Preventing Liability and Risk for Nonprofit Leaders

The leader of a nonprofit that primarily employs social workers asked “how can we protect our nonprofit from risk?” The attorney paused and said “Don’t do any work. Don’t serve anyone in an at-risk group at all, ever.” Many of us in the nonprofit community find his response ridiculous and a little funny. But there’s a grain of truth to it. There is inherent risk in the work of any nonprofit that serves vulnerable populations. But there are ways to increase safety and decrease risks that don’t involve stopping your important work. Let’s be honest, mistakes and wrongdoing happen. But having the right policies, insurance and training in place can reduce the frequency and severity of these issues, which can save a nonprofit thousands and keep people safe. So today, let’s break down a few ways to increase safety, decrease nonprofit liability and keep you doing missional work. Keep in mind, these are a few general tips. If you have specific questions about your nonprofit’s unique needs, please contact us.\

1. Identify Potential Risks 

First thing’s first, to prevent risk, you need to identify the sources of risk in what you do. Essentially, you need to be able to ask yourself about the worst case scenarios when it comes to your programs, staff, and clients. This is easier said than done. 

As an example, let’s take a program that teaches teens about outdoor skills, like fishing, building a fire, hiking, and camping. There are some obvious risks to this program– a teen spraining an ankle on a hike or a group getting stuck outside in a storm, for example. But what are the qualifications for the adults supervising the program? Do they need any special sort of training or certifications if an emergency situation arose? And what is the ideal ratio of teens to adults? Are both genders camping in the same area? What happens if one teen harms another? 

Often when you’re working in a particular program day-in and day-out, you become desensitized to some of the risks. So when you’re identifying risks, it can be useful to have an outside third party help you assess risk like a board member or a trained attorney.

There are inherent risks anytime you’re working with a vulnerable population like children, animals, the elderly, the disabled, or people who are vulnerable due to their current or previous circumstances like refugees or victims of a crime. Identify the risks of working with the specific group(s) your nonprofit serves. The risks you identify in this step will help inform the rest of the process, especially creating safety policies.

Another area that people miss when we talk about potential nonprofit liability? Their board. The board member who never comes to meetings and greenlights everything could actually be opening themself up to unnecessary liability if something goes wrong. Or a well meaning, but ill-informed board member can be a nonprofit liability magnet too. We have an entire article on board liability specifically because it’s a topic that needs to be talked about more in the nonprofit community. 

2. Create Appropriate Documentation 

After you’ve identified the risks, it’s time to prevent or reduce them as much as possible. You’ll need to create policies that increase safety and reduce nonprofit liability if something bad were to happen. The type of documentation you need will be dependent on your organization’s unique risk profile, but let’s cover a few common documents nonprofits might need:

Volunteer Policies & Agreements 

If your nonprofit has volunteers of any kind, you’ll want to outline what the standards are for volunteers. Your volunteer policy should depend on the type of responsibilities and expectations you have for them. Volunteers who work directly with clients will obviously have different standards than those who are sorting a room of donated food. Here are a few things to think about including in your volunteer policy:

• Sensitive Information: Volunteers who work directly with clients or who work with any sort of client data will need to maintain confidentiality if you work with sensitive information. This is especially important if you work in a field like domestic violence intervention, where client safety could be jeopardized by information becoming public. Also keep note of which of your online systems volunteers have logins to. If a volunteer with login access to sensitive information stops volunteering, it’s wise to change the login information.
• Social media: Speaking of public information, will you allow volunteers to post about your organization online? You can absolutely ask them not to post sensitive client information or photos of clients. You are also well within your rights to ask volunteers not to disparage the organization on social media if you so choose. Reputational harm and lost donations are real consequences some nonprofits are facing from wayward volunteers posting unkind things about them on social media.
• Dress code: If there are potential safety hazards related to clothing, you’ll want to be sure volunteers are dressed appropriately. Those volunteering in a lab, for example, often require close-toed shoes. Those volunteering by building homes will likely need hard hats or goggles when in an active construction zone.
• Emergency situations: If there is a medical or mental health emergency while volunteers are present, how should they handle it? Is this a common enough scenario that you’ll require your volunteers to have some form of training like being trained in CPR or suicide prevention?
• Background checks: Do you require some or all of your volunteers to get a background check? This is especially common for volunteers working directly with children or victims of crime to ensure maximum safety.
• Training and/or Certifications: Are you volunteers required to gain a certification or get initial training before volunteering? And if you do require training initially, will you require any sort of annual training to keep information fresh? We’ll discuss more about training below, but requiring a certain number of hours of training is fairly commonplace to ensure the standards of your program are kept.
• Disciplinary policy: If a volunteer does not abide by the policy, how will they be corrected or warned? If they violate the policy repeatedly or in a major way, will they still be eligible to volunteer for your organization again? Making your position on policy violations clear is helpful for everyone. 
• Donations & Money: Do volunteers handle money at fundraising events? What are the policies for handling checks and money? Having a two touch system is always wise. You never want one volunteer to be solely responsible for money. So make it clear who is allowed to handle cash and checks, how they are documented and who provides the extra layer of security by double checking.

This list is not exhaustive, but should start your journey in thinking about what you will require of volunteers. Beyond having a policy, all volunteers need to read it, be trained on it, and sign off on it, saying they will abide by your policy. Keep signed volunteer agreements on file in case anything happens. If a volunteer comes back and tries to take legal action, but you can show they agreed to and violated your policy, their legal action is much less likely to result in an expensive lawsuit.

Employee Handbooks

Similar to the standards for volunteers, you’ll also want an employee handbook that outlines your policies for employees. Your employee handbook should be reviewed and signed by each employee on their start date, stating they will abide by policies. Save it in a secure location (even better if it’s on the cloud) so you can have it at any time an employee dispute or issue arises. Employment cases are often some of the most common and expensive issues to deal with when they arise, so having solid policies and documentation is key.

