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Celia Roady Celia Roady says she considers herself a very lucky person. “I love what I do,” says the Morgan, Lewis & Bockius partner, who describes her work representing tax-exempt organizations as “using U.S. tax laws to accomplish good things.” With a client list that encompasses the Smithsonian Institution, the Pew Charitable Trusts, the National Geographic Society, and the Ford Foundation, Roady, 53, is widely regarded as one of the nation’s leading experts on the tax issues of nonprofit organizations. “Her advice has always been excellent,” says Marianne Roderick, president of the National Merit Scholarship Corp., who has worked with Roady for 20 years. “She consistently exemplifies the very highest qualities of character and integrity.” Roady estimates that she spends about 40 percent of her time on tax planning, advising clients on issues such as how to structure new ventures. For example, she assisted the Pew Charitable Trusts with the creation of the Pew Research Center. Established as a subsidiary in 2004, the research center is a nonpartisan source of information on public policy issues, attitudes, and trends. Roady’s tasks included incorporating the center as a legal entity, completing the lengthy Internal Revenue Service application for tax-exempt status, answering IRS questions, and, as she puts it, “helping the organization develop the right kinds of policies and procedures going forward.” Universities make up another significant part of Roady’s client base. “I call on her for some of the most sensitive and difficult issues,” says Dennis Blumer, general counsel of the George Washington University. “Celia knows how to explain complex issues crisply to her clients. Her advice is always understandable and authoritative.” Roady often advises universities and other tax-exempt organizations on determining what constitutes unrelated business taxable income � that is, income from business activities that is taxable because the activities are not substantially related to the organization’s tax-exempt purpose. For example, she explains, if a college had a fitness center, it wouldn’t pay tax on the income it earned from student and faculty memberships, but income from memberships sold to the general public would be taxable. “The key,” Roady says, “is knowing about it ahead of time � whether you’re going to have to pay tax or not.” Issues of unrelated business income are a significant concern for the Smithsonian, which has turned to Roady as its primary outside tax counsel for more than 10 years. “She is extremely knowledgeable, but just as important, she’s very practical in her advice,” says Marsha Shaines, the Smithsonian’s deputy general counsel. “She’s not simply telling us what the law is. Her advice is very applicable to what we do.” Economic revitalization projects are another area close to Roady’s heart. She advises private foundations that want to make investments in for-profit businesses to help revitalize distressed communities. Tax laws require private foundations to make “prudent” investments. But an exception exists for “program-related investments” � for example, a below-market loan to build a grocery store in a blighted neighborhood. The question is whether such an investment is charitable enough: Will it result in sufficient job creation or economic development? Determining “where to draw the line is when the tax lawyer comes in,” Roady says. A 1976 graduate of the Duke University School of Law, Roady also earned an LL.M. in tax in 1979 from Georgetown University Law Center. Upon graduating from law school, she joined the now-defunct D.C. firm Ginsburg, Feldman and Bress, where she remained for 18 years until moving to Morgan, Lewis in 1994. One of her first assignments as a new associate, Roady says, was for the Ford Foundation. “I found the issues so interesting,” she recalls. “After that, I tried to do all the tax-exempt organization work that I could find.” A growing area of that practice focuses on corporate governance. While charities are not now required to comply with the Sarbanes-Oxley Act, many are choosing to follow provisions such as the creation of an independent audit committee. Senate legislation that would tighten oversight of charities is expected to be introduced this year. Roady was part of a group tapped by Sen. Charles Grassley (R-Iowa) to make recommendations for strengthening the governance, transparency, and ethical conduct of charitable organizations.

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