In most states, charities are treated as legal entities that can both sue and be sued. This means that a charity has to abide by any contract that it enters into.
It also means that it must exercise the same duty of care as any other type of corporation would in the same situation. In addition, because nonprofits are structured similar to corporations, there will be limited liability for officers and board directors.
For example, if a creditor sues an organization to satisfy its debt, the creditor will only be able to take assets from the corporation and not from the officers or board members directly. You can sue a charity for a variety of reasons, but some common claims include the following:
- Breach of contract: If a charity fails to fulfill its obligations under a contract, you may be able to sue for breach of contract;
- Negligence: If a charity is found to have acted negligently and caused injury or damage, you may be able to sue for negligence;
- Fraud: If a charity has made false representations or has engaged in deceptive practices, you may be able to sue for fraud;
- Mismanagement: If a charity has mismanaged its funds or resources, you may be able to sue for mismanagement; and
- Personal injury: If you have been injured as a result of the actions of a charity, you may be able to sue for personal injury.
When Are Directors, Officers, and Members of a Charity Liable?
The officers and directors of nonprofits are provided with a large amount of discretion to manage their organization. The business judgment rule provides officers and directors with protections when making decisions on the management of the organization.
Generally, an officer or director will only be held liable in certain situations, for example, if they acted in bad faith. In the majority of states, members of the nonprofit cannot be held liable for their actions.
However, a nonprofit can be held liable for the actions of a member if that member was acting as an agent for the nonprofit within the course and scope of the organization. In other words, a member cannot be held personally liable unless they were acting on behalf of, or as an agent of, the organization.
What Are the Steps to Sue a Charity?
The steps to sue a charity are as follows:
- Consult with a lawyer: It is advisable to consult with a lawyer who has experience in the area of charity law, as charities have a special legal status and may have different rules and procedures that apply to them;
- Gather evidence: Collect any relevant evidence, such as contracts, documents, and witness statements, that will support your claim;
- File a complaint: File a complaint in the appropriate court, which may be a civil or probate court, depending on the jurisdiction and the nature of the claim;
- Serve the charity: The charity must be served with the complaint and given an opportunity to respond;
- Discovery: The parties will exchange information and evidence through the process of discovery;
- Trial: If the case goes to trial, the parties will present their evidence and arguments to the court; and
- Judgment: The court will issue a judgment based on the evidence and arguments presented.
It is important to note that the specific steps and procedures will vary depending on the jurisdiction, the nature of the claim, and the facts of the case.
What Qualifies as a Charity?
A charity is a type of nonprofit organization that is organized and operated for charitable, educational, religious, scientific, or other beneficial purposes. According to nonprofit organization laws and regulations, a charity must meet certain criteria to qualify as a tax-exempt organization.
Some of the criteria that a charity must meet to qualify as a tax-exempt organization includes:
- A charitable purpose: The organization must be organized and operated exclusively for charitable, educational, religious, scientific, or other beneficial purposes;
- No private benefit: The organization must not be organized or operated for the benefit of private interests, such as the benefit of specific individuals or the interests of a particular group of individuals;
- Public support: The organization must be supported by public donations, grants, and other forms of public support;
- No political activities: The organization must not engage in political activities or attempt to influence legislation; and
- Compliance with regulations: The organization must comply with all applicable laws and regulations, including those governing nonprofit organizations.
Charitable organizations are typically registered with the relevant government agency, such as the Charity Commission or the Internal Revenue Service (IRS) and must file annual reports and financial statements to maintain their tax-exempt status.
In addition to the above-mentioned criteria, the organization must be a legal entity such as a corporation, trust, or association. They should not be organized for the profit of any individual or group of individuals and should not be operated for the benefit of the private interest. And it should be operated to serve a public interest or public benefit.
What Is Charitable Immunity?
Charitable immunity is a legal doctrine that provides immunity from liability for charitable organizations, such as hospitals, schools, and religious institutions. The doctrine is based on the idea that these organizations are providing a public service and should not be held liable for injuries or damages that occur as a result of their activities.
The theory behind charitable immunity is that these organizations are providing a public service, and they should not be held liable for injuries or damages that occur as a result of their activities because they do not have the resources to compensate the victims, and they would not be able to continue providing their services if they were constantly facing lawsuits.
However, the doctrine of charitable immunity varies depending on the jurisdiction. Some states have abolished the doctrine, while others have limited it. Some states have also limited the amount of money that can be recovered from charitable organizations.
Are There Exceptions to Charitable Immunity?
There are some exceptions to the doctrine of charitable immunity:
- Negligence: Charitable organizations can still be held liable for injuries or damages that occur as a result of their negligence;
- Intentional wrongdoing: Charitable organizations can also be held liable for injuries or damages that occur as a result of intentional wrongdoing;
- Property damage: Charitable organizations can also be held liable for property damage;
- Statute law: Some states have laws that specifically hold charitable organizations liable for certain types of damages; and
- Waiver: Charitable organizations can waive their immunity by contract, agreement, or by statute law.
The doctrine of charitable immunity is a complex and nuanced legal principle, and it can vary depending on the jurisdiction. If you have been injured or have suffered damages as a result of the activities of a charitable organization, it’s important to consult with an attorney who has experience in this area of law to understand your rights and options.
Can I Sue a Charity for Breach of Contract?
Yes, it is possible to sue a charity by bringing breach of contract actions. Like any other legal entity, a charity can enter into contracts and can be held liable for any breaches of those contracts. A breach of contract occurs when one party fails to fulfill its obligations under the contract.
Common breach of contract actions that involve charities include:
- Failure to provide goods or services as specified in the contract
- Failure to make payments as specified in the contract
- Failure to comply with the terms and conditions of the contract
- Failure to comply with relevant laws and regulations
In order to sue a charity for breach of contract, you must be able to prove that:
- A contract existed between the parties
- The charity breached the contract
- You suffered damages as a result of the breach
When suing a charity, it is important to keep in mind that charities have a special legal status and may have different rules and procedures that apply to them. It is best to seek the advice of a lawyer who is experienced in the area of charity law and contract disputes.
Can I Sue an Employee of the Charity?
Regarding suing an employee of a charity, it depends on the circumstances of the case. Employees of a charity are generally not personally liable for the actions of the charity.
However, if an employee is found to have acted recklessly, negligently, or intentionally, they can be held liable for their actions. Additionally, if the employee is found to have made a contract in the name of the charity, they can be held liable for any breach of that contract.
It is also important to note that in some cases, a charity may be held liable for the actions of its employees if they are acting within the scope of their employment under the legal doctrine of vicarious liability. It’s important to consult with a lawyer experienced in the area of charity law and personal liability to understand your rights and options in this situation.
Should I Contact a Lawyer if I Want to Sue a Charity?
If you are considering suing a charity, it is highly recommended that you consult with a lawyer who has experience in this area of law. A personal injury lawyer can help you to understand your rights and options and can guide you through the legal process. They can also help you to gather the evidence needed to support your claim and can represent you in court.
