Nonprofit leaders are often so focused on the mission that they can overlook essential policies that underpin their business.
Many nonprofit organizations lack the formal policies that can protect them from harassment or discrimination lawsuits – and which are intended to protect employees as well, according to insurance and legal professionals.
In the months after the #MeToo movement took off, revealing patterns of sexual discrimination or harassment at workplaces across multiple industries, many nonprofit leaders realized they had nothing on paper that would spell out how their employees should report similar problems.
This lack of formalized policy is a common problem at many nonprofits, says Elizabeth Manchester, an attorney at Partridge Snow & Hahn LLP in Providence.
“Part of it can be that they really do need outside expertise to assist with drafting policies, certainly legal expertise in those areas,” she said. “A lot of times … while there may be board expertise in some areas, they really should have some check and balance in place, to have legal counsel review them.”
Manchester recently delivered a presentation to nonprofit executives in Rhode Island on key policies for nonprofits in the era of the #MeToo movement.
Organized by OceanPoint Insurance, a subsidiary of BankNewport, the Sept. 17 workshop directed at nonprofit professionals also included a tutorial for executives on managing unemployment insurance costs, including tax strategies.
‘Organizations are realizing they don’t have any policies in place.’
ELIZABETH MANCHESTER, Partridge Snow & Hahn LLP attorney
David Madara, nonprofit practice leader and client-relationship manager for OceanPoint, said he organized the event with the goal of having executives walk out with tangible information they can act upon.
Even smaller nonprofits understand that issues surrounding sexual harassment and discrimination could affect their organization, he said. The issue for them is that often they have high turnover and may lack the formalized job descriptions and updated policies that can help to protect the organization.
“What we’re facing now with the [#MeToo movement] is a heightened look, a heightened vulnerability, to discrimination and gender-related issues,” Madara said. “So, the policy that was put into place in the 1980s, and maybe updated in the 1990s, you’ve got to look at it.”
But no matter the size or mission, all nonprofits and for-profit corporations should be aware that certain behaviors can exist among personnel. So, boards must be aware of their responsibilities, Manchester said.
“A huge part of an obligation of a nonprofit board is to make sure there [are] appropriate governance structures in place and outlets for all the constituents of a nonprofit to have the opportunity to speak to someone, or speak to multiple people if they are experiencing some kind of harassment or discrimination,” she said.
Particularly in small nonprofits, she added, the organization may have a whistleblower, discrimination or sexual-harassment policy that identifies the “executive director” as the contact person for a complaint.
“And the problem with that, obviously, is if the person in leadership is perpetuating or causing the issue, [the employee] is not going to feel comfortable doing that or be able to,” Manchester said.
One positive outcome of the #MeToo movement has been a growing awareness that nonprofit boards have corporate and fiduciary obligations. For nonprofit leaders, this has translated into an understanding that it’s a good idea to have an annual, or periodic, review of the policies and procedures to make sure that checks and balances are in place and that people within the organization have avenues to report problems.
“A lot of organizations are realizing they don’t have any policies in place, or formalized procedures,” Manchester added.
Madara anticipated that executives would leave the workshop with a list of key operational policies, including formal, written job descriptions, review and evaluation procedures, and compensation policies that would start to build a framework.
He likened the internal reviews to the process that many employers went through after the Americans with Disabilities Act was created.
Insurance provides a defense and indemnification against losing cases that are brought for damages, he added, but employers have to also demonstrate that they took steps to educate and inform employees of anti-discrimination or harassment policies, which should be spelled out in employee manuals.
“The reality is that nine out of 10 of these cases, even when it comes to the point of a lawsuit, they don’t end up in court,” Madara said. “They end up with a negotiated settlement, or they end up getting dismissed. But that cost can run [to the] tens of thousands of dollars.”
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.
