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How to Protect Your Non-profit When Using Event Pictures in Marketing

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It’s a common sight at any non-profit event – a photographer is walking around, taking pictures of all the scenes at the event, capturing the night for the organization and its guests. 

In most cases, those photos will be posted on the organization’s social media channels and the event page of the website, with a few maybe being used in other ways. After all, the organization wants to show how many of the community’s key players are at the event, believing that a “who’s who” at the event will draw other people to the next event.

However, what happens when you photograph someone who may not want to be seen at an event? What happens if you use the photograph in a sales piece asking for donations or membership? What happens if you film an event and use the B-roll at a major conference?

For the most part, using photographs in such a way will not cause an issue. After all, the people at the event are there to support the organization.

But, non-profit laws are there to protect that one person who may not want their image or likeness to be used in a donation or sales pitch. As such, any non-profit organization must take steps to protect itself.

The attorneys at The Orlando Law Group specialize in helping non-profit organizations in Orlando, Sanford, Winter Garden and Kissimmee with all of an organization’s essential legal needs, including what is needed for human resources and employment.

Florida Statutes are clear about consent requirements

For years, Florida has had very specific requirements as to the use of images and likenesses of individuals without consent.

Florida Statutes 540.o8 state:

(1) No person shall publish, print, display or otherwise publicly use for purposes of trade or for any commercial or advertising purpose the name, portrait, photograph, or other likeness of any natural person without the express written or oral consent to such use given by:

(a) Such person; or

(b) Any other person, firm or corporation authorized in writing by such person to license the commercial use of her or his name or likeness; or

(c) If such person is deceased, any person, firm or corporation authorized in writing to license the commercial use of her or his name or likeness, or if no person, firm or corporation is so authorized, then by any one from among a class composed of her or his surviving spouse and surviving children.

A couple of key points in this statute.

First, the use covered by statute is defined as “purpose of trade or for commercial or advertising.” While one could say that posting on Facebook is technically advertising, it is widely assumed that this means in a sales piece. 

So, posting pictures with the text, “What a great event we had! Thank you for coming!” won’t cause issues. However, a post that says “Mayor John Doe helped find a cure for cancer at our event. Won’t you help too?” with a picture of Mayor Doe and a link to a donation page could cause issues if you aren’t prepared.

The second part of the law that is important here is that it says permission must be given through “express written or oral consent.”

We’re lawyers, so we believe it is best to get “express written consent,” not just verbal consent, to be sure your organization is covered. 

A sign at the event does not go far enough

In many cases, you’ll see a sign at the door of an event that warns attendees that the event is being filmed or photographed and that their image may be used.

While the effort is in the right place, there are many issues that could arise. For instance, was the sign placed so that every single attendee was guaranteed to see it and act on it? That’s virtually impossible. 

Even having it at every registration desk doesn’t guarantee everyone will visit the desk. Often, one person in the group checks in while the others go to the bar, the restroom or something else.

A sign at the entrance to the event? It can easily be missed if a large crowd enters at the same time.

On the PowerPoint? What about the people who were in the restroom or bar when it was on the screen?

Then, what happens if your event has a speaker of another language with limited English skills? 

Finally, perhaps the biggest issue is the ability to opt out of the organization using someone’s likeness. The only option there is for the guests to leave the event, demand a refund and create ill will with the organization. 

Put a waiver as part of the ticket-buying process

Perhaps the best way to prevent issues is to have a check box for attendees to agree to the photo waiver when they purchase tickets. 

The waiver should include a rough outline of any type of use. It should include the specific event. It should be clear that by checking the box, the ticket purchaser understands the ramifications. 

It should include a way to opt out, even if that means not buying a ticket. This part can be flexible.

You might be able to offer not to use any photos that show the person, but that could be very difficult for most events.  For instance, if you’re running a marathon that draws 10,000 people, you can’t reasonably be held to a standard to exclude specific people from an event. 

So, your opt-out might just be for the guest not to buy a ticket.

Here’s a great waiver from a non-profit in Maryland:

By entering an event or program of the Horizon Foundation, you are entering an area where photography, audio and video recording may occur.

Your entry and presence on the event premises constitutes your consent to be photographed, filmed, and/or otherwise recorded and to the release, publication, exhibition, or reproduction of any and all recorded media of your appearance, voice, and name for any purpose whatsoever in perpetuity in connection with the Horizon Foundation and its initiatives, including, by way of example only, use on websites, in social media, news and advertising.