Your employee handbook can cover much of what we’ve mentioned above in the volunteer section, but for employees, there are some additional considerations. In addition to the basics of an employee handbook like PTO policies, think about including information about:

• Use of personal technology: Are employees allowed to do confidential work on their personal computers? What about sending texts or making calls from their personal cell phone that are related to confidential work information? Can employees text clients on their personal phones?
• Sexual harassment, violence in the workplace, etc.: This is pretty self-explanatory. Explain what kind of conduct is inappropriate in the workplace and be sure to include if threats of violence or harassment are against your policy as well as direct actions. 
• Uses for company credit cards: If any of your employees have access to a company credit card, you’ll want a policy or how those can be used permissibly and what is not permissible. You’ll also want a way to check transactions to ensure they are permissible. Not paying attention can be a costly mistake in this area, where we’ve seen employees spend the nonprofit’s limited funds on personal items.
• Complaint and Whistleblower: You’ll need a clear policy for how employees should handle any sort of grievances like harassment, discrimination, etc. It’s wise to outline the procedure so if anything were to happen, your employees will have a clear roadmap for taking the proper action– from how to report, who to report to and what will happen when things are reported. Often, these situations can be resolved internally without legal action or anyone posting about it on social media. Solving these situations internally when possible and appropriate can save the organization thousands of dollars and a PR nightmare.

Facility Use Policies & Agreements

If your nonprofit has a building or rooms you allow to be rented out or used by different people, having a facility use policy and agreement can help protect the nonprofit’s property. Think through: if something is damaged, who is responsible for paying the price to fix the damage? This is especially important for places like community centers and churches who frequently rent space to people for events. 

When you’re entering into an agreement with someone looking to use your facilities, be sure to explicitly state in the agreement the day(s), time and purpose they are authorized to use the space. But you should also think through the types of activities people will not be able to conduct in your space– like illegal activities or activities that are counter to your mission– in order to protect your tax exempt status. Be sure you include provisions in the agreement that outline the safety standards you expect them to uphold. For example, if children are present, they will need to be supervised by adults and the ratio of children to adults needs to be in-line with your safety policy. 

Additional Safety Policies

Each nonprofit is different. The safety needs of an organization serving refugees will be different from the needs of a youth sports league. It’s always good to think through: What could go wrong? And what should our staff, volunteers and clients do if something does go wrong? Those two questions can help you think through more program-specific considerations. Another way to approach safety? Think through the who, what, where, when and how of each program. What risks are present in each aspect?

If you need assistance in creating the right safety policies for your specific programming, please contact us. Our experienced attorneys are happy to help craft documents that can reduce nonprofit liability and risk.

3. Check your Coverage 

When was the last time you did a deep dive into what your insurance covers and what might be left out in the open? Insurance is critically important for nonprofit organizations. Good insurance coverage can save your nonprofit thousands if something happens. Sit down with an insurance broker who has experience working with nonprofits (especially anytime you have a major update to your organization or programs). They can help you learn what kind and how much coverage your nonprofit could benefit from, including:

• General liability and property (highly recommended for all nonprofits)
• Worker’s compensation (required by law if you have employees)
• Director and officer (highly recommended for all nonprofits)
• Special events 
• Employment practices liability 
• Cybersecurity (if your nonprofit has any sensitive data digitally like client information)
• Errors and omissions (also called malpractice insurance)
• Etc.

While everyone hopes they won’t need to use their insurance, it’s actually incredibly common for nonprofits to make a claim on their insurance, especially when it comes to employee-related matters like wrongful termination. Be sure that your nonprofit is covered before you truly need it.

4. Train, Train, Train 

Policies mean nothing if people don’t consistently carry them out. Train new staff and volunteers on your policies. Even better, refresh their memories every so often with any updates or reminders quarterly to ensure best results. Great training increases the likelihood of policies being followed and can improve your staff and volunteers’ ability to carry out programming in a safe and effective way.

Methods of training depend on industry. As a best practice, go beyond just handing volunteers or staff the policy to read. You can (and should) give them access to the policy to review and agree to, but you should also do some webinar or in-person training as well. Training over webinar can be a convenient way to train multiple people at once for tasks like clerical work. But if your duties are primarily in-person, train in-person if you’re able. It’s best to mimic the setting of how that staff member or volunteer will be operating on a regular basis. Having new volunteers or employees shadow someone who has been with your organization for a while can also be an effective training method, provided your existing people already follow policies.

Be aware of any required or best practices training if you’re engaging in work like therapy or medicine. Don’t assume that employees who come in with years of experience in your field will know exactly how your organization operates. It’s better to “over train” than under train. 

If it feels like you’re repeating yourself a lot during training, you’re probably doing it right. Rarely do people absorb information the first time it’s presented to them. Have you ever met people at an event and forgotten their name a few minutes later? It’s the same phenomenon. People won’t remember every single piece of training you give them the first time you say it. Repeated exposure can help people remember and put the proper procedure in place, reducing the nonprofit liability. With that in mind, do refresher training and when appropriate, put up signage as a regular reminder of the safety policies.

5. Revisit and Adjust

Inevitably, something will change. It’s never a bad idea to revisit your safety policies any time a program goes through a major change. If something does happen that causes the nonprofit to incur liability, this is also a natural inflection point to analyze how your safety policies could be more effective. 

It’s unlikely that you’ll never have anything happen. But great policies, training and insurance coverage that are kept up-to-date for the current needs of your organization can help reduce the likelihood and frequency of safety issues. If you need an attorney to analyze and reduce your nonprofit’s risk and liability, please reach out! Our attorneys help hundreds of nonprofits nationwide each year.