Tax Exempt Organizations


Clark Hill has one of the largest, most extensive, tax-exempt and charitable organizations practices in the Midwest. Our attorneys have many years of experience in representing a wide variety of tax-exempt organizations - among these, private foundations, community foundations, professional and trade associations, civic and social welfare organizations, art and cultural institutions, health care and community mental health organizations, colleges and secondary schools, economic development corporations, human service agencies and religious groups. This practice involves a full range of services including advice about the regulation of tax-exempt organizations by state and federal authorities, filing for and obtaining exempt status from the Internal Revenue Service, the treatment of unrelated business taxable income, director and officer liability issues, corporate governance, lobbying and political activities, and all aspects of organization and operations. Clark Hill attorneys are recognized experts having written books and articles and lectured extensively on tax-exempt organization law.

Arts and Cultural Institutions

We provide legal services to various arts and cultural institutions, among them The Henry Ford (Greenfield Village and Henry Ford Museum) and the College for Creative Studies. Services for these organizations have included the preparation and qualification of employee benefit plans, addressing employment law concerns, attending to real estate matters, creation of endowment and capital campaigns and assistance regarding the regulation of fundraising activities.

Community Foundations

The firm also represents a number of community foundations in the Midwest region. Services for these organizations have included the establishment of new community foundations, assistance in the creation and use of component funds, advice on issues relating to affiliation with other community foundations, establishment of scholarship funds, advice regarding asset-building techniques and planned giving programs. We have played a prominent role in developing the use of supporting organizations by community foundations and have helped create uniform documents and policies for use by Michigan community foundations.

Economic Development Organizations

Clark Hill has demonstrated its commitment to the City of Detroit and its social and economic rebirth through the Firm's involvement in the federal Empowerment Zone project and other economic development programs. Our attorneys have worked with the City of Detroit Administration and various civic organizations including Detroit 300 Conservancy, Downtown Detroit Partnership, Inc., Motor Cities National Heritage Area and Detroit Economic Growth Corporation in connection with these projects. We represent and have performed substantial services for the Empowerment Zone Development Corporation.

Health Care Organizations

Our clients include many health care and mental health organizations. Our ongoing services to these organizations include advice about regulatory matters, corporate and contractual matters and employment law. We have also assisted clients with major corporate reorganizations. We incorporated, obtained tax-exempt status and serve as general counsel to the Michigan Health Endowment Fund.

Private Foundations

The firm represents many of the largest private foundations in the State of Michigan. As the home to some of the most prominent private foundations in the country, our state plays a leading role on the national scene among organizations of this kind. One client, the Council of Michigan Foundations, is the largest regional association of grantmakers, and has wide-ranging influence among its peers.

Our attorneys participate in many workshops and educational activities sponsored by the Council. Duane L. Tarnacki is the author of four editions of Establishing a Charitable Foundation in Michigan, a widely used handbook for creating private foundations and public charities. In addition, Clark Hill attorneys have written numerous other publications and articles and lecture frequently on subjects of interest to private foundations and community foundations. Our work for private foundations has included general corporate advice and services, preparation or review of information returns, advice about self-dealing issues, the excess business holding rules and other prohibited transactions, negotiation of sales of blocks of securities, negotiation of financing transactions in connection with economic development grants, compliance with expenditure responsibility requirements, and addressing board member and volunteer liability concerns. We also have extensive experience in advising foundations on the legal aspects of alternative investments and economic development activities.

Trade and Professional Associations

We represent many trade and professional associations as well, including the Michigan Manufacturers Association, Association of Businesses Advocating Tariff Equity ("ABATE"), Automotive Industry Action Group, American Society of Employers, Accounting Aid Society, the Engineering Society of Detroit and Council of Michigan Foundations. Our representation of these organizations includes advice relating to group insurance programs, state and federal regulation of lobbying activities, and antitrust concerns with regard to setting industry standards, restricting membership, and exchanging information about markets and industries. We have assisted many association clients with establishing for-profit service subsidiaries as well as charitable supporting organizations.

Other Tax Exempt Organizations

We represent a host of tax-exempt organizations that do not fit into any clearly definable category, such as the Michigan Humane Society, Lutheran Social Services of Michigan, Lutheran Child & Family Services and YMCA of Metropolitan Detroit.

Clark Hill attorneys have been proactive in legislative efforts affecting nonprofit organizations through their participation in the Nonprofit Corporation Committee of the State Bar, various ABA committees and the Government Relations Committee of the Council of Michigan Foundations. Our attorneys participated in the preparation of comprehensive changes to the Michigan Nonprofit Corporation Act and helped develop and refine key legislation limiting the liability of volunteer directors and trustees. We frequently advise individual clients, as well as charitable organizations, with regard to charitable giving. Much of this work relates to planned giving techniques, such as charitable remainder and charitable lead trusts, pooled income funds, charitable gift annuities, installment bargain sales, the use of private foundations and community foundation component funds, and income and estate tax implications.


Representation of non-profit corporations in a wide array of zoning and land-use matters.

Counsel to a large not-for-profit community mental health services corporation in the successful out of court restructuring of its secured and unsecured indebtedness

Corporate formation of non-profit entities.
Represented corporations regarding obtaining §501(c)(3) status.
Prepare corporate governance materials and advise Board members on compliance with fiduciary duties for both for-profit and non-profit organizations.
Represented non-profit hospital in a conversion to for-profit status.
Counsel to a financial institution in connection with the structuring, negotiation and documentation of a $5,500,000.00 revolving credit facility provided to a non-profit corporation in order to refinance existing obligations and provide general working capital to the corporation. The credit facility is secured by a general blanket lien on all assets of the corporation, including the Federal Communications Commission ("FCC") commercial and non-commercial broadcast licenses with respect to the corporation, as well as the proceeds of any sale of such licenses. The credit facility involved unique issues with respect to the ability of lenders to take a security interest in FCC licenses, as well as issues with respect to a non-profit borrower
Drafted and revised corporate bylaws.
Documented corporate reorganizations for affiliated corporations.
Counsel to the lender in connection with secured bank-qualified and non-bank qualified credit facilities for a private, non-profit assisted living facility operator, the proceeds of which were used to refinance existing indebtedness and for providing working capital.
Counsel to the lender in connection with secured bank-qualified and non-bank qualified credit facilities for a private, non-profit assisted living facility operator, the proceeds of which were used to refinance existing indebtedness and for providing working capital.

Counsel to several private, independent schools and to their tax-exempt foundation arms.

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