List how a charity's generative tool touches exempt-purpose limits
Key facts
- Human involvement
- RedLawyer-led
- How AI is used
- Quote each purpose clause and each description of what the tool will publish or decide, and place it beside the operational-test question it raises. Write no advice to the board and no policy.
- What the lawyer must review
- You write the advice to the board. Treasury Regulation § 1.501(c)(3)-1(a) requires an organisation described in section 501(c)(3) to be both organised and operated exclusively for one or more of the purposes specified in that section. Under the operational test, § 1.501(c)(3)-1(c)(1), an organisation is regarded as operated exclusively for exempt purposes only if it engages primarily in activities which accomplish one or more of those purposes, and it will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt purpose. Under § 1.501(c)(3)-1(c)(2), it is not operated exclusively for exempt purposes if its net earnings inure in whole or in part to the benefit of private shareholders or individuals. Under § 1.501(c)(3)-1(c)(3), it is not operated exclusively for exempt purposes if it is an action organisation, including if it participates or intervenes, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office. Section 501(c)(3) itself states the same campaign limit and the limit on a substantial part of activities being propaganda or otherwise attempting to influence legislation, except as subsection (h) provides. If the tool's output is a campaign statement or a legislative contact, that is the question the operational test asks. It is not a state nonprofit-statute duty. Model Rule 1.1 and ABA Formal Opinion 512 require competence and independent verification when you use a generative tool to prepare the advice, and Model Rule 1.6(a) requires informed consent before client information is put into a tool that will not keep it confidential. The Marketing Rule orders in SEC Release 2024-36 apply to investment advisers, and they are not applied to a charity here.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Perform the substantive analysis and decisions. Independently check any permitted supporting work and approve the exact output for its intended use. |
Checklist
- Review operative clauses in the complete document, including definitions, cross-references, schedules and inconsistencies with the instructions.
- Confirm that the actual tool, feature and processing terms permit use of this information, including access, retention, training and disclosure conditions.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.