By entering the event premises, you waive and release any claims you may have related to the use of recorded media of you at the event, including, without limitation, any right to inspect or approve the photo, video or audio recording of you, any claims for invasion of privacy, violation of the right of publicity, defamation, and copyright infringement or for any fees for use of such record media.

You understand that all photography, filming and/or recording will be done in reliance on this consent. If you do not agree to the foregoing, please do not enter the event premises.

Of course, there could be some issues with this approach too. For instance, what if one administrative assistant registers multiple people for the event? What if the event planner is asked to register someone? If the governor attends, are you going to have him or her register themselves?

If the individual does not check the box, there could be issues.

Take it a step further sometimes

Remember, if you use someone’s image in a sales effort, you are often implying their endorsement of the product or service even if they didn’t give you a direct testimonial.

This particularly happens a lot in political mail where a candidate uses a photo of shaking hands with a governor or mayor, or with a popular non-profit. In Florida law, political candidates must have the endorsement in writing to be legal and there have been cases where someone on a mailer sent out a cease and desist letter. 

The leaders of the Hope Community Center did just that when the former mayor of Apopka used their image on a flyer. 

Those often make headlines, but sometimes that mayor or governor who attended your event doesn’t want to appear to be endorsing any organization to be fair to all non-profits. A television commercial asking for donations using video of the governor at the event might cause issues, even with a waiver checked during the purchase of tickets.

If you plan to use event attendees in a widespread sales effort, take the extra steps to make sure you do not create ill will. Reach out to them via email and ask specifically if you can use it for a specific use, such as being featured in a direct mail piece. 

Even if the general waiver during ticket purchase was clicked, just the extra step gives your non-profit an extra layer of protection. Plus, your attendees and supporters will feel appreciated that you took the time to ask – and to let them know people will see their image in the sales collateral or in the commercial.

Are there exceptions? 

There are always exceptions to the law. In Florida Statute 540.08, there are three exceptions:

  1. If the photo is being used in a news capacity by a legitimate news organization. This does not cover ads in the publication, only news stories.
  2. Use of an image in art.
  3. Use of an image in a crowd shot where the person is unidentified or is one of many in a crowd.

Also, just because the person has died does not give an organization the ability to use a photo at will. Florida law requires permission from the family of a deceased person for 40 years after their death. 

In most cases, using someone’s photo from an event will not cause issues for a non-profit. The person who doesn’t want their photo used will most likely not sue, as that could generate bad publicity, although they could if they feel they were significantly damaged. 

However, a non-profit could be forced to reshoot a television commercial or redesign and reprint marketing collateral without the image or video. That would result in wasted dollars and time, something very few non-profits can afford to do. 

The attorneys at The Orlando Law Group help all types of legal issues for non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

Whether it is on this issue or one of the thousands of other issues facing non-profit organizations, The Orlando Law Group can help. 

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Non-profits are not immune to messy and costly HR lawsuits

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This month, a non-profit surgery center in Virginia settled a major lawsuit related to how it treated an employee after being accused of discriminating against the employee because of their age.

The employee, a radiologic technologist, had been out on approved medical leave as the employee took care of carpel tunnel syndrome. The recovery was not going as planned, so the employee asked to extend the medical leave.

Instead of granting the request, the non-profit decided to end the employment and hired two younger technicians to replace the employee, resulting in a lawsuit against the non-profit from the Equal Employment Opportunity Commission.

In the end, the non-profit agreed to pay the employee $50,000 and “revise its policies on the ADA and ADEA, provide training to its management on the ADA and ADEA, educate its nonmanagerial employees on its ADA and ADEA policies and make reports to the EEOC of complaints of disability or age discrimination,” the release from the EEOC stated.

Most likely, that non-profit settled because it could withstand making those changes and paying the fine. The surgery center is part of a larger network of non-profit surgery centers.

For most small non-profit organizations, this type of lawsuit or action could mean the non-profit organization would shut down after spending significant resources on legal fees and other aspects of the fight, not to mention the stress and anxiety such a lawsuit could have on a non-profit organization.

However, the chance of having lawsuits involving human resources issues can be significantly reduced by taking the proper steps before a problem arises. And, if a problem does come up, a non-profit organization can have a better defense by creating policies that oversee human resources – and following them.

