Charities and not-for-profits (“NFPs”) face increasing challenges in delivering their services to the public, in part because of a more litigious society, as well as an increasingly complicated regulatory environment in which to operate. In facing these challenges, charities and NFPs need to be familiar with an array of legal requirements. However, charities and NFPs frequently experience difficulties in complying with requirements in this regard. This may be due to inadequate corporate records, governance policies and books and records, improper charitable receipts, failure to comply with fundraising requirements, lack of direction or control over foreign activities, as well as possible violations of privacy rights involving donors, employees and volunteers, amongst other examples of potential non-compliance.
For charities and NFPs to comply with and avoid exposure to corresponding legal liability from such requirements, it is important that their boards and senior management undertake regular legal check-ups in order to ensure appropriate due diligence. In this regard, a good starting point for establishing the necessary due diligence is to ask: what is the legal status of the charity or NFP; what are the applicable legal requirements; and how can one best comply with those legal requirements? The “Top Ten Tips” that follow identify key issues that charities and NFPs may want to address in order to implement effective legal risk management.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 398