Turn Your Vision Into Lasting Impact
Starting a charity or private foundation isn't just about doing good. It's about building something that lasts, that operates legally, and that actually accomplishes what you set out to do. Without proper legal planning, even the best intentions can fall apart under the weight of compliance requirements, governance disputes, or loss of tax-exempt status.
Understanding Your Options
Charitable entities come in different forms: nonprofit corporations, charitable trusts, and private foundations. Each has distinct legal, tax, and governance requirements.
Public charities operate programs directly benefiting the public. They raise funds from many sources and must meet the public support test, meaning at least one third of their funding comes from the general public or other public charities rather than from a small number of major donors. Public charities must also have a diversified board where related individuals comprise less than 50% of board seats. Most El Paso nonprofits fall into this category: churches, food banks, animal shelters, museums, educational programs.
Private foundations typically have one major source of funding, usually gifts from one family or corporation. They primarily make grants to other charitable organizations or individuals rather than running programs directly. Private foundations can be closely held by family members, but they face stricter regulations and filing requirements than public charities. They must file Form 990 PF annually, which is more complex than the Form 990 that public charities file.
Private operating foundations are hybrids. They can be closely held and funded from limited sources like private foundations, but they must operate programs directly benefiting the public like public charities. They're less common but offer flexibility for families who want close control while running charitable programs.
We help El Paso clients evaluate these options and select the structure that best supports their mission, funding strategy, and long-term objectives.
What It Takes to Get Tax Exempt Status
To qualify for tax exempt status under section 501(c)(3), your organization must be organized and operated exclusively for exempt purposes. Those purposes include religious, charitable, scientific, testing for public safety, literary, or educational activities.
We guide El Paso clients through each step, making sure the organization is positioned to operate effectively and in accordance with applicable laws.
Ongoing Compliance Matters
Getting tax exempt status is one thing. Keeping it is another. Charities and foundations must follow strict rules to maintain their good standing.
We help organizations draft bylaws, policies, and procedures, advise on fiduciary duties of directors and trustees, and address compliance with state and federal reporting requirements. This proactive approach helps El Paso organizations avoid common pitfalls that lead to penalties or loss of tax-exempt status.
How Charitable Planning Connects to Everything Else
Charitable planning often intersects with estate planning and business planning. Many clients establish charities or foundations as part of a broader legacy or succession strategy.
Maybe you want to create a scholarship fund in your family's name. Maybe you're a business owner who wants to give back to the community while also gaining tax benefits. Maybe you're planning your estate and want to leave a charitable legacy while also reducing estate taxes.
We work with clients to integrate charitable goals into their overall legal and financial plans, including the use of charitable trusts and other planned giving techniques.
For Existing Organizations
If you already have a charity or foundation, we provide ongoing legal support. This includes advice on operational issues, governance changes, and restructuring as the organization grows or evolves.
Common issues we help with include adding new programs or activities, changing governance structures, dealing with board disputes, addressing IRS audits or inquiries, merging with another organization, and winding down or dissolving the organization if necessary.
Let's Talk About Your Vision
Whether you're forming a new organization or managing an existing one, we provide practical guidance to help your charitable vision succeed.