You might think that because you’re a nonprofit – doing so much good in your community – no one would sue you. When it comes to disputes, though, nonprofit organizations are just like any other business. They face many of the same types of legal issues as for-profit entities – and then some!
That’s when a litigation firm staffed with knowledgeable nonprofit attorneys can become invaluable to a mission driven organization.
Some of the most common disputes are:
- Board Division Disputes: Fundamental disagreement among passionate people about how to govern and operate an organization can lead to both sides grappling for control of the organization, often with the threat of legal action.
- Membership Derivative Suits: Statutory members of nonprofit organizations have standing in California to request and obtain various corporate and financial documents from the corporation. If the corporation refuses, suit can be brought against the nonprofit to enforce membership rights.
- Employment-related Disputes: Harassment, wrongful termination, and wage/hour disputes can often result due to a violation of contract terms.
- Contract Disputes: Many of the everyday transactions your nonprofit engages in – such as hiring a contractor to fix up your facility, buying equipment, and renting space for your office or for a special event – require more than just an oral agreement. To prevent misunderstandings and disputes, your organization should establish exactly what’s being agreed to, and put it in writing. That way, if a dispute arises – or the other party doesn’t do what was promised in the contract — you’ll have written evidence to present in court.
- Governance Disputes: Especially if the nonprofit organization has statutory members, the organization can face suits brought by disgruntled members of the organization. Typically, these disputes include allegations of fraud, embezzlement or financial mismanagement – allegations that the nonprofit organization can not simply ignore.
- Attorney General : The California Attorney General provides oversight over all charities operating within the state. Sometimes, if they believe they have reason to investigate the activities of a nonprofit charity they will investigate. If they believe they have evidence of wrongdoing, they will bring suit against the nonprofit organization and – in some cases – individual directors.