[Noisebridge-discuss] Question about 501(c)(3) status ....

Bruce Wolfe brucewolfe.sf at gmail.com
Wed Jan 18 06:02:47 UTC 2012


Ultimately, it also provides necessary liability cover under the shield of
corporations law so that no one person can be sued personally due to fault
by the organization's action. This is not to say, a person acting on their
own accord of activities not sanctioned by the organization would also be
protected. People taking action outside of approved activities of
Noisebridge Board of Directors or by the membership would be liable and *not
* be protected.

Example: If the floor buckled and someone tripped, fell and hurt themselves
without any help, their insurance company or legal action would be against
the 501(c)(3), not anyone personally.

Example: If violence is prohibited by the board of directors, and a member
assaulted another person, the offender would/could be arrested and sued
personally. The 501(c)(3) may also be enjoined if it can be proved that it
was negligent in providing ample security to prevent such an occurrence.
But, this is can be averted as in the case of an altercation in a shopping
mall. The establishment usually would not be sued if there was no liability
on the organization's part that contributed to the incident.

Example: If a member was slighted by the 501(c)(3) in any way by an
approved policy, then the 501(c)(3) will bear the brunt.

Example: If a director(s) slighted a member(s) and the action was
sanctioned or approved by the board of directors and/or membership, the
board member can be liable personally. (Bylaws or other policies may vary
on the actions of directors and simple members.)

For the last example, the organization should have insurance for each of
the board members. It usually is an extension of the regular insurance
applied at the time of purchasing the insurance and updated annually. Board
members may also be required by insurance to undergo ethics training,
sexual harassment training, workplace safety, etc. I would suggest the
board of directors to review its insurance policy annually at the time of
passing a new budget or budget review or insurance policy annual renewal.

I've had half dozen businesses in more than two states, been a director on
more than a dozen boards and currently serve on the city's Sunshine
Ordinance Task Force where we must undergo various required legal trainings.

Bruce Wolfe
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