Legal

Introduction

Fulfilling the legal reponsibilities of a nonprofit.

Overview

This section explains the legal responsibilities of nonprofits and free and fee-based legal resources.

Page Index

  • Key Issues
  • Common Problems and Solutions
  • Successful Strategies
  • Annotated Web Resources
  • Topic Library
  • Sub-Topics and Vendors


    • Key Issues Related to this Topic

  • Free and paid professional help is available for your organization to review its bylaws, organizational chart, meeting norms, grievance procedures, personnel policies, conflict of interest policies and other basic systems. Getting an outside review of these important documents can provide valuable feedback, from which your board and staff can have fruitful discussions to revise and update these documents.

  • Fulfill all legal responsibilities. Understanding and meeting the many legal responsibilities of a nonprofit corporation can be challenging. A trained board and trusted ongoing resources can lend your organization confidence that all legal responsibilities are being met.

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    Common Problems and Solutions

  • Prevent problems before they occur. Clear and established meeting norms, decision-making methods, grievance procedures, financial management systems and other policies will create open lines of communication within your group that can prevent and/or more quickly resolve problems and conflicts.

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    Successful Strategies

  • In working through conflicts, start with the most collaborative methods first. Management consultants and executive coaches can help members of your group see conflicts from a bigger systems view, remove the “personalities” involved in a conflict, and develop new policies and systems that will diffuse the problem. Mediation programs provide free, confidential trained mediators that have helped a number of neighborhood groups. If necessary, seek legal advise early on to take the steps that will remediate rather than inflame conflict.

  • Legal review of your group’s bylaws can be helpful. Lawyers who have experience with nonprofit organizations can assist your association to review its bylaws.

  • Have and remind board members of your Conflict of Interest Policy. Conflicts of Interest occur whenever a director of a nonprofit acts in a position of authority on an issue in which they, or members of their family, have financial or other interests. In cases of potential conflict of interest, directors must act to preserve and enhance public trust in the organization by putting the interest of the organization ahead of all other business and personal interests. Board members can meet these ethical and legal imperatives by stating, in general, their potential conflicts of interests at several designated board meetings each year, and by stating, in specific, their conflict of interest at the beginning of a meeting during which an item will be considered from which they can a gain financially or personally and refrain from voting on the item in question.

  • Prevent lawsuits. Minnesota State law normally shields the directors of nonprofit corporations from personal liability for actions they have taken to fulfill their board responsibilities. To preserve this protection, board members must adhere to certain standards of conduct: the duty of care, the duty of loyalty and the duty of obedience. To prevent accusations of slander, neighborhood staff and board members should not make unsubstantiated statements about others. Other lawsuits can be disproved by showing that your staff and/or board acted as a “reasonably prudent person.” Ongoing board training and periodic legal review and consultation can help ensure that your organization is operating in an effective and prudent manner.

  • Complete all required financial filings in a timely manner. A free booklet on the fiduciary responsibilities of nonprofit board members is available from the MN State Attorney General’s Office.

  • Insurance- required and optional types. The Cities of Minneapolis and St. Paul require that neighborhood associations and district councils have basic liability coverage and workers compensation insurance. In order to get workers comp insurance your organization must first get an unemployment number from the State of MN's Department of Economic Security. It is also important for your group to carry basic insurance covering your equipment and physical property.

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    Annotated WebLinks

  • Training sessions and sample documents
    Eve Borenstein Law Offices   03/28/03
    Legal requirements and non-legal administrative practice standards addressed in the linked article and the sample Articles and By-laws are reference points only. The sample Articles assume certain choices regarding corporate operations, and the sample By-laws are generic and reflect the author's bias toward certain administrative efficiencies. All of these texts are provided in a context that is NOT part of any engagement to provide legal, tax, or other professional services.

  • Legal Information from the Free Management Library
    Map for Non-Profits   03/28/03
    Helpful background information on legal issues and resources.

  • Background information for nonprofits
    MN Council of Nonprofits   03/28/03
    Information on the legal structures and requirements of nonprofits

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    Library

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    Vendors by Sub-Topic

    Legal Assistance  
        Centro Legal Inc.
        Legal Aid Society of Minneapolis (North Side)
        Legal Aid Society of Minneapolis (South Side)
        Legal Aid Society of St. Paul
        Legal Rights Center, Inc.


    Legal Information  
        MAP for Nonprofits
        MCDA - Community Outreach Department
        Minneapolis Community Development Agency
        Minneapolis Neighborhood Revitalization Program
        Minnesota Council of Nonprofits


    State/ Federal Agencies and their non-profit reporting requirements  
        Minnesota Council of Nonprofits


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