Presentation to Winston Salem State University

On Friday March 21, 2014 the Community Law & Business Clinic’s Arts & Entertainment Group gave a presentation to students at Winston Salem State University about legal issues facing artists. Presenters included third year law students Disha Gandhi, Leslie Evans, Michael Glotzbach, James Goodwin, and Christopher DiGirolamo.

Presenters covered a variety of topics such as trademarks and copyrights, contracts, and tax issues. The presenters also discussed many issues students were concerned about in a Q&A session, ranging from graphic design and creating logos for companies to music sampling and unintentional infringement. There were many legal issues that the students had not considered and the presenters were able to help them see that there are solutions, as well as ways to prevent these problems from occurring in the first place. Working with an attorney before you begin any project is one of the best ways to prevent an issue from arising.

Read more about the presentation in this article from the Winston Salem Chronicle.

If you are an artist or entertainer and would like legal assistance or more information about legal issues facing you or your business, please contact the CLBC.

Presentation to Associated Artists of Winston-Salem

Wednesday, March 19th 2014. In partnership with Associated Artists of Winston Salem, the Community Law & Business Clinic’s (CLBC) Arts & Entertainment Group led an informative presentation about practical legal issues relevant to artists. The presenters, Leslie Evans, Disha Ghandi, Michael Glotzbach and James Goodwin covered topics such as trademarks and copyrights, insurance protection and tax compliance.

The recent sale of WhatsApp to Facebook for $19 billion is a high-profile indication that products of the creative process can be valuable indeed. Unfortunately, without proper legal guidance and compliance, creativity-based businesses and individual artists can be blindsided by trouble, often before they can get traction in the marketplace. Being fluent in these topics and working with an attorney who understands the field can often head off issues before they arise.

You can see pictures from the event at AAWS’s Facebook page. You may also download a copy of the presentation.

If you are an artist or entertainer and would like legal assistance or more information about legal issues affecting you or your business, please contact the CLBC.

Posted by Casey Crowley

Section 501(c)(4): The Other Tax Exemption

The following post was written by guest blogger and CLBC student John Nail (JD ’14).

Download a digital copy of this guide.

Determining which section of the Internal Revenue Code to pursue tax exemption under is an important consideration for nonprofit planners, one that will likely have a lasting impact on their organization. Most nonprofits receive tax-exempt recognition by meeting the requirements of a charitable organization under section 501(c)(3); however, many entities that fail to meet those strenuous requirements may qualify for recognition as a “social welfare organization” under section 501(c)(4). This post looks at the requirements for a “social welfare organization” and provides a brief comparison between social welfare organizations under section 501(c)(4) and charitable organizations under section 501(c)(3).

An entity is exempt under section 501(c)(4) as a “social welfare organization” if it is operated exclusively for the promotion of social welfare, which means that the entity is engaged in some way in promoting the common good and general welfare of the community. A social welfare organization cannot provide a benefit for a private group or for its members; however, the organization does not have to benefit every member of society equally if any limitations on the benefit are a result of the activity the organization pursues and are not imposed by the organization. While the exemption may seem overly broad, the IRS has analogized section 501(c)(4) to a “catchall” provision for beneficial nonprofit entities that are not exempt under other provisions of the Internal Revenue Code. Section 501(c)(4) has been used by a wide range of entities, including those that supervise facilities that teach safe handling and care of firearms, conduct annual festivals to further regional customs and traditions, and are created to make loans to businesses to induce relocation to economically depressed areas.

There is substantial overlap between entities that would qualify as charitable organizations under section 501(c)(3) and social welfare organizations under section 501(c)(4), but there are several differences that should be considered. First, contributions to a 501(c)(4) organization are generally not deductible for the donor, but they are under section 501(c)(3). Second, a 501(c)(3) entity risks its tax exemption if it engages in any insubstantial nonexempt activities (like political lobbying), while a 501(c)(4) organization can engage in nonexempt activities as long as those activities are not the primary activities of the organization, which can still result in substantial nonexempt activities. The “primary activities” of a social welfare organization is determined by looking at the facts and circumstances that surround the activities. Finally, an organization is not operated for social welfare if its primary activity is carrying on a business with the general public; however, an organization exempt under section 501(c)(3) may operate a business if the sole purpose for the business is to raise funds for charity.

While there are benefits to pursuing exemption under other provisions of the Internal Revenue Code, the catchall qualities of section 501(c)(4) provides many beneficial entities a pathway to tax-exempt status and should be considered by nonprofit planners. For more information see IRS Guidance on Section 501(c)(4) Organizations and Requirements for Exemption – Social Welfare Organizations.

Posted by Casey Crowley

Nonprofit Essentials – Budget & Financing

It was a pleasure seeing everyone again for the Budget & Financing session of the Nonprofit Essentials series. As we discussed during the session, I have included electronic versions of several documents and links to resources below.

  1. The Powerpoint presentation is electronically accessible. Note that the slides we skipped due to time constraints have been included.
  2. An electronic copy of the financial ratio analysis exercise we did is available.  Recall that standalone ratios are most useful when appropriate sector comparisons are made. Guidestar is a great resource for finding 501(c)(3) organizations’ Form 990 financial data.
  3. We skipped over the business model portion of the presentation, but I think it’s a very useful tool. Steve Blank’s Business Model Canvas can be found online, along with my transcription of the text portions of that document.  Blank’s website, Business Model Generation, is also worth a visit; it includes a good video about applying the Business Model Canvas.
  4. In passing, I referenced a Stanford Social Innovation Review article called 10 Nonprofit Funding Models. The article goes into detail about the basic templates for revenue generation in nonprofits, and is an interesting read.
  5. Lastly, here is a link to Dan Palotta’s TED Talk, The Way We Think About Charity is Dead Wrong. The talk raises interesting questions about the scale and nature of spending in charitable organizations, including the overhead issue we discussed.

