NYSBA & NYAG Joint Initiative to Secure Pro Bono Legal Services for Unrepresented Charities in New York
The Need | The New York Pro Bono Landscape | Charity Corps: A Partnership in Service | Program Details | Conclusion
The charitable impulse is a near-universal one, and thousands of not-for-profit organizations here in New York State play crucial charitable roles: leading efforts to prevent or cure disease, to alleviate poverty, to expand rates of literacy and numeracy, to address environmental and social concerns, to enlighten through culture, and to foster greater understanding among peoples.
New York State is home to approximately 80,000 charities that enrich communities and provide crucial services to residents across the state. New York's robust charitable sector also helps fuel the economy, generating over $150 billion in revenue annually and employing hundreds of thousands of New Yorkers.
Most charities in New York are comparatively small in size - most have revenues of less than $500,000 - and cannot afford to hire in-house lawyers or retain regular outside counsel. An estimated 80 percent of New York's nonprofits do not have in-house or outside general counsel. While many organizations exist to help needy nonprofits in various geographic locations and with particular missions, there are gaps in coverage throughout the state. Other nonprofits may not realize the extent and nature of their legal needs or may not know of the existence of training opportunities and pro bono services providers. As a result, many organizations do not receive basic legal advice on such topics as board governance or fiduciary responsibilities that would help ensure that assets are being efficiently used and that legal issues are properly identified and addressed before they become problems.
These charities, and the worthy causes and people they serve, deserve our help. As attorneys, we are charged not only with the duty to advocate on behalf of our clients, but with a special responsibility - as officers of the legal system - to serve the greater public interest. Like other businesses, nonprofit organizations require legal and governance advice from time to time. They are entrusted with public purposes and are indirectly subsidized with public dollars because of their tax-exempt status, and there is arguably an even greater public interest in ensuring that such organizations are well-governed, well-advised and compliant.
Issues of nonprofit governance and compliance are only becoming more complex as the regulatory scheme evolves. Moreover, in these uncertain financial times, charitable organizations need expert legal advice and support more than ever. The recession has placed additional financial pressure on nonprofits. Charitable giving and state tax revenues are down, leading to cuts in crucial sources of funding. This combination of factors has placed new legal demands on charities already lacking in financial ability to obtain needed advice.
To meet this need, the New York State Attorney General's Office has proposed a partnership with the New York State Bar Association to establish "Charity Corps" - an unprecedented joint initiative aimed at providing referral services for nonprofit governance and compliance matters to nonprofit organizations statewide. Charity Corps is an expansion of the Attorney General's ongoing initiatives to help improve nonprofits' awareness of and compliance with legal requirements, and to promote adoption of best practices. Partnering with key organizations around the state, the Attorney General's Charities Bureau has substantially expanded its educational programs and materials on such topics as registration and compliance, governance, fundraising, and mergers and sale transactions. It also created a new website, www.charitiesnys.com, with interactive features and new content to assist organizations in complying with their legal responsibilities.
The New York Pro Bono Landscape
Charity Corps will draw on the considerable expertise and networks of pro bono activity already in place at NYSBA, including the President's Committee on Access to Justice, Pro Bono Coordinators Network, and others. It will be additive and not competitive with existing service providers, such as:
Lawyer's Alliance. Lawyer's Alliance is the largest provider of pro bono legal services to nonprofit organizations in the United States. Lawyer's Alliance serves nonprofits in New York City, providing legal counsel on corporate structure and governance, tax, real estate, employment and other business and transactional law issues.
New York Lawyers for Public Interest. New York Lawyers for the Public Interest is a nonprofit, civil rights law firm that strives for social justice. Through its Pro Bono Clearinghouse, NYLPI matches New York law firms and corporate law departments with the needs of low-income clients and the nonprofit organizations that serve them.
Volunteer Lawyers for the Arts. Volunteer Lawyers for the Arts provides educational and legal services, advocacy and mediation to the arts community. VLA's Legal Services program includes a wide range of services including: the Art Law Line, a legal hotline; the VLA Legal Clinic for VLA members; in-house appointments with VLA staff attorneys; and pro bono placements for low-income artists and nonprofit arts organizations with one of over 1,200 volunteer attorneys.
Pro Bono Partnership. The Pro Bono Partnership is a coordination and resource center for legal professionals who would like to provide volunteer legal services to nonprofit organizations serving poor and disadvantaged populations. Its clients are organizations that work in the areas of health and human services, affordable housing, and neighborhood revitalization. The Pro Bono Partnership identifies and screens nonprofits with legal issues and matches these clients with volunteers from the corporate legal community and private bar. The program provides services in Connecticut, New Jersey, and New York (primarily in Westchester, Orange, Rockland, and Putnam Counties).
Community Development Project, The Legal Aid Society. Legal Aid's Community Development Project offers legal services to nonprofit organizations and unincorporated community groups on projects that revitalize low-income communities. The Project's attorneys offer counsel on issues related to not-for-profit organization and tax exemption, corporate governance, charitable compliance, fundraising, intellectual property, employment law, and real estate matters.
In its initial pilot year, Charity Corps aims to match up to 50 needy nonprofits in New York State with existing legal service providers, or if none is available, to recruit and train additional attorneys statewide to serve as outside pro bono counsel for nonprofits that cannot afford such counsel. Pro bono counsel would be primarily asked to provide counsel on nonprofit governance and compliance matters. They may also broaden their advice to include other matters if they elect to do so.
The initial "pilot" year will enable a leadership committee made up of lawyers experienced in this area to ascertain eligibility criteria, undertake training, marketing and communications efforts, establish metrics of success, and recommend follow-up steps. Toward the end of the first year, the overall success of the program can be assessed and its methods refined, enhanced and renewed.
