How to Conquer the Top Legal Risks Facing Nonprofit Boards

Legal risks are not unique to for-profit organizations. Non-profits can find themselves in a variety of legal entanglements in they aren’t careful. The best way to prevent these risks is to understand them. From there, nonprofits can implement strategies to manage these risks. The following are the top legal threats facing nonprofit boards.

  1. Social media. All businesses rely on social media, nonprofits included. It provides a great outreach platform and can be an excellent networking tool. However, it also exposes nonprofits to legal risks. Copyright infringement of shared materials, privacy violations when researching employees, and even backlash from posts and comments by employees can hurt nonprofits.
  2. Tax status. In order to retain their tax-exempt status, nonprofits have to abide by certain restrictions. These rules affect income, programs, fundraising, and political activism. Nonprofits that don’t abide by the rules can incur fines or lose their tax-exempt status.
  3. Aligning policy with practice. Nonprofits establish mission statements and goals from the outset, but they need to be careful to work within those objectives. Nonprofits that govern in a way that doesn’t align with their mission statement open themselves up to risk. Nonprofits should review their operational documentation and requirements periodically to ensure that all employees are working in a way that aligns with the nonprofit’s mission.
  4. Bullying. This hot-button issue has garnered attention in schools and workplaces across the nation. With many states implementing the Healthy Workplace Bill, it is unlawful to bully an employee. Nonprofit organization leaders may think that bullying isn’t an issue that affects them, but statistics suggest otherwise. Upwards of 38% of employees report being bullied in the workplace. When it comes down to it, courts often hold nonprofit leadership and boards accountable for their employees’ actions. As such, nonprofits cannot afford to ignore this risk.

Nonprofits need to consider all of the legal risks facing their board members. Knowing the risks and taking steps to mitigate them can help protect nonprofits. SteelBridge can help your nonprofit assess its risks and develop strategies to manage them. Contact us to learn more.

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