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Who Can I Add to Our Email List?

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If someone gives me their email, may we add them to our email list? Or if someone has their email on their public website, may we subscribe that address?

We all want to build our contact lists to be sure we get the word out about the great work our nonprofits are doing and how people can be involved. That said, there are legal requirements you need to know and follow.

First, it is simply a best practice, and often legally necessary, to get permission from people before adding them to your list. If you’re having a conversation with someone, ask, “May I add you to our email list?” Odds are, they will say yes. If they say no, you probably wouldn’t want them on your list anyway. The main point is don’t assume because the person happened to share their email with you for some purpose that it’s OK to subscribe them to your list.

What about those email addresses you find on an organization’s website? Clearly, the emails are there for use by the public to communicate with the organization, but that doesn’t give you permission to subscribe them to your email list. You might, however, send them a single email that explains why you think they might want to receive your emails, and include a link for them to subscribe themselves.

Even when you have permission to include a person’s email in your list, be sure each of your marketing emails (e.g. your newsletter, announcements or programs or fundraisers, etc.) includes a link for people to opt out of receiving future emails.

Resources for further information:

Badly managed charity?

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What recourse does a member of the public have if there are concerns about how a public-benefit corporation is being run?

If you have reason to be concerned that a charitable nonprofit is being poorly managed, or worse, is somehow engaged in wrong-doing, there are several steps you can take.

First, educate yourself as much as possible. You want to be sure you are not misinterpreting or misunderstanding what’s going on. Ask questions. Talk to others involved with the organization. California law requires nonprofit corporations to provide certain documents, such as the organization’s application for tax exemption and annual informational returns, upon written request. If the organization refuses, this may be grounds for further action.

Familiarize yourself with the relevant sections of the California Corporations Code, especially those related to nonprofit public benefit corporations. This code outlines the legal requirements and obligations of such organizations.

Look up the organization’s records on the Secretary of State’s and Attorney General’s websites. Each has a simple search tool. You’ll be able to see if the organization is up-to-date with its required documents and filings.

Ultimately, if you are convinced there is something wrong, or if the organization refuses to provide the required documents, you may file an official complaint with the Attorney General’s office.

Investing your reserve funds

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Our board is looking to know legalities a nonprofit board should be aware of in deciding how to handle or invest a financial reserve.

When one of our nonprofits approached Spokes for help with that topic, our first reply was, “We are not attorneys, tax experts, or financial advisors.” That said, we can offer practical suggestions based on our experience with the many nonprofits we serve.

The most important thing to keep in mind is the board’s fiduciary responsibility to the organization. As part of that responsibility it must act with prudence and with the organization’s best interests in mind.

California has adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which provides guidelines for the investment and management of nonprofit institutional funds. It includes eight factors to consider:

  • General economic conditions.
  • The possible effect of inflation or deflation.
  • The expected tax consequences, if any, of investment decisions or strategies.
  • The role that each investment or course of action plays within the overall investment portfolio of the fund.
  • The expected total return from income and the appreciation of investments.
  • Other resources of the institution.
  • The needs of the institution and the fund to make distributions and to preserve capital.
  • An asset’s special relationship or special value, if any, to the charitable purposes of the institution.

In San Luis Obispo County, some of our smaller nonprofits with surplus funds have placed them in FDIC-insured certificates of deposit with varying terms to ensure that funds are available when needed. Nonprofits with greater reserves will want to adopt a sound investment policy in line with UPMIFA.

Learn more about UPMIFA.

Old Invoices

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Our Board recently received an invoice from someone doing social media and website work for our nonprofit, yet it was for work done over two years ago. How late can people submit invoices and still expect to get paid?

Generally, if your organization engaged a contractor to do work , the work was done, and you accepted it, your organization owes the contractor for the work. Not sending you a timely invoice is a poor business practice but does not cancel your obligation to pay for the services you received.

In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement. However, the creditor may still send you collection notices, call you to try to get you to pay, or report your debt to credit reporting companies.

Can we pay our volunteers?

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We appreciate our volunteers so much. Most of our nonprofits could not begin to provide services without the help of selfless volunteers. It’s natural to want to reward them. But can you pay them something for their hard work?

Frankly, no. California Labor Code has a strict definition of volunteer. It is someone who “performs work for civic, charitable, or humanitarian reasons…without promise, expectation, or receipt of any compensation for work performed.”

It is permissible to reimburse volunteers for necessary expenses incurred in their volunteer work for you. You can certainly have a volunteer appreciation party and treat everyone to some refreshments. Likewise, a token of appreciation such as some flowers, a plaque, or a framed certificate of appreciation is fine.

Just not cash or a check (or even a “cash equivalent” such as a gift card). From the IRS’s point of view, that would be income. From California’s point of view, it could make them your “employee.”

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