The attorneys at The Orlando Law Group specialize in helping non-profit organizations in Orlando, Sanford, Winter Garden and Kissimmee with all of an organization’s essential legal needs, including what is needed for human resources and employment.

Hiring Employees? Be Prepared

For any growing organization, hiring employees is a critical decision. Yes, there are financial implications, but there are also significant legal issues that can arise from employees.

The reality is that most of the same challenges that face for-profit companies also face non-profit organizations when it comes to working with employees. As such, in those cases, what’s critical for Target and Walt Disney World with employees is just as critical for the non-profit organization reading books to children or helping house abandoned cats.

So, let’s start with the basics of employment laws and how all businesses try to protect themselves from issues with employees. Those steps happen long before an employee is ever hired.

At the heart of all employment law is having the right policies and procedures in place and making sure all employees have read the policies, understand how those policies work and agree to follow those policies.

This work needs to be done before any employee has been hired. Here are a few items that need to be created by your non-profit before bringing on any employees.

  1. An employee handbook that covers all of the policies the non-profit has created. These policies should include these and others specific to your situation.
    1. Dress code
    2. Code of conduct
    3. Processes for requesting time off
    4. Benefits, if any, available for employees
    5. Remote work
    6. Harassment
    7. Equal-opportunity
    8. Co-worker relationships
    9. Grievance procedures
    10. Whistleblowing
    11. Drugs and alcohol
    12. Conflicts of Interest
  2. An employment contract that includes all the details specific to the individual.
  3. Job descriptions for all positions in the organization.
  4. Termination procedures, including any actions to dispute the reason for termination
  5. Benefit plans

As stated before, this should be commonplace for any business that hires employees. However, non-profit organizations need to be aware of a couple of very specific items that non-profit organizations are particularly at risk of having issues arise even with policies and procedures in place.

Make sure to classify employees as exempt or hourly correctly

This is a common problem for all businesses, but for non-profits who are often on a shoestring budget, the temptation to have someone classified as exempt is great.

However, if an organization is caught falsely classifying an employee, the punishment can include significant costs, including backpay for all employees not classified correctly and additional fines.

The U.S. Department of Labor has a great checklist for determining if an employee can be classified as exempt, but the requirements truly depend on the job. And here’s what can happen if you do not properly classify employees:

  1. The Wage and Hour Division may supervise the payment of back wages.
  2. The Secretary of Labor may bring suit for back wages and an equal amount as liquidated damages.
  3. An employee may file a private suit for back pay and an equal amount as liquidated damages, plus attorney’s fees and court costs.
  4. The Secretary of Labor may obtain an injunction to restrain any person from violating the FLSA, including the unlawful withholding of proper minimum wage and overtime pay.

The statute of limitations on this is two years for an accidental misclassification or three years if it was intentional.

The rules on employees are often changing, so it is important to have a labor law and HR professional available to review your classifications of employees.

The difference between a volunteer and a paid employee.

A very similar situation to classifying employees is allowing employees to volunteer at the non-profit. Most non-profit employees enter this type of work because they care about the cause or helping their community in general. They want to give more and donate time to the organization.

Unfortunately, non-profits have to be very careful about how an employee donates their time. The laws are very clear, an employee cannot donate time to do work they are usually paid for.

Let’s say the founder of a pet kennel has a medical emergency and cannot tend to dogs during the day as they normally do. The overnight kennel manager is sympathetic to the cause and “volunteers” to stay a few extra hours to help out.

That can’t happen.

However, if the kennel specialist volunteered to register people at the kennel’s gala, that would be allowed because it is not part of their actual position and job duties.

The best step is to make those rules clear in the employee handbook.

Non-disclosure agreements are essential.

Non-disclosure agreements, commonly referred to as NDAs, are fairly standard with many businesses, but for non-profits, they can be essential to prevent the worst from happening. Perhaps the main reason is that most people don’t go to work for a for-profit company because they believe in the mission, but employees of a non-profit are almost always tied to the mission. They entered the non-profit world because they cared.

Guess what? Volunteers, community leaders and the press are also invested in the mission of the organization and when something goes wrong, the temptation to smear the board, the executive, or others is great and often gets a much larger audience.

An NDA, along with a whistleblower policy, can help keep any disgruntled employees from running to the TV news or bashing the non-profit on Facebook. If they do, a non-profit organization could have a claim against them for damages because of the impact on the non-profit organization’s reputation.

Outside compensation policies can help employees.

