Can a 501c3 sue?

Discussion in 'Tax' started by Vic Dura, Dec 6, 2005.

  1. Vic Dura

    Vic Dura Guest

    Can a charitable 501(c)3 environmental organization initiate
    a lawsuit against a federal agency that the organization
    believes is violating the National Environmental Policy Act
    process, or are such lawsuits, like electioneering,
    prohibited to such organizations?

    For example, if the Sierra Club or Greenpeace or whoever has
    collected "charitable" donations, can those donations be
    used to pay for a lawsuit?

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    Vic Dura, Dec 6, 2005
    #1
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  2. Vic Dura <> wrote:

    > Can a charitable 501(c)3 environmental organization initiate
    > a lawsuit against a federal agency that the organization
    > believes is violating the National Environmental Policy Act
    > process, or are such lawsuits, like electioneering,
    > prohibited to such organizations?


    If it's within the scope of their charitable purpose, yes.

    > For example, if the Sierra Club or Greenpeace or whoever has
    > collected "charitable" donations, can those donations be
    > used to pay for a lawsuit?


    Depends, but probably.

    Stu

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2005) - All rights reserved. >>
    << ======================================================= >>
     
    Stuart A. Bronstein, Dec 8, 2005
    #2
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  3. "Vic Dura" <> wrote

    > Can a charitable 501(c)3 environmental organization initiate
    > a lawsuit against a federal agency that the organization
    > believes is violating the National Environmental Policy Act
    > process, or are such lawsuits, like electioneering,
    > prohibited to such organizations?
    >
    > For example, if the Sierra Club or Greenpeace or whoever has
    > collected "charitable" donations, can those donations be
    > used to pay for a lawsuit?


    Of course they can.

    --
    Paul Thomas, CPA


    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2005) - All rights reserved. >>
    << ======================================================= >>
     
    Paul Thomas, CPA, Dec 8, 2005
    #3
  4. Vic Dura

    Jason Profit Guest

    Vic Dura <> wrote:

    > Can a charitable 501(c)3 environmental organization initiate
    > a lawsuit against a federal agency that the organization
    > believes is violating the National Environmental Policy Act
    > process, or are such lawsuits, like electioneering,
    > prohibited to such organizations?


    You're asking two separate questions. A charitable
    organization can hire a lawyer to file a summons and
    complaint just like you or I. No rule against that.

    Then, do they have "standing," which is the legal term for
    "right to sue," more or less, as to the particular actions
    complained of. In other words, you would not have standing
    to sue Microsoft for anti-trust violations, even though in
    some way you may have been harmed; the link between
    Microsoft and the harm to you is just too remote or tenuous.
    You wouldn't have standing, and your case would be thrown
    out after MS made a Motion for Dismissal.

    Whether Greenpeace could successfully defend against a
    Motion for Dismissal on any specific matter would require a
    great deal of research into the particular facts and law.
    Actions against federal agencies are almost certainly
    governed by the Administrative Procedures Act, or some like
    statute. I really don't know; this is a rather arcane area
    of the law.

    > For example, if the Sierra Club or Greenpeace or whoever has
    > collected "charitable" donations, can those donations be
    > used to pay for a lawsuit?


    Good question. If the lawsuit was in furtherance of the
    501(c) charter and purpose, probably. But I really don't
    know. Interesting question though. Would you pay to have
    me do the research and draft you a written response? It's a
    pretty specific question, so I'm figuring a couple of
    hundred bucks would be fair.

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2005) - All rights reserved. >>
    << ======================================================= >>
     
    Jason Profit, Dec 8, 2005
    #4
  5. Vic Dura

    Vic Dura Guest

    Jason Profit <> wrote:

    >> For example, if the Sierra Club or Greenpeace or whoever has
    >> collected "charitable" donations, can those donations be
    >> used to pay for a lawsuit?


    > Good question. If the lawsuit was in furtherance of the
    > 501(c) charter and purpose, probably.


    That's the central issue of the question. The organization
    in question is a local non-profit environmental group. The
    will be applying for 501c3 status in 2006. They are well
    aware that they would not be able to spend donations that
    they receive to support their "environmental education"
    efforts to effect the outcome of any kind of election (vote
    for this candidate, not that candidate or vote for this
    issue, but against that issue, etc).

    However part of their charter is to "...protect local
    environmental resources.." and as part of their efforts they
    are considering bringing suit against a federal agency for
    violating provisions of the National Environmental Policy
    Act (NEPA) procedures. The environmental group does have
    standing as they submitted comments during the public
    comment period. That establishes standing.

    The big question is, if they receive 501c3 designation, does
    that preclude them from using donated funds to pursue such a
    suit, as it would preclude them from "electioneering"?

    > But I really don't
    > know. Interesting question though. Would you pay to have
    > me do the research and draft you a written response? It's a
    > pretty specific question, so I'm figuring a couple of
    > hundred bucks would be fair.


    Thanks. We might indeed contact you to do just that. We'll
    check with our lawyers first to see if they already have an
    answer but we will probably want a reality check on whatever
    they tell us.

    --
    To email me directly, remove CLUTTER.

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2005) - All rights reserved. >>
    << ======================================================= >>
     
    Vic Dura, Dec 9, 2005
    #5
  6. Vic Dura <> wrote:

    > The big question is, if they receive 501c3 designation, does
    > that preclude them from using donated funds to pursue such a
    > suit, as it would preclude them from "electioneering"?


    No, I don't think so. Section 501(c)(3) says a to qualify
    as a charity the following must be true:

    "no substantial part of the activities of which is carrying
    on propaganda, or otherwise attempting, to influence
    legislation (except as otherwise provided in subsection
    (h)), and which does not participate in, or intervene in
    (including the publishing or distributing of statements),
    any political campaign on behalf of (or in opposition to)
    any candidate for public office."

    I'm aware of no prohibition against engaging in lawsuits.
    In fact, many such organizations do so, all apparently
    without any problems.

    Stu

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2005) - All rights reserved. >>
    << ======================================================= >>
     
    Stuart A. Bronstein, Dec 12, 2005
    #6
  7. Vic Dura

    Ruth Logan

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    I know of a 501(c)(3), pure public charity, that serves Native Americans in the U.S. They have been approached by a foundation who wants to donate money to the nonprofit for purpose of supporting Native Americans involved in Standing Rock (like the DAPL) resistance, camping on land to try to stop pipeline and to help them pay legal fees when arrested. Is it legal for the nonprofit to accept the money and use it to help pay legal feels of Native Americans involved in the resistance, including law suits against Federal government? I will pay a couple hundred if someone will research this for me. This organization has provided shelter, food, clothing and other assistance (no lobbying etc. but has provided for basic needs) of Native Americans camped to resist pipelines.
     
    Ruth Logan, Mar 15, 2017
    #7
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