Davis Polk tax partner Mario Verdolini and Pro Bono Counsel Nancy Marchand recently discussed the firm’s pro bono work with tax-exempt organizations. Mario leads a cross-practice – and often cross-border – Davis Polk team that helps an array of nonprofit organizations set up the tax structures needed to successfully address community needs.

Even before he went to law school, Mario was active in assisting nonprofits. He has built upon that passion throughout his career, having worked with hundreds of diverse organizations. 

“All nonprofits we work with address some kind of community need,” Mario said, from assisting disadvantaged individuals to addressing racial injustice to supporting the arts. In addition to setting up new nonprofits, the team works with existing nonprofits, government organizations and other not-for-profit community projects. He described working with a woman who gives tens of thousands of gifts out to children of families who can’t afford them. “She’s been doing it alone for years, but it became so large that she incorporated,” Mario said. “The gifts are for holidays, birthdays, achievements – it’s so important for children to receive recognition for the special events in their lives.”

Cross-practice and cross-border

Like most other teams at Davis Polk, the lawyers work across practice groups to tackle these nonprofit tax matters. “Setting up a new nonprofit is a great opportunity for corporate and tax lawyers to work together on a pro bono matter,” said Nancy, a longtime Davis Polk lawyer who joined the pro bono team in 2020 to focus on the corporate side of nonprofit work. “It fits right into the firm culture of strong cross-departmental collaboration.”

The nonprofits are based around the United States, but also all over the world – Italy, Ethiopia, Germany, Guyana, Israel, the UK and other countries. Working cross-border comes with its own set of challenges. Davis Polk corporate and tax lawyers are currently helping a number of pro bono clients outside the United States set up new U.S. nonprofit corporations relating to their missions. This includes a Florence-based research and cultural center fostering understanding of Black history and a group of educators focused on global peace.

“Setting up a corporation can be complicated, particularly if there are cross-border aspects,” Mario said. The team has to consider corporate governance, bylaws, environmental issues and more. “When a corporation is tax exempt, there are limits to what it can and can’t do.”

Diverse causes

Davis Polk takes on tax and corporate work for nonprofits with an array of different causes, including issues at the forefront of society right now. Mario and his team are assisting a new organization devoted to eliminating violence and discrimination against Asian American and Pacific Islander (AAPI) individuals, including by conducting surveys to better identify issues in the current climate.

Mario and Nancy are constantly connecting with up-and-coming nonprofits with the potential to make positive change. The team recently began working with an environmental nonprofit helping set up solar energy centers in communities across New York. “The founders have been working for nearly a decade on improving solar energy,” Mario said. As we spoke, the team was also preparing for a call with New York City business leaders setting up a nonprofit to improve access to capital for Black-run businesses.

“Nonprofit founders are passionate about what they do,” Nancy said. “If we can help them take care of tax and corporate formalities, they can focus more effectively on their missions.”

Learn more about Davis Polk’s Pro Bono program.