Nonprofits often hold events in order to raise funds for and awareness of their cause. Event venue rentals can be expensive, however. That leads many nonprofits to try to hold hosted events in the home of a board member, staff member, or other friend of the organization. While using someone’s home can a good idea, it comes with a few legal risks.
The main legal risks of holding a nonprofit event in someone’s home boil down to liability issues, meaning the question of who is responsible if someone gets injured during the event. Below are a few situations where legal risk can arise.
If someone is injured on private property, the property owner could be responsible for those injuries. But since the nonprofit is the entity holding the event, the nonprofit could be responsible for those injuries, as well.
Prior to holding the event, a representative of the nonprofit and the property owner should inspect the property where the event will be held to make sure it’s free from any defects that are potentially harmful. If there are defects, the property owner should fix the defect or have a sign warning of the defect.
For example, if the property’s front steps are crumbling, it’s possible that a guest will be injured going up or down the steps. If the property owner can’t fix the steps in time for the event, then the next best bet might be to bar off the steps and have your nonprofit advise attendees and staff to use another entrance.
While crumbling steps are an obvious defect that people should be able to see and avoid on their own, there could be other defects that aren’t so obvious. Special care should be taken to warn guests of any defect that can’t be seen by the naked eye. It’s also a good idea to create a contract that discusses liability issues between the nonprofit and the property owner, so that neither party is surprised if a legal issue comes up during or after the event.
Depending on the size of the event, your nonprofit could be using a combination of volunteers, contractors, and employees to help with the event, and become responsible for the actions of those people.
Because the event will be held on private property and because some of these people may be collecting donations, it’s best to make sure that each person working on behalf of the nonprofit has passed a criminal background check. Your nonprofit wouldn’t want someone convicted of theft to be in charge of donations, or to be caught snooping around someone’s private home.
It’s also important to sign a contract with each staff member, even if they’re volunteers. The contract should specify what their responsibilities are, and it should also include a liability waiver.
In addition to the possibility of an attendee getting injured on the property, an attendee could also be a source of legal risk if he or she injures another attendee during the event.
If planning to serve alcohol at the event, your nonprofit will be responsible for making sure that everyone who drinks is over the age of 21, and that attendees aren’t overindulging. Under social host laws, if attendees of your nonprofit’s event drink too much and cause injury to someone else or their property, your nonprofit, as the social host, could be found responsible for those injuries, especially if there was knowledge that the attendee was overindulging and/or if the attendee was a minor. State law varies on this subject, but most states have some variation of social host laws.
The best way to avoid this is, of course, not to offer alcohol. But if your nonprofit chooses to offer alcohol, make sure someone is responsible for checking IDs, or even issuing wristbands to those old enough to drink. Putting a drink limit in place can also help to ensure that attendee’s aren’t overindulging.
For concrete ways in which to deal with the risks described above, see Ways to Reduce Legal Risks When Holding a Nonprofit Event in Someone's Home.