Face it, non-profits are not going to make most people rich, and most employees are not being hired by your non-profit because the pay is significant. Yes, they want a good paycheck, but they understand non-profits can be a sacrifice.

Having a policy on outside compensation, including what is allowed and what is not allowed, can help your employees pay their bills. For instance, you could say outside compensation is allowed as long as it is not with a vendor of the organization or as long as it is not adult entertainment, such as an OnlyFans page.

Having a policy presented when the employee starts can help avoid conflicts in the future.

No commissions or finder fees for development officials.

In many businesses, the person bringing in the revenue for the company can be paid a percentage of that revenue. It’s one of the reasons so many people go into sales, particularly commissioned sales. That’s because their pay can be increased based on what they bring in.

For non-profits, this type of pay structure for the people responsible for bringing in donations is considered unethical and is not accepted. Many more issues are considered unethical for non-profits. Here is the list according to the Association for Fundraising Professionals.

Review the list and make sure your policies and procedures keep your non-profit ethical and in line with industry standards.

Curtail bad behavior from alcohol before it starts.

For many non-profits, event revenue is one of the largest fundraising activities. And at many events, the alcohol flows freely for its guests.

It can’t be for employees.

While many would think it would be understood that employees should not be overindulging at the annual gala, you are dealing with human nature and mistakes could take place. You also may have an alcoholic as an employee without knowing.

After all, when an employee drinks too much, many other issues could arise. What happens if they confront a donor – or try to become romantic with another employee? That could result in a multitude of issues that can affect the financial stability of any non-profit organization.

A chain of command helps avoid problems.

In the governance of a non-profit organization, it is almost always clear that employees should not be communicating with board members unless approved by the executive director. However, it often happens and often causes significant issues for the non-profit organization.

For instance, trying to be helpful, a board member recommends their friend to be an employee of the non-profit. Of course, the executive director will treat the interview process for that person like all the other applicants.

In this case, the board member was right. The person will be a great employee.

Unfortunately, when there is a disagreement between the executive and the employee, the employee complains to their friend, the board member. The board member then approaches the executive asking questions without fully understanding the issue that might have started the disagreement.

Now, instead of spending time on the organization’s mission, the non-profit director is working to explain their actions to their boss, even if it was justified

In a non-profit organization’s bylaws, it is recommended the board manages the highest-paid executive and the executive manages the staff. This needs to be clearly stated in the bylaws but also shared with employees. If a board is dealing with the day-to-day management of employees, the non-profit is not operating at its full potential.

Utilizing contractors can be a solution.

More and more businesses are utilizing 1099 contractors to outsource certain tasks. This can be a solution for non-profits as well. Just like other businesses, it is important to understand the rules dealing with a contractor vs. employee status.

For instance, the contractor can’t be provided with a company email address, a sales target list, a business card or any other things that you think might be common. You also can’t dictate how the job is done or when the job is done. You can only require the job that needs to be done.

It is important not to try to replace employees with contractors. Much like the classification of exempt employees, the fines and back pay for treating contractors like employees can be significant.

The attorneys at The Orlando Law Group help all types of legal issues for non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

Whether it is on this issue or one of the thousands of other issues facing non-profit organizations, The Orlando Law Group can help.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Thinking About a Raffle? Don’t Push Your Luck!

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As a non-profit organization, one of the easiest ways to raise your much-needed funds is through some sort of game of chance. It could be a casino night or a limited-entry raffle for a new car. You could offer a 50/50 contest or just a raffle for a gift basket or a pair of concert tickets.

Truly the options are endless as to the ways to raise money through games of chance.

Too often, however, non-profit organizations inadvertently break the law by requiring a purchase of a ticket, an entry fee or some other barrier to entry that is prohibited.

It is a serious issue with serious repercussions. If your organization is found to violate state laws dealing with games of chance, you could be charged with a second-degree misdemeanor for a “deceptive and unfair trade practice” with potentially 60 days in jail and a $500 fine per offense. You could also face civil penalties of up to $1,000.

If your non-profit organization is looking to hold a raffle or a sweepstakes, please reach out to The Orlando Law Group today. Our attorneys specialize in helping non-profit organizations with all types of legal issues facing non-profit organizations, like games of chance.

No one goes after these types of issues, right?

Most people would think there is no big deal in holding a raffle or a casino night to raise money for a great cause. Every day in Florida, someone is holding a charity poker tournament, a casino night, a raffle drawing or something else.

And in most cases, law enforcement does not bother them.

