---
title: "List how a charity's generative tool touches exempt-purpose limits"
url: "https://ailawframework.com/practice/not-for-profit-charities-and-associations/advise-a-charity-board-on-ai-governance-duties/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A35-B6-2-US"
practice_area: "Not-for-Profit, Charities & Associations"
tier: "red"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# List how a charity's generative tool touches exempt-purpose limits

> 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.

Canonical page: https://ailawframework.com/practice/not-for-profit-charities-and-associations/advise-a-charity-board-on-ai-governance-duties/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Not-for-Profit, Charities & Associations](https://ailawframework.com/practice/not-for-profit-charities-and-associations.md) |
| Human involvement | Red: Lawyer writes; AI may check, clarify or collect data |
| 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 | United States |
| Applies to | [Advise a charity board on AI governance duties](https://ailawframework.com/practice/not-for-profit-charities-and-associations/advise-a-charity-board-on-ai-governance-duties.md) |

## Checking plan

- What the AI does: 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.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- The section 501(h) expenditure-test election is named in the statute and the regulation. The dollar ceilings were not opened, so this list does not apply them.
- Do not treat an Australian charity-governance standard as the operational test.

## Sources

- [26 CFR § 1.501(c)(3)-1, organisations organised and operated for religious, charitable, and other exempt purposes](https://www.law.cornell.edu/cfr/text/26/1.501(c)(3)-1) (checked 2026-10-22)
- [26 U.S.C. § 501, exemption from tax on corporations, certain trusts, and other organisations](https://www.law.cornell.edu/uscode/text/26/501) (checked 2026-10-22)
- [ABA Formal Opinion 512, Generative Artificial Intelligence Tools (29 July 2024)](https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/ethics-opinions/aba-formal-opinion-512.pdf) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*