods, through a website, at periodic conferences, or as part of its program activities? Must the nonprofit collect sales tax to... |

Is your nonprofit legally compliant? A legal check-up can help through corporate governance, tax, risk management, and employment legal considerations. |

Many nonprofits have public relations problems. Thoughtful preparation of a nonprofit’s Form 990s can be a powerful remedy. |

Does your nonprofit need some strategic planning? What does that mean, and what legal aspects should your nonprofit consider? The ALS Association is a useful and well-known example of how strategic planning provides pivotal opportunities, and ra... |

Is your nonprofit up to date on its government filings? Many nonprofits have recently filed their IRS Form 990 annual information returns. But several more government filing and reporting requirements may apply for nonprofits, in distinctly sep... |

Media reports abound with cautionary tales of nonprofits providing massive financial benefits to insiders, arguably leaving less for charity. Recently, news sources reported that the attorneys general for all 50 states and the Federal Trade Comm... |

What could a nonprofit public charity of modest means have in common with National Geographic Society and 21st Century Fox? Plenty, if the nonprofit teams up financially with a business for charitable ventures, such as to promote media projects,... |

Where were you born? For many people, that question leads to all sorts of interesting conversation, and the answer may carry important legal implications. For nonprofit organizations, they are “born” wherever the corporation was incorporated. T... |

Nonprofit corporations are creatures of state law for corporate status and operations, while also subject to federal law for tax-exempt purposes. Under which state law should a nonprofit incorporate, and what other state corporate requirements s... |

Nonprofits and finances – in practice, these two words should fit together well for organizational flourishing, reflecting capable stewardship and stability. But all too often, financial aspects of nonprofit operations can prove intimidating, ove... |

As Bitcoin and other virtual currencies become increasingly popular, Section 501(c)(3) nonprofits may encounter a novel question when a donor offers to contribute Bitcoin. Should the nonprofit accept the Bitcoin as a tax-deductible charitable con... |

All nonprofits should obtain sufficient insurance coverage for their organization’s activities, property, and other needs. The following article addresses liability coverage aspects for risk management purposes, such as warranted for children’s p... |

It is indeed a joyful day when a nonprofit receives the anticipated IRS determination letter, recognizing its tax-exempt status. But note: such status is under federal law and only for income tax liability generally. What state tax considerations... | Adèle-Marie Buis

Has your nonprofit ever engaged in joint activities with a business, perhaps with resulting revenues? Such arrangements are increasingly common for many Section 501(c)(3) organizations. A key legal requirement is that the tax-exempt organization... |

As any nonprofit leader knows, volunteers serve vitally important functions in many nonprofit organizations. What happens when volunteers create original works for their organizations? Generally speaking, the volunteers will own the works absen... |

As most nonprofit leaders recognize, tax-exempt organizations must file an annual IRS Form 990. Until now, only very large or very small nonprofits were required to e-file.[1] In addition, a nonprofit could lose its tax-exempt status without prio... |

Your nonprofit has just identified a capable and promising executive candidate, perhaps for executive director, chief financial officer, or another high-level position within the organization. And the candidate has accepted! What should be negoti... |

“It was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…” |

When nonprofit leaders speak with or exchange emails with that nonprofit’s lawyers, are such conversations subject to attorney-client privilege? How do both the nonprofit leader and the attorney know? More broadly, how do third parties understand... |

For ongoing nonprofit legal compliance, what annual reports need to be filed? Three key types of reports may be required, depending on the specific state involved and the nonprofit’s particular activities: (1) IRS – a version of the IRS Form 990 ... |

Online operations may now be the norm for many nonprofits, but they come with security risks that warrant careful attention. In May of 2017, “WannaCry,” a computer “ransomware” attack, locked up over 200,000 computer systems world-wide. The atta... |

Innovative nonprofit leaders frequently leverage so-called “multicorporate structures” to achieve multiple beneficial objectives. May nonprofit corporations do so, such as through forming subsidiaries? If so, when, and why? What are the liability... |

What are bylaws? Why are they so important? Many nonprofits ask, “Are we correctly following our Bylaws?” Or even, “Where are our bylaws?!” |

Should nonprofits use LLCs in connection with their operations? For nonprofit leaders seeking creative, cost-effective, and risk mitigation options, the LLC option may warrant a careful evaluation. |

Are nonprofits that sell goods liable for state sales tax, like for-profit businesses? And does the answer change if sales are made via the Internet? Nonprofits may indeed owe state sales tax for their sales, depending on their specific activitie... |

No nonprofit venture should begin without a great deal of careful, advance planning. Key questions include the following: Who will serve as leaders? What is the organization’s purpose? What will the organization’s revenue stream look like? R... |

How can nonprofit leaders best comply with legal parameters for using artificial intelligence as part of their operations? |

