A Picture is Worth a… Lawsuit?

We like to leave all things legal to lawyers.  Occasionally, something comes across our radar, however, that involves a legal issue we are compelled toimagesCAFMJZ9W share.  Here are two that recently arose:

  • Copyright issues with unlicensed photography: In this Venable article, written by Joshua Kaufman, the dangers of borrowing images from the internet for use on your website are described. Take heed. And make sure you have permission to use the photography on your website!
  • Charitable fundraising under great scrutiny: In this article from Polsinelli, the authors describe recent regulator actions that provide some indication that extra scrutiny is being given when examining fundraising activities. Though the examples given are extreme and most charitable organizations do not operate fraudulently, the article provides a good reminder of the importance of an accurate Form 990 that provides the best possible view of your organization’s operations and management’s good stewardship of donations.

Should you find that you need a lawyer, here’s a recent post that provides tips on working with one.

Status Quo for the Nonprofit Industry?

Crisis-Solution

 

Hi, what’s new?

Nothing much.

 

This could be a conversation with a teenager.  Or, perhaps with fill-in-the-blank nonprofit. In a recent blog post, Kate Barr, Executive Director at Nonprofits Assistance Fund, outlined the challenges facing our nation’s nonprofits according to Nonprofit Finance Fund’s 2015 State of the Nonprofit Sector report. Then, she compared this report to others from over the last 25 years. And guess what? She noticed many of the same challenges plaguing our nonprofits in 1990 are the same today.

What she also noted is that resilience is a common characteristic of the sector, too.  We agree.  Give her post a read; it provides great perspective.

We are grateful to have Kate’s optimistic outlook and keen observation as she judges Resourcefullness Award submissions in Minnesota this fall.

Creative Ideas Sought for $10,000 Prizes

We may be out of the recession, but the creative ideas coming out of the nonprofit industry continue to ripple.  We’ve seen countless examples of Resourcefullness Awardpassionate ingenuity that has led to more money to carry out more programs – always striving ahead with mission in mind.

For this reason, we are excited to kick off the third annual Eide Bailly Resourcefullness Award.  The Award recognizes 501(c)(3) organizations in Arizona, Colorado, Minnesota, and Utah that have undertaken creative and sustainable revenue generation initiatives.

We’re accepting submissions until August 12, 2015.

Though the award is confined to certain states, the lessons and ideas are transferrable.  Read about some of last year’s submission trends and those from 2013.

We can’t wait to see what new ideas come forth in 2015 submissions!

 

Scary Data Security Stats Should Prompt Careful Planning

In 2013, 43% of businesses experienced a security threat. Hand pushing virtual cloud security button

Verizon’s 2013 Data Breach Investigation report stated that 75% of these cyber-attacks were opportunity-based, with 78% of initial intrusions being deemed as low difficulty. Combine that with their most recent finding that, on average, 1,000 compromised records will cost an organization between $52,000 and $87,000, and it is easy to see why security continues to be a major concern in 2015.

Sadly, the Online Trust Alliance (OTA) found that over 90% of data breaches last year were preventable.

Maintaining a solid IT security strategy is essential for organizations of all sizes, but especially those in highly liable sectors. For nonprofits, security becomes even more pressing to maintain the trust and continued support of your donors, board members, and the communities in which you serve.

Eide Bailly’s Technology Consulting group has put together nine actionable steps a nonprofit can take to reduce its vulnerabilities.

What are you doing to protect data in your own organization?

 

What should nonprofits expect when working with lawyers?

Duniway Sarah - GPM1By:  Sarah Duniway of Gray Plant Mooty

“I’m going to run this by my lawyer” isn’t often said enthusiastically, but it doesn’t have to be that way! Lawyers, used right, can be a great resource for nonprofits. Some tips on working with lawyers:

Collaborate! You’re the expert in your organization: what you do, what you need, and what you can afford. We’re the experts on the legal issues. View the relationship as a partnership, where we all work together to advance the organization’s best interests. Just as with any member of your staff, set clear expectations and timelines, but also share the background and information that we will need to do our job. The more we’re part of your team and understand what’s trying to be achieved, the better we’ll serve you.

Recognize the value of expertise. The nonprofit sector has matured; it’s no longer an area where lawyers comfortably dabble. Seek out attorneys who have expertise addressing your organization’s needs. Assuring legal counsel has the technical knowledge to serve you is critical – be it nonprofit corporate law, tax-exemption law, employment and employee benefits, etc. But the right expertise also lets us be more efficient, brings wisdom borne of experience, and allows us to be practical.

Let us practice preventive medicine. Bring us in early, run that potential new transaction or project by us early in the planning stages, or when a problem first emerges. We can help you identify issues, questions or ideas early, rather than waiting until you’re much farther down the road and have to change direction when it’s more expensive, cumbersome, and frustrating. Spending a little bit on legal fees for a half-hour phone conversation early can save you thousands on the back-end. It’s also much more satisfying for everyone.

Have an honest conversation about scope, deliverables, and fees. Not every question requires a lengthy legal opinion, but some do. Sometimes what’s needed is some training, or a form, or a work plan. Ask what legwork you can do that would save on fees, and understand that sometimes it’s more efficient to let us do the work.

Budget for legal services. Just as with audit and other regular expenses, recognize that strategic use of legal counsel is part of keeping your organization healthy.

Give us time to do a good job for you. We sometimes encounter leaders who think they’ll save on legal fees if they give us a very short deadline. While you may get the specific deliverable, you’ll miss the opportunity for legal counsel to be creative problem-solvers who can save expenses and heartache in the long run.

Finally, don’t ask lawyers on your Board to be your (free) legal counsel. As Board members, lawyers bring tremendous value—we excel at identifying risks, spotting issues, asking questions, thinking critically, understanding business issues, and working with legal counsel. But, again, not all lawyers are experts in legal issues your organization may encounter. Also, Board members’ fiduciary duties differ from our professional duties as attorneys, so asking your lawyer-Board members to be legal counsel puts them in a double-bind. Plus, it’s hard enough recruiting good Board members without also saddling them with hours of unpaid legal work.

About the Author:

Sarah Duniway works with nonprofit organizations, and health care providers. She delights in helping clients achieve their mission. She especially enjoys providing practical guidance and facilitating creative problem-solving in collaboration with her clients. Sarah is known for her ability to turn complex legal analysis into practical, easy-to-understand advice.

Sarah regularly advises clients on tax-exemption, governance, campaign finance, and business operations issues. She is a frequent speaker on social enterprise legal structures such as joint ventures, mergers and affiliations, UBTI and benefit corporations, as well as on governance, election law and campaign finance issues for nonprofits.

Sarah serves as Co-Managing Partner of Gray Plant Mooty and is on the firm’s Board of Directors.