It does happen, however.

In fact, it has happened to people and organizations The Orlando Law Group works with.

Several years ago, a non-profit organization was holding a charity poker tournament in Downtown Orlando and the marquee outside the venue read “Casino Night Tonight.” Inside were more than 100 leaders, elected officials and donors supporting this non-profit organization.

At the time, agencies were cracking down on illegal casinos that were being operated throughout the state. The local law enforcement came into the venue and stopped the poker tournament to ensure it wasn’t gambling.

Luckily for the non-profit organization, all of the rules were followed, and a professional casino company was hired. After around 30 minutes, the all-clear was given and the festivities resumed.

If the rules were not followed and law enforcement determined the tournament was gambling, it would have been a lot worse and maybe even been on the evening news.

The Laws are fairly easy to follow

In Florida, the statutes that govern non-profit organization raffles and sweepstakes, FS 849.0935, are fairly straightforward.

It is illegal in Florida:

(a) To design, engage in, promote, or conduct any drawing in which the winner is predetermined by means of matching, instant win, or preselected sweepstakes or otherwise or in which the selection of the winners is in any way rigged;

(b) To require an entry fee, donation, substantial consideration, payment, proof of purchase, or contribution as a condition of entering the drawing or of being selected to win a prize. However, this paragraph does not prohibit an organization from suggesting a minimum donation or from including a statement of such suggested minimum donation on any printed material used in connection with the fundraising event or drawing;

(c) To condition the drawing on a minimum number of tickets having been disbursed to contributors or on a minimum amount of contributions having been received;

(d) To arbitrarily remove, disqualify, disallow, or reject any entry or to discriminate in any manner between entrants who gave contributions to the organization and those who did not give such contributions;

(e) To fail to promptly notify, at the address set forth on the entry blank, any person whose entry is selected to win of the fact that he or she won;

(f) To fail to award all prizes offered;

(g) To print, publish, or circulate literature or advertising material used in connection with the drawing which is false, deceptive, or misleading;

(h) To cancel a drawing; or

(i) To condition the acquisition or giveaway of any prize upon the receipt of voluntary donations or contributions.

Be careful with entry fees

Perhaps the most common mistake non-profit organizations make is in charging an entry fee to participate in the casino night or a raffle and charity poker tournaments are often among the biggest offenders.

For many of those types of tournaments, the marketing materials say “$100 buy-in” to participate in the tournament. Then, to entice players, the organization shows the grand prize is a trip to Las Vegas.

That is illegal in Florida.

After all, if you must spend money to win, it is technically gambling. So instead, you need to ask for a “suggested minimum donation” to play in the poker tournament. And if someone wants to play for less or even for free, you must let them. It’s the law.

The same holds for any raffle contest, no matter how small. If someone asks for a free entry, you are required to give it to them.

While that may sound like you’re going to have a raffle filled with free entries when you are trying to raise money, that rarely happens and there are steps you can take to discourage free entries.

For instance, you could offer 10 raffle tickets with a purchase instead of just one. You can make it so that someone has to use the post office to request a free ticket or entry. You can provide a free entry to receive 1,000 chips in the poker tournament, but then offer an additional 10,000 chips for $100.

The important thing is that you cannot deny free entry to anyone.

Disclosures are required

One of the other places where non-profit organizations run afoul of the law is in disclosures for raffles and sweepstakes. The non-profit organization will put the raffle drawing on its website and on social media to draw attention and raise money for the non-profit organization, but the state requires certain language.

The law is specific in that all tickets, brochures, advertising and forms must show:

(a) The rules governing the conduct and operation of the drawing.

(b) The full name of the organization and its principal place of business.

(c) The source of the funds used to award cash prizes or to purchase prizes.

(d) The date, hour, and place where the winner will be chosen and the prizes will be awarded, unless the brochures, advertisements, notices, tickets, or entry blanks are not offered to the public more than 3 days prior to the drawing.

(e) That no purchase or contribution is necessary.

While the law states that it must be “conspicuous,” it does not say where or how large it must be. And while it seems like a lot, a simple disclaimer can work. It can be something like this:

Doing Good Inc. will be conducting a hand drawing of raffle entries on January 1, 2026 at 2 p.m. at our office at 123 Any Street, Orlando. No purchase is necessary for the raffle of donated items.

Of course, since this is a legal requirement, it is critical to work with your attorney to ensure it is properly written for your unique circumstances.

