Can a 501c3 sue?


V

Vic Dura

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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S

Stuart A. Bronstein

Vic Dura said:
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
 
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P

Paul Thomas, CPA

Vic Dura said:
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.
 
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J

Jason Profit

Vic Dura said:
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.
 
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V

Vic Dura

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.
 
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S

Stuart A. Bronstein

Vic Dura said:
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
 
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Vic Dura <vpdura@CLUTTERhiwaay.net> 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

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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.
 

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