Administrators and Boards of nonprofits and charities deal with legal issues on a daily basis, often without full knowledge of the legal implications of their decision-making. Need to sign a contract? Should I rent or buy? How do I terminate this employee? VLS lawyers can help you anticipate potential consequences and limit risk. Use this 10-point checkup to determine whether your organization is in good legal health.

 

1. Does your board know its duties and liabilities?

A director can be held personally liable for their actions or inactions as a board member. Do you know the steps to take to limit board member liability? Have you set the right level of directors and officers liability insurance? Do your bylaws and articles of incorporation clearly delineate the scope of authority of board members? A VLS lawyer can train your board on appropriate governance, assess your organization's exposure to legal risk, review your letters patent, and help ensure your organization is in compliance with all regulatory requirements and corporate and tax law as they apply to nonprofits.

 

2. Does your organization have sound administrative systems in place?

A nonprofit corporation is required to keep proper records in order to meet reporting requirements. You should know what these requirements are and develop a system to make sure reporting is accurate, complete and filed on a timely basis. Do you have purchasing procedures and adequate fiscal controls? Are you in compliance with all terms of your grants? Have you complied with corporate tax filing requirements? Do you conduct an annual audit? A VLS lawyer can help reduce your risk exposure by reviewing your administrative systems and ensuring that there are no gaps.

 

3. Are you a registered charity, or do you plan to seek charitable status?

If you are a charity, are you meeting your disbursement quota? Do you understand the rules on how to issue tax receipts for donations? A VLS lawyer can advise you on the most appropriate tax status (nonprofit or charity) in light of your organization's purpose and activities, as well as help you apply for charitable status.

 

4. Do you have employees or independent contractors?

As an employer, you handle hiring, termination, and promotion decisions. Do you understand issues of progressive discipline? Do you know effective practices for nondiscriminatory recruiting? Do you know how contractor relationships are handled? A VLS lawyer can help ensure that you are in compliance with all relevant federal and provincial employment legislation and can assist you in creating personnel policies that cover work rules, benefits and other terms of employment.

 

5. Does your organization enter into vendor contracts for purchasing goods, services or equipment?

You need to make sure you understand your contracts and what could happen if you have a dispute or want to terminate a contract. A VLS lawyer can handle the negotiation and drafting process for you. They might also be able to negotiate better terms or ensure you are protected form one-sided provisions.

 

6. Do you use volunteers to serve vulnerable populations?

Nonprofits and charities face added risks when working with volunteers to serve vulnerable groups. Do you run police security checks on employees and volunteers before permitting them to work with children or others that are vulnerable to abuse? Are your screening practices adequate given the nature of your organization's activities? Do you have written sexual abuse and harassment policies that address issues such as reporting procedures and discipline? A VLS lawyer can help you identify your risk exposure, review or draft your policies, set up systems to prevent problems, and help handle crisis situations.

 

7. Do you lease or own real estate?

If you lease space or own real estate, you must address a range of issues associated with leases, property taxes, building code compliance, insurance, and zoning or other use restrictions. A VLS lawyer can make sure you are protected and in compliance with relevant codes and laws.

 

8. Do you generate earned revenue such as ticket sales, fee for service or through a separate business entity?

If your organization has earned revenue, you should understand tax rules and the integration of activities between your nonprofit and any separate businesses. A VLS lawyer can help you structure your business andadvise you on insurance, contracts, employment, and governance issues.

 

9. Do you publish or distribute materials?

If so you may need to protect your materials from unauthorized use by understanding the rules of copyright and trademark. A VLS lawyer can advise you on protecting your intellectual property.

 

10.  Is your organization in compliance with privacy legislation?

In Canada, this is known as PIPEDA - the Personal Information Protection and Electronic Documents Act. Does your organization's technology protect personal information? You need to know how PIPEDA relates to your organization's work, what steps you need to take to ensure that you are in compliance, and how to deal with public concerns or complaints. A VLS lawyer can help you draft a privacy statement.