One thing to note. If your non-profit organization is selling raffle tickets at an event – and only at the event – and drawing prizes that night, you will not need to list where and when the raffle will take place.

Just a reminder. Failure to follow these rules is a second-degree misdemeanor.

Large Prizes Have Unique Rules

One of the proven ways to raise money is to offer a limited number of raffle tickets for a high-value prize, like a great trip, a car lease or something like that. The size of the prize generates significant excitement for the non-profit organization and its donors, who gladly pay $100 a ticket for a one-in-200 chance at a Mercedes Benz.

If you don’t follow the law, you could end up paying $1,000 in fines to the state, in addition to being charged with a second-degree misdemeanor.

The cut-off point for this section of the law is when a non-profit organization offers a prize valued at $5,000 or more. At that level, there are very specific rules that you must follow.

First, you have to register for the contest with the state’s consumer affairs division and you need to build a page on your website with all of the rules of the contest. You will need to pay $100 to the state as a filing fee.

Then, you need to establish a trust account at a bank that will hold the amount of money that is required to pay the winners. The bank must then file a form from the state that verifies you opened the account and the amount of money in the account. You can also purchase a surety bond.

However, if you have registered with the state a similar contest for five consecutive years without any incident, the state may waive the requirements to have a trust account or a surety bond.

All of the above must be done at least seven days before the contest starts.

Finally, after you have given the prizes away, you must send to the state a certified list of all winners who received a prize of more than $25, including the value of the prize. You’re also required to keep these on file for anyone who requests them.

It can get complicated, so here’s the exact language found in Florida Statute 849.094:

Every operator of a game promotion in which the total announced value of the prizes offered is greater than $5,000 shall provide the Department of Agriculture and Consumer Services with a certified list of the names and addresses of all persons, whether from this state or from another state, who have won prizes which have a value of more than $25, the value of such prizes, and the dates when the prizes were won within 60 days after such winners have been finally determined.

The operator shall provide a copy of the list of winners, without charge, to any person who requests it. In lieu of the foregoing, the operator of a game promotion may, at his or her option, publish the same information about the winners in a Florida newspaper of general circulation within 60 days after such winners have been determined and shall provide to the Department of Agriculture and Consumer Services a certified copy of the publication containing the information about the winners.

The operator of a game promotion is not required to notify a winner by mail or by telephone when the winner is already in possession of a game card from which the winner can determine that he or she has won a designated prize. All winning entries shall be held by the operator for a period of 90 days after the close or completion of the game.

That’s a lot of work for a large prize pool, but it can be worth it depending on your non-profit organization’s needs.

Every state is different, so make sure you work with an attorney when planning any games of chance to ensure you are following state law. Florida’s full statute on charitable games of chance can be found here.

In March, The Orlando Law Group will be holding its first non-profit boot camp, where our attorneys will work closely with non-profit leaders to ensure the non-profit organization is following all the legal aspects required.

By attending, non-profits can truly give donors and the community the comfort that their non-profit is one being run with the highest standards.

The attorneys at The Orlando Law Group help non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Non-Profits: Ensure Your Bylaws Are Strong

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If you’re a non-profit leader, you most likely have received a call from a board member sharing they have the solution to an issue you discussed at the last board meeting.

The solution is expensive, but after researching it more, it does seem like the perfect fit. It truly does solve the issue at hand, so you go ahead and sign a contract for the solution.

Everything seems to be running great until someone files a complaint against how you procured that solution.

You didn’t know there were multiple companies offering similar solutions, including one that was significantly less expensive than the one the board member offered. As such, the accusations start flying internally and on social media.

They accuse you of wasting the non-profit’s funds.

They accuse you of just pleasing a board member.

They accuse you of providing insider information to a board member.

They accuse you of not following the professional standards of non-profits.

None of this is good, especially when the media picks up on the situation, but it all could have been avoided with a great set of bylaws that were followed methodically.

If your non-profit organization does not have a great set of bylaws, or you simply want to make sure your non-profit organization’s bylaws are up to date, please reach out to The Orlando Law Group today. Our attorneys specialize in helping non-profits on all types of legal issues facing non-profits, like bylaws.

Why are bylaws important?

The bylaws of any organization are the most essential part of any organization, especially a nonprofit. They are the road map for governance, providing direction to staff and the board about how the non-profit organization operates.

Bylaws should be tailored to the organization and its needs. Yes, bylaws are required by Florida statute, but there is no instruction manual for what is included in an organization’s bylaws.

