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Wild Apricot Expert Webinar
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5 Common Legal Traps for
Nonprofits and How to Avoid Them
Presented by Erin McClarty
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Your Presenter
Erin McClarty
5 COMMON LEGAL TRAPS FOR
ERIN MCCLARTY - WILD APRICOT EXPERT
WEBINAR
NONPROFITS AND HOW TO AVOID THEM
MY (SHORT, SHORT)
STORY
▸GOAL
▸WHY DOES IT MATTER?
5 COMMON LEGAL
TRAPS
Legal Trap #1
Forgetting to keep
books and records;
making them public.
Do you know the bookkeeping requirements for where you’ve registered?
Could mistakes lead you here? (i.e. prison)
What are the publicity requirements?
When, where and how do you have to make records
available?
Solutions?
- Have a disclosure protocol in place
- Treasurer & Accountant are pivotal
- Never give control over to one person
- Make publicizing easy
Legal Trap #2
Unintentionally
putting board
members and officers
in danger.
Penalty Taxes
Personal Tax Liability
Lost Tax Status
Voided Indemnity
Voided D&O
Solutions?
- Know when to pause
- Calendar all reporting out for the year
- Assign topics to board members
- Don’t pay unless documents say
Legal Trap #3
Shaky practices with
intellectual property.
Contractor Agreement
IP Ownership
License Grant
License Restrictions
License Grant
Photography is the most common occurrence
Solutions?
- Get a contract (vendors and employees)
- Cover the who, what, when, where, why and how’s
- Don’t be afraid of templates
- Use license agreements
Who owns the IP?
Who can use the IP?
Is there a fee for use?
How can the IP be used?
Where can IP be used?
Legal Trap #4
Not adjusting to
employment growth.
- FMLA, ADA, ADAAA, OSHA, NLRA, ACA
- State specific requirements
- Independent Contractor v. Full-time
- Handling EEOC Claims
- Documenting employee performance
- Yearly review system
- On-boarding systems
- Employment handbooks
DID YOU KNOW?
THE TOP CLAIM NONPROFITS
DEAL WITH ARE EMPLOYMENT?
Solutions
- Create on-boarding processes
- Manage expectations, and be clear on the rules
- Check out labor sites
- Make looking at systems for “employees” a priority each year
Legal Trap #5
Floating programs.
- Following program revenue
- Following foundation dollars
- Following trends
- Following specific prerogatives
- Client mistrust
- Donor confusion
- Lost funding (especially gov’t)
- Stretched resources
- Allegations of fraud
- Misappropriation of funds
- Trustee violations
- Breach of formation documents
Solutions
- Have a framework together
- Mission statement, mission statement, mission statement
- Review the mission and vision against programming yearly
- Continuously seek feedback
- Don’t be afraid to speak out
Legal Trap Bonus!
A few other traps
nonprofits can fall
into.
Not paying attention to
fundraising requirements
Crummy whistle
blower practices
No contracting “policy”
Not keeping track of
lobbying
FINDING ISSUES
FRAMEWORK
- Be inquisitive
- Don’t doubt yourself
- Stick to the basics
- Get it down somewhere
- Make it an affair
NONPROFIT
RESOURCES
- Notations on Nonprofits
- Wild Apricot
- JD Supra
- Nonprofit Finance Fund
- National Council of Nonprofits
THE END.
CONTACT
erin@emcclartypllc.com
www.emcclartypllc.com
Wild Apricot Facebook Group
www.facebook.com/groups/WildApricotTribe/
#1 Membership Management Software Provider
Wild Apricot Expert Webinar
Build. Connect. Grow. Membership & more.
5 Common Legal Traps for
Nonprofits and How to Avoid Them
Presented by Erin McClarty
THE END

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