May nonprofits keep their records private from the general public? Yes and no. Disclosure of IRS Form 990s and Form 1023 is often required, though not always. |

Is your nonprofit at risk for fraudulent financial activity? Nonprofit organizations tend to be more trusting of their employees, have less resources devoted to administrative costs, and have less stringent financial controls than for-profit org... |

Effective January 1, 2025, the newly amended Illinois Not-For-Profit Act requires new public DEI disclosures of officers and directors for certain nonprofits. |

A nonprofit may set up a special fund after receiving a large gift from a key donor (or donors). The donor may make certain restrictions, such as to engage in only certain charitable activities or to provide scholarships for certain educational ... |

Nonprofit “ownership” can be a confusing, counterintuitive concept. It can implicate both financial and control issues for stakeholders. Consider the following scenario. |

The biggest and most important change in data regulation in the past two decades went into effect on May 25, 2018—the General Data Protection Regulation (GDPR). The GDPR introduces significant changes to the way that the personal data of individu... | Paul Winters

May directors and officers get paid by the nonprofit organizations they serve? This question often arises when a nonprofit’s founder seeks compensation for his or her services to the organization, as well as occasionally when payment to others s... |

When it comes to nonprofit programs involving children, worker screening is crucial. Both paid staff and volunteers should be screened to improve safety and reduce risk. |

Can a nonprofit limit its leaders’ individual liability? Should it? Learn about legislative trends and how nonprofits may use exculpation as a risk-mitigation tool. |

Does your nonprofit organization purchase tangible goods at retail, like office supplies, furniture, or computers? If so, it may qualify for exemption from state sales tax on such purchases, with substantial resulting savings. That’s great news!... |

Consider the following case, decided this month: A nonprofit fired an employee forattendance issues, inappropriate behavior, unsatisfactory performance, and insubordination. The nonprofit asserted that the employee failed to timely complete req... |

Nonprofits regularly use logos, taglines, and other descriptions for their organizational activities. To what extent may nonprofits trademark such information, along with their corporate name? Just exactly what is a trademark, and why is it impor... |

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How does a new nonprofit move forward after incorporation? The practical answer is through strong leadership and significant effort! The legal answer is through “First Minutes,” a written corporate resolution reflecting a nonprofit corporation’s ... |

Nonprofits are advised to be especially attentive to emerging data privacy requirements. Six states adopted comprehensive data privacy laws in 2023. | Paul Winters

By definition, a Section 501(c)(3) organization – whether a public charity or a private foundation - must be organized and operated exclusively for tax-exempt purposes as listed in this Internal Revenue Code provision. Applicable tax law imposes... |

Few things are more fundamental than one’s name. It lets others know who you are and how to find you. May a nonprofit trademark its corporate name, so that others are not legally allowed to use it? Should a nonprofit do so, to optimally protect... |

Several new state data privacy laws take effect this year that impact nonprofits. What do nonprofit leaders need to know about staying legally compliant? Learn more about specific state laws and key recommended measures. |

Nonprofit organizations are breathing a sigh of relief as the Nonprofit Parking Tax finally comes to its rightful end. Batts Morrison Wales & Lee (BMWL), an accounting firm dedicated to serving nonprofit organizations, has successfully led the ch... |

If it walks like a duck and quacks like a duck… In an era of waning revenue streams and increasing demand for government services, some cash-strapped municipalities cast a longing eye at nonprofits’ real property as a missed source of r... |

Do nonprofits holding medical information fall under HIPAA coverage? Maybe yes, maybe no, but nonprofits must be careful, especially those nonprofits that provide medical services to patients or otherwise hold medical information. |

Effective records management not only strengthens nonprofit operations—it also builds trust with regulators, donors, and the public. |

Before addressing the duty of obedience as a legal concept, it is critical to understand where to find the nonprofit’s mission. A nonprofit’s mission, often known as a “corporate purpose statement” is typically found in a nonprofit’s charter doc... |

Websites historically contained mostly static information. However, technology evolves, and today, nonprofits rely on their websites to interact with stakeholders for important operational tasks, including: |

When a nonprofit provides assistance instead of or alongside the government, does that qualify as “charitable activity” under Section 501(c)(3)? Think disaster assistance, affordable housing, parks and recreation facilities, drug and alcohol reco... |

For decades, the City of Chicago did not charge its nonprofits for water usage, implicitly recognizing their tremendous societal value through such exemption. That policy changed in 2011, after Mayor Emanuel pushed through a new plan calling for... |

As a general rule, tax-exempt nonprofits are exempt from paying federal income taxes on their net revenues, but they may nevertheless owe taxes on income generated from unrelated business activities. The term “tax-exempt” thus can be misleading.... |