Florida statutes simply state:

The initial bylaws of a corporation shall be adopted by its board of directors. The power to alter, amend, or repeal the bylaws or adopt new bylaws shall be vested in the board of directors unless otherwise provided in the articles of incorporation or the bylaws. The bylaws may contain any provision for the regulation and management of the affairs of the corporation not inconsistent with law or the articles of incorporation.

It is clearly up to the organization what should be in your bylaws.

Steps to take when creating your non-profit organization’s bylaws

Any non-profit organization’s bylaws should reflect the organization’s goals and objectives. While it’s not a tactical document on how to reach those goals, it is a document to show the procedures and processes the organization should follow to reach those goals and objectives.

We find the best way to start the process is to create a small group of board members who are interested in how the organization is governed. These individuals usually have experience in non-profit board service and understand what usually needs to be in a non-profit organization’s bylaws.

This group should work with an attorney, who can provide guidance to ensure you follow all statutes that govern non-profit organizations. The attorney can also provide you with examples of bylaws from other organizations to set the stage.

Most of the work on changing bylaws happens in this committee. They will work with staff to see what works and what does not work in the current bylaws. They will look for places that need clarification or items that are just not irrelevant.

This group will put together a proposed set of bylaws to present to the full board, which will then accept the changes or ask for further changes.

Of course, many people do not like working through committees, but with a non-profit’s bylaws, it is important to have the full board’s commitment to the document. With their commitment, it is much easier to follow and refer to in situations where the staff may need guidance.

What should be in a non-profit organization’s bylaws

While every non-profit organization’s bylaws will be unique in some fashion, the subject matter of the bylaws is fairly standard for most non-profit organizations.

Specifically, here is what needs to be in your bylaws:

  • Name and purpose of your organization. This should include your mission and vision statements determined through strategic planning of your board of directors.
  • Election, roles, and terms of board members and officers. How this is done can vary significantly depending on the size and goals of each non-profit organization. Some organizations might want a nominating committee to provide board members, others may not.
  • Meeting guidelines. These should include how often the board meets and what constitutes a quorum. One thing to focus on here is what constitutes a quorum and to ensure it is not too difficult to reach. You want to have enough board members present for critical votes, but you don’t want a regular lack of quorums to prevent the non-profit organization from moving forward.
  • Board structure. This could include the number of board members, standing committees and their roles. Again, this can be specific to any organization, although a finance committee and an executive committee are standard. As to board size, there is no right answer. Some non-profit organizations have very large boards and others have just a few people. That is a decision of the board.
  • Compensation and indemnification of board members. Most non-profit organizations do not pay board members, but it is up to the board to determine that aspect. The indemnification part is essential if you would like to attract higher-level board members.
  • Role of the chief executive, the paid leader of the organization. This is truly essential as it is the basis for any employee review. It is also critical to let board members and staff understand what tasks they each should be doing and what processes and procedures they oversee.
  • Conflict of interest policy for board members and its staff. One of the worst scandals a non-profit organization can experience is being accused of using donor funds to enrich the board or the staff. Understanding these conflicts and having a policy about conflicts in purchasing is essential to protect the non-profit group.
  • How to amend the bylaws in the future. A bylaws document should always be able to be amended easily with the permission of the board. It is impossible to see every issue that may need a bylaw change in the future.
  • Dissolution of the organization. No one likes to think about the end of the non-profit organization, but it happens, and you want to make sure the board has thought about what must be followed if the end comes.

All of those apply to just about any 501(c) organization. If you are a 501(c)(6) organization, a membership group, like a chamber of commerce, then an outline of the membership procedures, including how members are accepted and terminated, will be needed.

Other aspects to watch when creating your bylaws

Creating bylaws can be tricky, but when the board comes together, the bylaws are more than just a governance document. It is a platform to give potential donors the security that the non-profit organization is a well-run organization.

For instance, when you talk about term limits in your bylaws, the organization should look at the overall state of the non-profit.

Often there is a debate on term limits for board members. After all, do you want to see someone who is an integral part of the board leave simply because of timing?

Maybe.

But do you have a pipeline of potential board members waiting to join the board or are you struggling to find quality board members?

Will it help your board to have as many community members as possible or do you want the board to be exclusive?

While best practices call for a non-profit to have term limits, that is an individual discussion. For many early non-profits, term limits may come later in the organization.