Posted by Casey Crowley

Essentials of Business for Nonprofits – Budgeting and Finance

Thanks to all who attended the Essentials of Business for Nonprofits – Budgeting and Finance session on October 17, 2013 at the Wake Forest Charlotte Center. A couple of quick notes:

  1. The Powerpoint slides are available online.
  2. The financial ratio analysis exercise can also be found online, for those that did not pick up a copy. Additional useful resources on nonprofit financial ratio analysis are available from the Nonprofits Assistance Fund. Especially useful are a) a list of common ratios and b) an Excel spreadsheet for calculating them.
  3. Since business models are covered in another segment of the program, we did not cover them in detail. However, I did reference a Stanford Social Innovation Review article called 10 Nonprofit Funding Models that I wanted to provide a link to.
  4. Lastly, I mentioned the Community Law & Business Clinic, a legal clinic at Wake Forest School of Law that offers pro bono work for–among others–nonprofit organizations. Several people asked for more information on areas of practice and how to apply, all of which can be found at the CLBC website.

We look forward to seeing you at the next session.

Posted by Casey Crowley

Community Law & Business Clinic offers capacity-building programs for nonprofits in Charlotte and Winston-Salem

The Community Law Clinic will once again offer capacity building programs for nonprofit organizations during the 2013-2014 academic year. The Essentials of Business for Nonprofit Organizations program, offered in Charlotte, provides nonprofit leaders with targeted seminars on key issues facing today’s nonprofits. More details and registration information for the Essentials of Business for Nonprofit Organizations are available.

The Nonprofit Essentials program, offered in Winston-Salem, also provides nonprofit leaders with seminars on vital aspects of operating successful nonprofits. Details and registration information for the Winston-Salem sessions are available.

Both series include courses on board governance, human resources, strategic planning, fund development and program evaluation. Courses are taught in a seminar format over an afternoon and are designed to provide participants with core skills during a 3-hour session.

The nonprofit sector plays a vital role in establishing and maintaining our quality of life. Through the Essentials of Business for Nonprofit Leaders and Nonprofit Essentials Programs, the Community Law Clinic strives to add the resources of Wake Forest University to the missions of the many organizations that make our community a better place to live.

Posted by Steve Virgil

BizLaunch 2013 a success

The CLBC attended BizLaunch 2013 at Forsyth Tech. We enjoyed the event, and got a chance to meet small business owners in the community. Sign us up for next year.

Ali holding down the fort at BizLaunch 2013.

Posted by Casey Crowley

The Foreclosure Crisis and the Community Law & Business Clinic

Foreclosure remains a significant problem in most of the U.S. and for millions of families. After five months of relative decline, lenders accelerated foreclosure and repossession efforts during June 2013, as evidenced by an 11% increase in foreclosures over June 2012.

The loss of a home to foreclosure is devastating. In addition to being dispossessed of the home, families frequently lose personal belongings, incur costs for relocating and face significant challenges in finding new housing following the foreclosure. School age children face the challenge of a new school after frantically moving to another home, often disrupting their education. Finally, because the home represents the largest asset owned by most families, its loss can mean a permanent setback that limits options for financing college, building future assets or saving for retirement.

Although lenders have a legitimate claim to dispossess homeowners following default on a mortgage, it is often the case that the homeowner has options available to modify, forebear or otherwise protect their home. And by doing so, the homeowner can keep their family’s shelter while also preserving an asset for the community.

In 2011 the Community Law & Business Clinic published the first edition of the North Carolina Foreclosure Manual. Recently updated in 2013, this guide provides answers to the most common questions raised by homeowners and their advocates as they face foreclosure proceedings. The most recent edition of the guide is available online.

Since 2010, the CLBC has represented more than 100 families facing foreclosure and, in most cases, assisted these families in protecting their housing by securing modifications or settlements in civil proceedings. If you are facing foreclosure, and would like information about your options, contact the Community Law & Business Clinic.

Posted by Steve Virgil

BizLaunch 2013

The Community Law & Business Clinic will be at the BizLaunch 2013 Resources Fair on August 6, 2013 at Forsyth Tech West Campus. We will speak to small business owners about legal issues they may be having with their startups. It is oftentimes difficult for small businesses to afford the legal assistance they need. Part of the CLBC’s mission is to increase access to competent legal counsel by offering pro bono legal services, enhancing the chances of success.

Learn more about BizLaunch 2013. We’ll see you there!

Posted by Casey Crowley

CLBC-Urban League Small Business Seminar – Week 1

This week’s Small Business and Entrepreneurship Seminar covered business entity types and the legal implications thereof, and Steve Blank’s Business Model Canvas. The Business Model Canvas is a great 30,000-foot exercise which helps break down the monolithic task of business planning into intuitive, bite-sized steps. Creating such a model for small businesses prior to meeting with your attorney can help you both plan legal representation and spot potential legal issues before they arise.

The slides from the presentation can be found here.

Posted by Casey Crowley