LK Education Bulletin

To: Tennessee School Districts

Date: October 25, 2007

Re: Help For Tennessee School Organizations Becoming Compliant with Tennessee’s Charitable Solicitations Act

From: Lewis King, Nashville Office

Chuck Cagle, Lewis King’s Educational Practice Leader announced today the formation of a new Charitable Solicitations Support Team. As a result of changes to Tennessee’s Charitable Solicitations Act which became effective July 1, 2007 many organizations that raise money directly through solicitation of donations or raffles for schools or otherwise are subject to this regulation.

In commenting on this recent change in the solicitations law Chuck noted that “most if not all school districts throughout the state will be impacted by this regulatory change.” Schools through their booster clubs and other volunteer guided support groups have in the past raised money to support a variety of sports and extra curricular activities. In the past these school support organizations have had little need for formal structure, were staffed almost exclusively by volunteers and record keeping and accountability were not a mandate. That has now changed. These organizations are now required to comply with the provisions of this law that include, among other things, the following:

§ Charitable fund raising groups may need to be organized as non-profit organizations if certain fund raising thresholds are met

§ Will need to file annual state fund raising activity reports

§ Enhanced internal record keeping

§ And, state compliance may trigger new or additional reporting with the Internal Revenue Service

We understand some school superintendents are adopting a wait and see approach to these changes in hopes that they will be modified or changed. We believe these new state requirements represent a significant shift in the way these organizations have operated and to become compliant by July 2008 will require planning and action by the leaders of these organizations and representatives of the school district sooner than later.

Lewis King in creating this new Charitable Support Team is pleased to offer its fee based support in helping these groups understand the requirements of the regulation and to become compliant. We believe having a knowledgeable dedicated attorney Team coupled with a design process and tools are critical elements in providing this service. Key steps in our process will include:

1. All Hands Organizational Meeting – as soon as possible after our selection and engagement acceptance a Lewis King attorney will schedule a meeting with the organization’s leaders and appropriate members. If possible a representative of the school district should be in attendance as well. The purpose of this meeting is two fold – to discuss the purpose of the organization, its size and fund raising activities and alternatives for structure and how each decision impacts future record keeping. Second is to reach a decision on structure and to gather the necessary information to allow the designated attorney to complete the organizational documents and state and federal filing forms. This all hands meeting will last anywhere from 2-4 hours depending on the size and complexity of the organizing entity.

2. Document Preparation And Filing – the information obtained in the all hands meeting plus any additional required data will be utilized by attorney to prepare draft documents and filings. A representative for the organization will need to be responsible for reviewing all draft documents prior to filing. Upon approval attorney will then file the documents with the state and federal agencies.

3. Post Organization Wrap Up Meeting – after the filings have been completed and submitted to the agencies attorney will schedule a Wrap Up Meeting with the leaders of the organization and appropriate members including if possible a representative of the school district to review the organizational structure that has been agreed to, discuss actions that will be necessary once the filings are approved by the state and federal agencies and to answer questions.

The Team we have selected includes Chuck Cagle our Educational Practice Leader whose entire practice day-in and day-out is committed to the various school districts throughout the state plus two associate attorneys selected for their interest in helping volunteer organizations. Isaac Connor, an associate in our Nashville office will assist organizations in Middle and West Tennessee. Isaac is active in several non-profit organizations helping our youth and is a former star basketball player at UT Chattanooga. Joe Ballard an associate in our Knoxville office will assist organizations in Middle and East Tennessee and is himself a former Maryville College basketball player.

At Lewis King we are committed to our local communities and are pleased to offer what we believe will be a cost effective and efficient service solution for helping these volunteer groups become compliant with the Tennessee Charitable Solicitations Act.

This release is an advertisement for service pursuant to the Tennessee Bar Rules and Regulations.