This book was conceived about 30 years ago; the conception remains a vividly memorable experience. Its genesis occurred during a speech I was giving before managers of relatively small nonprofit organizations. I had been assigned some esoteric topic on the law of tax‐exempt organizations and was about five minutes into my presentation when suddenly—to my chagrin—I realized, from the glazed‐over looks, that few people in the audience had the faintest idea what I was talking about. The remainder of them did not seem to care. Preservation instincts took over. The assignment was hopeless, so I abandoned my intended remarks. I literally threw my notes on the floor, at least generating—to my relief—a little laughter. Instead, we talked about what my audience really wanted to hear: some of the basics of the laws affecting nonprofit organizations.

The experience was not a measure of the level of intelligence of that particular audience; rather, it reflects the fact that those who manage nonprofit organizations—particularly the smaller ones—often lack understanding of the basics of the laws that regulate their operations and the legal problems that may be awaiting them in their blissful ignorance. A massive gap can exist between the program planning and the legal expertise of many of those responsible for the fate of nonprofit organizations. The law can either help them achieve their goals or prevent them from succeeding.

I was struck by the thought that there was a need for a book providing a basic summary of the laws that affect the operation of nonprofit organizations. The book I envisioned would have no citations or footnotes—just readable text.

I had no shortage of questions from my practice, speeches over the years, and (at that time) 21 years of teaching a law school course on tax‐exempt organizations. I began recalling and noting these questions and was surprised to realize how the same ones are asked again and again. Even though I have practiced law for nearly 50 years, I still find myself asked many of the same basic questions. This book has been written to provide answers to those questions.

The questions are fundamental and important, but they reveal tremendous confusion. The confusion is understandable: The law in this field is confusing—even overwhelming. Here is an example—an Internal Revenue Code provision pertaining to a point of law that is of importance to many nonprofit, charitable, and other exempt organizations (and perhaps my favorite IRC sentence): “For purposes of paragraph (3), an organization described in paragraph (2) shall be deemed to include an organization described in section 501(c)(4), (5), or (6) which would be described in paragraph (2) if it were an organization described in section 501(c)(3).” (This rule enables exempt social welfare organizations, labor groups, and business leagues to utilize supporting organizations.)

The ultimate purposes of this book are to decipher the Internal Revenue Code as it affects nonprofit organizations, to translate the intricacies of the law in these areas and try to make them understandable to non‐lawyer managers of “nonprofits,” and otherwise to help to close the gap between goals and knowledge in nonprofit organizations.

The law affecting nonprofit organizations is volatile. Ongoing change in this field of law is a constant, and many regulatory changes lie ahead. I have tried to make the book sufficiently general to withstand most of this change. Yet, once the basics in this field are grasped, some readers may want more detail and more current information. My monthly newsletter, Bruce R. Hopkins' Nonprofit Counsel (John Wiley & Sons), is intended to be a useful resource for keeping up with legal developments that affect nonprofit organizations.

A fictional “Campaign to Clean Up America” is used throughout as an illustration of how to organize and qualify a tax‐exempt charitable organization.

A change from prior editions of this book needs to be noted (pun intended). I mentioned earlier that this book, as originally envisioned, does not have footnotes. Over the years, there has been agitation (probably too strong a word) for the addition of footnotes, to provide the reader with citations to basic law. I resisted for a long time; this time around, I have succumbed. I must admit I like the notes, which I have tried to keep to a minimum; I think readers will find them helpful. (They can always be ignored if not needed.) This book is, after all, subtitled a “legal guide.”

No book is a substitute for good legal or other professional advice. Some managers of nonprofit organizations are afraid to seek advice—out of embarrassment for asking “dumb questions” or fear of the costs involved. An operator of a nonprofit organization may not even realize the presence of a legal problem. This book is intended to ease those fears and close those gaps.

My thanks go to my editor, Brian Neill, and to production editor Gayathri Govindarajan for their assistance and support in connection with this new edition.

BRUCE R. HOPKINS
Kansas City, Missouri
July 2017