Best Nonprofit & Charitable Organizations Lawyers in Brooklyn

About Nonprofit & Charitable Organizations Law in Brooklyn, United States

Nonprofit and charitable organizations in Brooklyn operate within a framework of federal, New York State and New York City laws. Most community groups, charities, private foundations, membership associations and cultural institutions choose to incorporate under New Yorks Not-For-Profit Corporation Law and seek federal tax-exempt status under Internal Revenue Code section 501(c)(3) or another 501(c) classification. Once incorporated and recognized as tax-exempt, organizations must follow rules about governance, fundraising, financial reporting, employment, public disclosure and permitted political activity. Brooklyn nonprofits also interact with city agencies when they hold public events, apply for city funding, lease or buy property, or run programs that touch vulnerable populations such as children, the elderly or people experiencing homelessness.

Why You May Need a Lawyer

Nonprofit work often raises complex legal questions. People typically seek a lawyer in these situations:

- Starting a nonprofit - choosing the right legal structure, drafting articles of incorporation and bylaws, obtaining an Employer Identification Number and preparing the IRS exemption application.

- Obtaining or maintaining tax-exempt status - preparing Form 1023 or 1023-EZ, responding to IRS requests, handling unrelated business income tax issues.

- Fundraising and compliance - ensuring solicitations comply with New York Attorney General registration and reporting rules, drafting solicitation materials, managing charitable gift restrictions, and running raffles or special events.

- Contracts and real estate - negotiating leases, purchase agreements, facility use agreements, vendor contracts and grant terms.

- Governance and fiduciary issues - conflicts of interest, board member duties and liability, indemnification, and preparing governance policies like conflict-of-interest and whistleblower policies.

- Employment and volunteer matters - hiring and firing, wage and hour compliance, benefits, background checks for staff and volunteers, and handling harassment or discrimination claims.

- Regulatory investigations and audits - responding to IRS audits, New York Attorney General inquiries, or contractual compliance reviews by funders.

- Mergers, restructurings and dissolution - combining organizations, transferring charitable assets, or winding down operations while protecting donor restrictions.

Local Laws Overview

Key legal topics that are particularly relevant to nonprofits in Brooklyn include the following.

- State incorporation and governance - New Yorks Not-For-Profit Corporation Law governs formation, required corporate records, board roles, annual meetings and dissolution. Bylaws and written policies establish governance practices that can reduce liability and improve transparency.

- New York Attorney General registration and reporting - most charitable organizations that solicit or receive contributions in New York must register with the Charities Bureau and file an annual financial report, commonly known as the CHAR-500. The AG also enforces charitable trust and fundraising rules and investigates misconduct.

- Federal tax-exempt status - organizations seeking tax exemption under Internal Revenue Code section 501(c)(3) must satisfy organizational and operational tests, restrict political campaign activity, and avoid excessive private benefit. Failure to comply can result in revocation of exempt status and tax liability.

- Fundraising and special events - fundraising activities may trigger registration, bonding or permit requirements. Raffles, lotteries and gaming are tightly regulated in New York and often require specific state or local permits. Special events in public spaces may require NYC permits, insurance and compliance with public safety rules.

- Employment and volunteer law - New York State and New York City have minimum wage rules, paid sick leave, paid family leave and other worker protections. Background checks, fingerprinting and mandatory trainings may be required when working with children, elderly people or other protected groups.

- Property and tax exemptions - nonprofits may be eligible for property tax exemptions when real property is used exclusively for charitable purposes, but local procedures and documentation are required. Sales tax exemptions for purchases depend on the organizations status and the type of transaction.

- Unrelated business income and commercial activities - income from activities unrelated to the nonprofit mission can be taxable. Careful structuring, separate entities or commercial contracts can limit tax exposure but introduce additional compliance obligations.

- Privacy and data security - New Yorks SHIELD Act and other laws require reasonable data security measures for personal information. Nonprofits that collect donor or client data should adopt privacy and data-protection policies.

- Lobbying and political activity - New York allows nonprofits to lobby within limits, but 501(c)(3) organizations must avoid permitted political campaign activity. Lobbying registration may be required at the state or city level for certain activities.

Frequently Asked Questions

How do I legally form a nonprofit in Brooklyn?

Forming a nonprofit generally requires filing articles of incorporation with the New York Department of State under the Not-For-Profit Corporation Law, adopting bylaws, appointing an initial board, obtaining an EIN from the IRS, and applying for federal tax-exempt status if desired. You should also register with the New York Attorney General if you will solicit or receive contributions in the state.

What is the difference between incorporation and 501(c)(3) tax-exempt status?

Incorporation under state law creates a legal entity that can enter contracts, hold property and limit director liability. Federal 501(c)(3) recognition is a tax status granted by the IRS that exempts qualifying organizations from federal income tax and may allow donors to deduct contributions. You can be incorporated without being tax-exempt, but many nonprofits pursue both.

