Mark a draft grant application against the exempt-purpose limits
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- Place each activity the draft application describes beside the purpose clause it is said to further, and mark a sentence that promises a campaign activity, a private benefit, or a deductible contribution. Write no sentence of the application.
- What the lawyer must review
- You decide whether the application is sent and you write any sentence that is submitted. Treasury Regulation § 1.501(c)(3)-1(c)(1) regards an organisation as operated exclusively for exempt purposes only if it engages primarily in activities which accomplish one or more exempt purposes specified in section 501(c)(3), and not if more than an insubstantial part of its activities is not in furtherance of an exempt purpose. Section 1.501(c)(3)-1(c)(2) provides that it is not so operated if net earnings inure to private shareholders or individuals. Section 1.501(c)(3)-1(c)(3) treats an organisation that participates or intervenes in a political campaign, on behalf of or in opposition to a candidate for public office, as an action organisation that fails the operational test. The IRS exemption page states that organisations described in section 501(c)(3), other than testing-for-public-safety organisations, are eligible to receive tax-deductible contributions in accordance with section 170, and that an excess-benefit transaction with a person having substantial influence may result in an excise tax on that person and on any organisation manager who agrees to the transaction. A draft sentence that states a deductibility or a private-benefit outcome is one you check against those texts. ABA Formal Opinion 512 requires independent verification of generated output before it is relied on.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Potential support includes preparing preliminary structure or wording. Confirm the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Confirm instructions and personal circumstances through appropriate direct engagement. Have the responsible lawyer assess safety, capacity or vulnerability concerns and escalation.
- 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.