Attorneys participating in Charity Corps will combine their experience in representing businesses together with training provided by the AG's Office, NYSBA and the existing provider network in order to bring nonprofit organizations and their counsel to new levels of sophistication and compliance - the better to serve their mission and the public interest. Program Details
Charity Corps will begin as a one-year pilot program involving a group of carefully selected founding law firms, legal service providers, clearinghouses and nonprofit organizations.
The Charity Corps Leadership Committee will be responsible for general program oversight. In the pilot year, the Committee will be chaired by Lesley Friedman Rosenthal, VP and General Counsel of Lincoln Center for the Performing Arts. Jason Lilien, New York Attorney General's Office Charities Bureau Chief will provide training and guidance to volunteer attorneys and participating nonprofits.
The Leadership Committee also includes:
- Marnie Berk, New York Lawyers for the Public Interest, Inc.
- Miriam Buhl, Weil, Gotshal & Manges
- Susan Chase, Legal Aid of New York
- Sean Delany, Lawyers Alliance for New York
- Stephen Falla-Riff, Legal Aid of New York
- Lisa Frisch, Legal Project, Albany
- Richard S. Hobish, Pro Bono Partnership
- Deirdre Hykal, Willkie Farr & Gallagher
- Tony Lu, Pro Bono Net
- Mark O'Brien, Pro Bono Net
- Ken Perri, Legal Assistance of Western New York, Inc.
- Michael Rothenberg, New York Lawyers for the Public Interest, Inc.
- John Sare, Patterson Belknap Webb & Tyler
- Douglas Sauer, New York Council of Nonprofits
- Michael Schachter, Willkie Farr & Gallagher
- Stacey Slater, Nixon Peabody
- Ronald J. Tabak, Skadden, Arps, Slate, Meagher & Flom
- David Watson, New York Council of Nonprofits
The Attorney General's Office will initiate and assist the program; however, in order to avoid conflicts of interest, the Office will not be involved in screening applicants, matching participating attorneys to clients, or overseeing these relationships. Responsibility for program administration will lie solely with the NYSBA and the Charity Corps Leadership Committee.
NYSBA will mainly be responsible for handling referrals, serving as an aggregator of information about upcoming events, such as trainings and CLE programs, and hosting the Charity Corps website.
Screening and Eligibility
Before a nonprofit organization is accepted into the Charity Corps Program, it will be required to fill out an application, called a Request for Assistance with Nonprofit Compliance and Governance. This form solicits basic demographic information about the organization and a brief description of the type of services requested.
Upon reviewing these applications, Charity Corps will first attempt to refer organizations to the existing network of legal service providers. If the organization cannot be served by an existing provider, Charity Corps will endeavor to match up to a total of 50 qualifying organizations with pro bono counsel from the private sector.
Criteria to be eligible include:
- 501(c)(3) charitable organization non-profit status. Start-up nonprofits, labor unions (501(c)(5) organizations), and 501(c)(4) civic service organizations are excluded from eligibility.
- Lack of in-house counsel and an inability to afford outside counsel. Participating nonprofits cannot have the means to afford counsel. Organizations will be required to disclose whether they pay or have paid for legal services; any indication that Charity Corps would supplant the services of paid counsel will render an organization ineligible for the program.
- No local affiliates of national nonprofits. For example, a local chapter of the Red Cross cannot participate in the program because it likely has access to counsel at the national level.
- No foundations, which presumably are founded by families or corporations of means.
- Other exclusions: Schools and religious institutions likely would not be invited to participate, at least in the initial pilot year, because of special regulatory considerations that would exceed the program's ability to provide training and supervision.
The application asks the nonprofit to describe its legal history and to indicate whether it faces any major regulatory or litigation matters that could threaten the validity of its tax exemption or ongoing corporate existence. The Leadership Committee will have discretion to reject applicants that it feels are seeking assistance on matters that are outside the scope of the program.
Training may be the most visible component of Charity Corps in its initial year due to the limited size of the pilot program. The NYSBA website will serve as an aggregator of information about existing trainings, with additional trainings scheduled as needed to fill gaps, either substantively or geographically.
Trainings on the following topics will be relevant:
1) Nonprofit Governance - including fiduciary duties;
2) Tax Exemption - issues relating to the organization's 501(c)(3) status; and
3) Charitable Fundraising Laws.
In addition, Charity Corps will encourage nonprofit board members to take advantage of NYSBA's People's Law School, which provides programs on legal literacy and topics of legal interest to non-lawyers.
Metrics and Monitoring
- Nonprofits and participating attorneys will fill out a questionnaire near the end of the pilot year, which the Leadership Committee will compile for a report that includes:
- Metrics for Year 1 - how many nonprofits served, how many trainings facilitated, improvement in compliance and governance of nonprofits, whether nonprofits are better serving their clients, and the satisfaction of the nonprofits and attorneys involved.
- Benefits such as enhanced ability to serve mission and comply with grant requirements.
- Program leadership will generally check in on pro bono counseling relationships three times per year.
While New York attorneys have a distinguished history of public service, we can do much more to fulfill our responsibilities as promoters of the common good.
Charity Corps will offer a unique and exciting way for law firms to fulfill their duty to the public.
Through Charity Corps, nonprofits lacking in regular guidance on nonprofit compliance and governance issues will be paired with attorneys drawn from the existing provider network and new volunteers from law firms who have been trained in nonprofit law and governance by seasoned experts. As a result, nonprofit organizations will be better equipped to comply with applicable law and spot issues before they become mission-critical problems.
Participating attorneys will benefit not only from the service itself, but from extensive client counseling experience, ongoing training and networking opportunities with leaders in the nonprofit law field, and public recognition of their participation in this unprecedented initiative.