Pro Business

Diehm offers an example of an organization needing help with incorporation. “[The founder of] a nonprofit called Sew Much Comfort, which makes adaptive clothing for wounded soldiers, was looking through the Super Lawyer listings and recognized a lawyer at our firm from a business transaction she’d been involved in,” she says. “She called, and we were able to guide them through the early questions—do we qualify to be a 501-c3, or are we more of a 501-c4? We helped set them up as a nonprofit corporation under Minnesota law, and then we walked them through the IRS application and the process of trying to get tax- exempt status.”

Faegre & Benson gave other kinds of startup assistance to Tam-Tam’s African Restaurant in Minneapolis. The Neighborhood Development Center referred immigrant Stephen Kaggwa to the law firm so he could get assistance launching his Cedar Avenue eatery. He received help with entity formation, contract review and negotiations, zoning and licensing, loan review and documentation, and real estate transactions.

Similarly, Orono-based nonprofit Hope Chest for Breast Cancer came to Faegre for help in establishing a separate for-profit entity to operate retail stores in Wayzata and St. Paul. The stores sell new and used furniture, and a portion of the proceeds goes to the Hope Chest for Breast Cancer Foundation, which distributes funds to underinsured breast cancer patients. Since the initial two-store deal, the law firm has continued to represent the charity as it develops a retail franchise system and increases its fundraising goals.

In addition to startup issues, nonprofits often run into problems maintaining their tax-exempt status. Many nonprofits get into payroll tax jams, or need a lawyer’s help to clarify their volunteer policies.

“I would say the majority of our work for nonprofits is to assist with governance and employment issues,” Wandzel says, “because nonprofits are run by boards [who are] usually volunteers, that may or may not have expertise. Sometimes they get into some issues that they are not comfortable dealing with, so they come to us to help make sure that they are following the bylaws, following the IRS regulations, and dealing correctly with employment issues.”

Our hope is always that what we are doing is laying a good foundation for businesses to grow and become successful.

Occasionally, small-business and nonprofit matters end up in litigation, and there’s pro bono help available for that, too. Emily Duke, a shareholder at Fredrikson & Byron, recently handled a taco trailer’s dispute with the St. Paul City Council.

“Mi Pueblito is a trailer that sells tacos in East St. Paul,” she says. “The city council took some adverse action on the owner’s license. It was actually an extremely complicated business licensure and zoning issue, and it also involved some complicated state delegation of licensing to the city. I handled the appeal, and we won. The people who run these businesses count on the income to survive.”

Diehm says Winthrop & Weinstine is (as of this writing) helping the Hmong-American Partnership resolve a license issue with the City of St. Paul. “We’re just trying to help protect their rights and make sure that they are being treated the same as all of the other organizations and license holders within the city,” she says.