Another aspect is to make sure the bylaws are written at a high level.

While a non-profit wants to be specific, it should not detail the day-to-day operations of the organization. That should be developed by the paid executive.

For instance, the bylaws of the organization should not have how annual reviews of the customer service agents are performed but it should clearly state how the top-paid executive is reviewed.

When writing the bylaws, make them difficult to change, but not too difficult to change.

For instance, having a supermajority of all of the members of a chamber of commerce approve a bylaws change would be a nearly impossible task, but having a supermajority of the board approve a change is hard, but not impossible.

Finally, remember the bylaws are the rules by which the non-profit is governed. In too many cases, the bylaws are written, approved and then filed as done and not looked at again.

The bylaws should be living, breathing documents that are looked at regular basis.

Examples of how to use your bylaws

Going back to the beginning scenario where a board member proposes a solution to an issue the non-profit organization is experiencing.

When the board member suggests a product or service, the first step should be to check the bylaws for the processes and procedures when that happens.

Does the board member have a conflict of interest? For instance, is the company owned by the board member or a client of the board member?

If there is a conflict of interest, what are the procedures for handling conflicts of interest? Do the bylaws talk about disclosing conflicts or do the bylaws change the procedures for procurement if there is a conflict of interest? Or do the bylaws just say you can’t work with a board member’s company?

Then, check to see what the bylaws say about any procurement. Is there a requirement for multiple bids? Are there specific levels where you need full board authority to purchase?

If you follow all the bylaws, the non-profit organization has some protection against accusations of preferential treatment or wasting money.

Another example is with new board members, particularly when there are more people wanting to be on the board than there are board seats.

When bringing on new board members, the bylaws should have a clear process as to how new board members are approved. This often has a nominating committee that presents to the board a slate of candidates and then the board or membership approves the board members.

What happens if someone really great wants to join the board, but the bylaws say the only time a board member is added is once a year – and that just happened?

Unfortunately, the organization has to wait or go through the process of amending the bylaws to allow for specific exceptions.

But, if you don’t follow the bylaws in every case, you’re ignoring the rules of the organization. That could have serious consequences, including lawsuits or losing your non-profit status.

In March, The Orlando Law Group will be holding its first non-profit boot camp, where our attorneys will work closely with non-profit leaders to ensure the non-profit organization is following all the legal aspects required.

By attending, non-profits can truly give donors and the community the comfort that their non-profit is one being run with the highest standards.

The attorneys at The Orlando Law Group help non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.

If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

 

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Introducing The Orlando Law Group’s Non-Profit Boot Camp!

The Orlando Law Group is here to help you. Our non-profit boot camp can help you and your organization get on the right path to ensuring the longevity and success of your nonprofit.

Each Non-Profit Boot Camp is exclusively for the top executives at just 10 non-profits, giving them the ability to truly interact with the attorneys at The Orlando Law Group.

Ask yourself these questions:

  1. Are you protected from an injury to a volunteer?
  2. What happens if someone you are trying to help gets angry?
  3. Did you correctly register your charity with the state and federal government?
  4. Have you established a set of bylaws for the organization to operate?
  5. Is your charity protected from someone who wants to steal your idea?
  6. Are your finances transparent and protected from accusations?
  7. Are you personally protected from liability?
  8. Can your non-profit continue to operate if you can’t run it?
  9. Do you have the right non-profit human resource documents and are you following them?
  10. Are you protected from volunteers or staff slandering you after leaving?

If you don’t know the answers to these questions and more, then our Non-Profit Boot Camp is for you!

The Non-Profit Boot Camp is specifically designed for small- and medium-sized organizations, particularly ones that are starting or just a few years old. It’s also tailored for organizations that are looking to expand their funding and their services or those where the founder is trying to add others to the leadership of the organization.

At the Non-Profit Boot Camp, we will cover:

  1. Best Practices for by-laws and other governing documents
  2. Choosing and developing a board of directors
  3. Personal protection for founders
  4. Protections from accidents of volunteers and others
  5. Intellectual property protection – graphics, logos, ideas
  6. Donor and Board Member Protections
  7. Planned-giving legal issues
  8. HR protections
  9. Conflict of Interest
  10. Common legal issues facing small non-profits

Simply click this link to register for the Non-Profit Boot Camp. The cost for the boot camp is just $499, giving you unprecedented access to our senior attorneys and nearly all the information you need to protect your charity and yourself.

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