Being a community volunteer - are you at risk?
Not-for-profit organizations in a community provide needed services to its residents and shape the community's culture. A city's vitality depends on them, whether the organization is a social service agency, an educational program, a grassroots political initiative, an arts center, or a business league. As government funding for nonprofits is diminishing, community members are being called on to do much more for the numerous organizations than they have in the past. Volunteers frequently wonder what can happen to them personally if the organization's activities cause harm to someone else.
In order to encourage volunteerism, States and the Federal government have enacted laws to limit the liability risk assumed by volunteers, whether the volunteer serves as a director of the board, as a committee member, or provides services to the organization.
A board member owes the duties of care, loyalty, and obedience to the organization. The duty of care means that, as a director, you shall use your best judgment in making decisions that affect the organization. By attending meetings, asking questions, reading the materials presented, not withholding relevant information, and making decisions based on information you believe to be reliable, you meet your duty of care.
The duty of loyalty requires you to put your personal interests aside and make unbiased decisions. If you have a conflict of interest, you must disclose it to the others, and you should not participate in the decision at hand. A conflict can arise when you or a member of your immediate family stands to gain in some way by the proposed activity.
As a board member, you fulfill your duty of obedience when you ensure that the activities of the organization fall within the organization's mission and that the organization is compliant with the laws and regulations that apply to the organization and its activities.
Board members have an ongoing duty to act in the best interests of the organization as long as their involvement in the organization continues. If you cannot fulfill the obligations of a director, you should resign. If you were considered a member of the board at the time that harm occurred, you can be named in a lawsuit against the organization. Even if you didn't participate in an action taken that caused the alleged harm, if you did not fulfill the duties required of you, you may be held liable.
If the board members have complied with these duties in good faith, and the board's conduct can be attributed to a rational business purpose, the law protects the conduct. When a decision of the board of directors is challenged in court, an individual director will not be held liable for damages caused by that decision if the director had no conflict of interest, made an informed business decision, in good faith, and without an abuse of discretion.
Other volunteers are similarly protected if their action causes harm to another. If you are an unpaid volunteer, you generally will not be held personally liable for your actions that cause harm to others if you are acting within the scope of your responsibility; your action is not reckless, willful, or criminal misconduct; and you are not grossly negligent or acting with conscious, flagrant indifference to others. If the activity you engage in as a volunteer requires a license, you must have the appropriate license. If the activity calls for you to use your professional education, you will be held to a higher standard of conduct. Otherwise, you will be held to an ordinary person's standard of conduct. You may be held liable if you were operating a vehicle when the damage occurred.
Before you agree to volunteer, either as a member of the board of directors or otherwise, ask the organization if they have liability insurance that covers you. In the event you are sued personally for an act of volunteerism, the insurance company may provide for your defense or at least cover your monetary losses, including your own attorney fees. Not all organizations carry this insurance. You will need to assess for yourself whether you are able to fulfill the duties and act with the appropriate standard of conduct, and compare it to the risk of being held liable if something goes wrong.
The community needs volunteers. Knowing how to limit your risk of being sued as a result of your involvement with an organization should help you make the decision to step up to the plate and work for a cause you believe in.
The information contained in this article is not intended to be legal advice or to create a contract between the reader and the author. The reader is encouraged to seek appropriate legal counsel and not to rely on the information contained herein.