Nonprofit Eligibility Requirements
Texas C-BAR offers a Pro Bono Legal Referral Program designed to connect eligible nonprofits and microenterprises with volunteer attorneys who provide free legal assistance on business, corporate, and legal matters that do not involve litigation. To be eligible for assistance, all organizations are evaluated under the following criteria and preferences.
- The organization is a nonprofit organization, unincorporated association, a 501(c )(3) nonprofit, or seeks to be one.
- The organization is governed by a diverse board of directors not related by family members or persons serving as both board members and paid staff.
- The primary mission of the organization, or significant outreach initiative, is to help low-income persons or to serve low-income populations.
- The organization lacks the ability to afford legal assistance or paying for legal services would negatively impact their charitable work.
Other factors which staff will use to evaluate eligibility include:
- the type of assistance needed;
- area of legal expertise required by the referral;
- availability of attorneys willing to volunteer at any given time;
- organization’s demonstrated impact;
- organization’s sustainability (reliability and viability);
- organization’s ability to work with volunteer attorneys;
- organization’s access to other pro bono resources; and
- whether or not the matter is likely to result in a successful outcome for the client.
Exceptions to the above guidelines require approval from C-BAR’s senior staff.
Additional Requirements for those seeking to file for 501(c)3 Tax-Exempt Status with the IRS:
The following specific factors are key to our ability to accept a request for assistance to file for 501(c )3 status with the IRS. In order to provide this assistance, we require that:
- The organization will serve a low-income population or community. Because we work with volunteer attorneys, we adhere to the requirements of the Texas State Bar and we therefore limit our services to nonprofits that work with low-income individuals or communities.
- The matter is “ready” for referral. Before we can refer a case to one of our volunteer attorneys, the nonprofit must be able to provide the following:
- A list of people who have agreed to serve on the board of directors and their qualifications. (Please note: Texas C-BAR only refers matters for organizations governed by a diverse board, not for those governed by related family members or by persons serving as both board members and paid staff.)
- A narrative description of the organization’s past, present, and planned activities. (A plan that outlines what programs the nonprofit intends to provide and describes the activities in which the nonprofit will engage. This is necessary because prior to beginning work on an application to the IRS an attorney must first assess a nonprofit’s proposed programs and operations to determine whether they qualify for tax-exempt status under the Internal Revenue Code).
- Information on your membership plan, benefits, and dues (if you have or plan to have members).
- A list of sources of financial support (historic, current, or projected).
- A description of your fundraising plan or programs (historic, current, or projected).
- Financial Statements or a three-year budget for the first 3 years of operations (historic, current, or proposed).
- A copy of your Certificate of Formation (do NOT file with the Secretary of State if you have not already).
- A copy of your Bylaws (if you have adopted bylaws).
- A copy of the minutes for your first meeting (if applicable).
- A copy of your EIN/ Employer Identification Number
- The organization demonstrates a strong base of community support and a strong likelihood of financial sustainability. Both because our work is performed by volunteer attorneys and because in our experience, organizations that begin with strong community support have the best chance of sustainability we ask that, in order to qualify for free legal services, nonprofits demonstrate this by:
- Showing a diverse board that does not include related family members or that does not have persons serving both as board members and paid staff (we recommend at least five board members),
- Showing collaboration with existing organizations and demonstrating that the services to be provided are not duplicating services already available, and
- Showing the strong potential commitment of funders for the organization. While many donors are not willing to provide financial support until tax exempt status is achieved, they are able to indicate whether a nonprofit’s proposed programs are those that are likely to be funded. We recommend that you meet with potential funders early, not to ask for donations necessarily, but to gauge their level of interest in the mission and purpose of the organization, and whether it is the type of organization that they would be willing to support. This also provides a networking opportunity with potential donors. If donors lack interest in the organization’s mission, obtaining 501(c )3 status will not cure this lack of interest. If the nonprofit is going to survive financially, it should cultivate potential funding sources early on in the process.
For additional information on applying for 501(c )3 tax-exempt status and assistance on how to get “ready”, please click on the following: