Harvard Law School Association
Club and Shared Interest Group (SIG)
501c3 & Fundraising Policy

 

The Harvard Law School Association (HLSA) has received several questions from HLSA Alumni Clubs and Shared Interest Groups (SIGs), regarding whether or not they should file for 501(c) (3)1 tax exempt status in the United States.  In order to respond to these concerns, the HLSA has prepared this general guidance to address these questions raised by the Clubs and SIG’s on this topic.  This guidance is not intended to provide professional legal advice but rather to raise some considerations and recommendations that each HLSA Club or SIG might consider in deciding its own organization structure and tax status.  The circumstances and local factual issues will be unique to each HLSA Club or SIG, and we hope this general guidance will assist in evaluating what tax status makes sense for each HLSA Club or SIG.
 

  1. Should my HLSA Club or SIG incorporate or not to open a bank account?

    The HLSA Club or SIG may need to open a bank account for its expenses and need a tax ID number for that.  In order to obtain a tax ID number, the HLSA Club or SIG does not need to file for tax exempt status. A tax ID number may be obtained by applying to the Internal Revenue Service (IRS) for it. Check the IRS website for details and tax ID application form. https://www.irs.gov/

  2. Should my HLSA Club or SIG file for tax exempt status under Section 501(c)(3) of the U.S. Tax Code?

    The HLSA does not prohibit HLSA Clubs or SIGs from filing for U.S. tax exempt status. It does strongly encourage each HLSA Club or SIG to seek local pro bono professional legal advice from a local attorney and tax expert.  This decision by the HLSA Club or SIG to become tax exempt or not for federal tax purposes may also raise other state or local tax implications depending on the jurisdiction.

    An individual HLSA Club or SIG can decide to file for 501(c)(3) tax exempt status for its own organization.  The HLSA will not be applying to get a general group exemption for all of the HLSA Clubs and SIGs. Each HLSA Club or SIG will be responsible for filing, updating and maintaining its own tax exempt status.

  3. HLSA Club and SIG fundraising policy. 

    Any request for direct funding that uses or refers to Harvard, Harvard Law School, Harvard Law School Association or HLSA must be pre-approved by HLS, as has been the policy and practice of the HLSA. 

    This advance collaboration with HLSA Clubs and SIGs is important in order to coordinate all HLS fundraising and sponsorship efforts at all levels regardless of tax status.  This centralized coordination helps maintain sponsor relationships and overview of all HLS and HLSA fundraising efforts.

    Regardless of exempt tax status, HLSA Clubs and SIGs may not engage in significant fundraising from individuals or any entities without advance approval and coordination with the HLS Dean for Development and Alumni Relations and his/her designate.

    Not all HLSA Club or SIG potential sponsorships need highly detailed information to be pre-approved, and not all sponsorship types require pre-approval.

    If an HLSA Club or SIG organizes a reception event and receives a modest in-kind donation from a law firm such as conference room space and refreshments, HLSA Clubs and SIGs need not seek pre-approval. If a sponsor provides funds directly to the HLSA Club or SIG for an event, HLSA pre-approval would be required.

    An HLSA Club or SIG that received (or intends to receive - even if not directly solicited) direct cash financial sponsorship, in any amount, from a corporate entity or law firm would require detailed information and advance approval and coordination with the HLS Dean for Development and Alumni Relations and his/her designate.

    Passive donations received by HLSA Clubs or SIGs (by a member supporting the Club or SIG), need not be pre-approved. HLSA Clubs and SIGs should inform the HLS Alumni Relations Office of each event, either directly or by posting the event information on the AlumniMagnet club/SIG website.

  4. How are my HLSA Club or SIG’s annual club allocations from HLSA and fundraising efforts affected by our decision to file or not for tax exempt status?

    Every HLSA Geographic Club and SIG is eligible to receive from HLSA upon application an annual allocation.  That allocation may or may not be affected by the Club/SIG’s fundraising efforts depending on its level of annual activity. If an HLSA Club/SIG chooses to conduct fundraising beyond the minor in-kind sponsorship for a particular event described above, then HLS will not provide any additional annual allocation money to that HLSA Club/SIG during the year in which it fundraises.  However, the level of sponsorships may be more advantageous for a very active HLSA Club/SIG than the modest annual allocation from HLSA, which that club may choose not to request and rely on its own fundraising for funding its many activities.  For questions about this policy, please contact hlsa@law.harvard.edu

  5. How can a HLSA Club or SIG get technical or legal advice on whether or not to apply for tax exempt status or to incorporate?

    HLSA cannot give legal advice to the HLSA Clubs or SIGs. HLSA understands that incorporation may provide certain benefits and advantages to obtaining such a status, such as liability shielding that is not available to an unincorporated group.  HLSA recommends that each HLSA Club or SIG seek local pro bono legal and professional tax planning advice on the best path to take for that particular group’s needs taking into consideration among other factors,  its level of activity and other local tax laws in that jurisdiction. HLSA recommends that the HLSA group select a locally licensed attorney who practices in that state or local jurisdiction and would be familiar with local applicable laws.
1This refers to U.S Tax Code, 26 U.S. Code § 501(c)(3) which covers tax exempt organizations in the United States generally, namely…. corporations,  organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes.  

 

Contact us...


Phone: 617-495-2425
Email: hlsa@law.harvard.edu