Do I have to register with the New York Attorney General?

Most organizations that solicit or receive contributions in New York must register with the Charities Bureau and file annual financial reports. There are exceptions for certain religious organizations, small organizations below contribution thresholds, and entities that qualify for other exemptions. Registration requirements are fact specific, so legal review is recommended.

How long does it take to get federal tax-exempt status?

Timelines vary. Simple applications using Form 1023-EZ may be processed in a few weeks to a few months. Full Form 1023 applications typically take several months and can take longer if the IRS requests additional information. Preparation time before filing depends on your organizations structure and recordkeeping.

Can a nonprofit engage in political activity?

501(c)(3) organizations are prohibited from participating in political campaigns for or against candidates. They may engage in nonpartisan voter education and limited lobbying that does not constitute a substantial part of their activities. Other nonprofit classifications, such as 501(c)(4), have different rules. Consult counsel before any political or lobbying work.

What are the fiduciary duties of board members?

Board members owe duties of care, loyalty and obedience. Duty of care means acting with the prudence of a reasonable person in similar circumstances. Duty of loyalty requires prioritizing the nonprofits interests over personal interests. Duty of obedience demands compliance with governing documents and the organizations mission. Written policies and regular training help board members meet these duties.

How should we handle restricted donations?

Restricted donations must be used according to the donor’s restriction. Keep clear records that identify restricted funds, maintain separate accounting or fund codes, and communicate with donors if restrictions cannot be honored. Unlawful diversion of restricted funds can trigger legal claims and regulatory scrutiny.

What happens if the IRS or New York Attorney General audits us?

Cooperative, documented responses are important. For IRS inquiries, provide requested tax filings, financial records and written explanations. For a New York Attorney General inquiry, you may need to produce governance documents, fundraising contracts and bank records. Retaining an attorney as soon as you receive official contact helps protect rights and coordinate responses.

Do nonprofits need employment policies and benefits?

Yes. Nonprofits operating in Brooklyn must comply with New York State and New York City employment laws, including minimum wage, paid sick leave, wage notices, anti-discrimination laws and mandatory payroll taxes. Written employment policies, clear job descriptions and compliant payroll practices reduce risk and improve staff retention.

Can two nonprofits merge or transfer assets?

Yes, nonprofits can merge or transfer assets, but state law and donor restrictions apply. Mergers often require board approvals, notice to the Attorney General, and attention to charitable trust rules for restricted assets. Legal counsel can help structure a compliant transaction and address tax, contractual and regulatory implications.

Additional Resources

Here are agencies and organizations that commonly assist nonprofits or provide authoritative guidance:

- New York State Attorney Generals Charities Bureau - enforces charitable laws and handles registration and reporting.

- New York Department of State Division of Corporations - handles nonprofit incorporation filings and certificates.

- Internal Revenue Service, Exempt Organizations unit - for federal tax-exempt applications and guidance.

- New York State Department of Taxation and Finance - state tax issues and sales tax questions.

- New York City agencies for local permits and programs - for event permits, public space use, and city funding requirements.

- New York Council of Nonprofits and local nonprofit support organizations - training, templates and advocacy for nonprofits.

- Local bar associations and pro bono legal clinics - low-cost or free legal help for qualifying nonprofits.

- Nonprofit finance and accounting advisors - for audit, bookkeeping and compliance guidance.

Next Steps

If you need legal assistance for nonprofit matters in Brooklyn, consider the following practical steps:

- Gather key documents - articles of incorporation, bylaws, financial statements, grant agreements, corporate minutes, employment contracts and donor records.

- Identify your primary legal question - formation, tax-exemption, employment compliance, fundraising or an urgent investigation. Being specific improves the value of initial consultations.

- Find an experienced nonprofit attorney - look for lawyers with specific experience in New York nonprofit, tax-exempt and charitable law. Ask about fees, typical timelines and whether they handle matters you anticipate, such as state AG interactions.

- Prepare for a first meeting - have a concise summary of your organization, a list of current legal or compliance concerns, and copies of relevant documents. Ask about billing practices and expected costs for the work you need.

- Explore low-cost options if budget is limited - local bar association referrals, nonprofit legal clinics, pro bono programs and nonprofit support organizations can offer help or refer affordable counsel.

- Implement basic compliance practices right away - adopt a written conflict-of-interest policy, keep clear accounting records, maintain minutes and ensure grant restrictions are tracked. These steps reduce risk and improve credibility with funders and regulators.

- Act promptly on urgent issues - if you receive notice of an audit, inquiry or legal claim, contact counsel immediately to preserve rights, respond correctly and limit exposure.

Getting the right legal help early can protect your nonprofits mission, financial health and reputation. When in doubt, consult an attorney who understands New York and New York City nonprofit law and the specific needs of Brooklyn organizations.