Nonprofit Organizations: A Beginner’s Guide

Nonprofit organizations have become a critical part of American culture.  Not only is the nonprofit sector one of the “fastest-growing part[s] of the U.S. economy,” but also, as a recent study by the Johns Hopkins Institute for Public Policy has shown, nonprofit workers make up approximately 10.2% of the total U.S. workforce.

It is no wonder, then, that information about the law regarding nonprofits is one of our most popular public requests at the Law Library of Congress.  Patrons appear to be most concerned with how to create a nonprofit organization, how to deal with taxation issues, and how to properly govern a nonprofit organization (or deal with management conflicts as they arise).  Thus, we will try to address all of these issues, as well as provide information about internet resources that can assist those interested in nonprofit organizations and the laws that govern them.

Secondary Sources

Like we have suggested in some of our Beginner’s Guides in the past, the best place to start research on a new topic, such as the law of nonprofit organizations, for the first time is to use a secondary source, like a treatise, handbook, dictionary, encyclopedia, or a model act/law.  Once these sources provide you with a foundation in the area, you can use the citations they provide to drill down and find primary source materials.

For True Beginners

• Nonprofit Law Dictionary, by Bruce R. Hopkins (1994)
• The Law of Tax-Exempt Organizations in a Nutshell, by Scott A. Taylor (2011)
• Nonprofit Law & Governance for Dummies, by Jill Gilbert Welytok and Daniel S. Welytok (2007)
• The Complete Nonprofit Corporation Kit, by Mark Warda (2007)
• Nonprofit Corporation Forms Handbook (1990-present)

General

• The Law of Tax-Exempt Organizations, by Bruce R. Hopkins (2011)
• Starting and Managing a Nonprofit Organization: A Legal Guide, by Bruce R. Hopkins (2013 and 2009 editions)
• Understanding Nonprofit and Tax Exempt Organizations, by Nicholas P. Cafardi and Jaclyn Fabean Cherry (2012)
• Model Nonprofit Corporation Act: Official Text with Official Comments and Statutory Cross-References Adopted August 2008, by the Committee on Nonprofit Organizations; edited by William H. Clark, Jr. (2009)
• Rules of the Road: A Guide to the Law of Charities in the United States, by Betsy Buchalter Adler, Ingrid Mitermaier and David Levitt (2007)
• Complete Guide to Nonprofit Organizations: Law, Taxation, Operational Planning, edited by Penina Kessler Lieber and Donald R. Levy (2005)

Creation/Registration

• Nonprofit Fundraising Registration: The 50-State Guide, by Stephen Fishman, J.D. and Ronald J. Barrett (2013)
• Starting & Building a Nonprofit: A Practical Guide, by Peri H. Pakroo (2011)

Taxation

• Nonprofit Organizations: Law & Taxation, by Marilyn E. Phelan (2000-present)
• Tax Planning and Compliance for Tax-Exempt Organizations: Rules, Checklists, Procedures, by Jody Blazek (2012)
• Multistate Guide to Regulation and Taxation of Nonprofits (2006-present)

Governance

• Guidebook for Directors of Nonprofit Corporations, by the American Bar Association Nonprofit Organizations Committee; edited by Willard A. Boyd, III and Jeannie Carmedelle Frey (2012)
• Understanding Nonprofit Organizations: Governance, Leadership, and Management, edited by J. Steven Ott & Lisa A. Dicke (2012)
• The Nonprofit Board Answer Book: A Practical Guide for Board Members and Chief Executives (2012)
• Nonprofit Governance and Management, by the American Bar Association Section of Business Law; edited by Cherie Sorokin, et al. (2011)

Laws/Statutes

Most of the laws on the incorporation and maintenance of nonprofit organizations are dictated by state corporation law.  For more information about state laws and where to find them online, visit the Law Library’s Guide to Law Online. To find your state’s statutes, select your state from the Guide to Law Online page, and scroll down to the “Legislative” section.

With regard to federal laws, researchers will likely be most interested in the Internal Revenue Code, as many nonprofit and charitable organizations can be exempt from federal taxes as long as they adhere to certain guidelines: see the “General” and “Taxation” secondary sources listed above for more information.  The Internal Revenue Code is included in the United States Code at Title 26.  Tax regulations can generally be found in Title 26 of the Code of Federal Regulations (CFR).

Online Resources

In addition to the resources listed above, those interested in the creation and governance of nonprofit organizations can find a wealth of helpful information on the internet.  Below are links to some websites, broken down by topic, that offer more information about the law of nonprofits.

Overviews/Handbooks

• “Starting a Nonprofit: What You Need to Know,” by the University of Richmond School of Law (2006)
• Legal Tools, by Law for Change
• Managing a Nonprofit, by NOLO
• Non-profit Organizations, by Cornell Legal Information Institute (LII)
• Nonprofits and State Filings for Nonprofits, by USA.gov

Clinics/Legal Representation

• “Where can I find ‘pro-bono’ legal assistance for my nonprofit organization?,” by the Foundation Center
• Pro Bono Providers Nationwide, by the Lawyers Alliance for New York
• For those in the D.C. area, check out the Social Enterprise and Nonprofit Clinic at the Georgetown University Law Center

Groups

• National Council of Nonprofits (its Resources page is particularly helpful for newcomers)
• Council on Foundations
• National Center for Charitable Statistics

News/Blogs

• The Chronicle of Philanthropy
• The Nonprofit Monitor
• The Nonprofit Quarterly
• Nonprofit Law Prof Blog
• Nonprofit Law Blog
• JDSupra’s Nonprofits Law News Twitter Feed

Information from the Internal Revenue Service (IRS)

• Publication 557: Tax Exempt Status for Your Organization
• Exempt Organizations Select Check
• Tax Information for Charitable Organizations

If you have any other favorite nonprofit law resources, please share them with us in the comments.

As always, please feel free to contact the Law Library of Congress if you have any questions.

Update on October 28, 2013:  The post was updated to fix an outdated link.