Updated Form 1023 Tuesday, Mar 13 2018 

Earlier this year the IRS updated Form 1023, the application through which over 1.5 million entities have gained recognition of tax exempt status.  As discussed below, I consider the changes incorporated to be reasonable and largely welcome.

The most noteworthy changes included 1) a lowering of application fees (invariably a welcome development for applicants), 2) an increase in the information required on the EZ form, and 3) some updating to the full form, reflecting ten years of changes, and elimination of some obsolete items.

The change in fee structure is noteworthy because it is unusual for a government agency to actually lower a fee for a service.

Form 1023.  The full Form 1023 application fee was reduced from $850 to $600.  The previous option of paying $400 for an organization with $10,000 or less in annual revenue was rightly eliminated.  Three years ago when the EZ form was introduced for organizations with revenues under $50,000 a year at a cost of only $275, the $400 option was rendered meaningless except in the less common case of an organization not qualified to file the EZ form, such as a church.

Form 1023-EZ.  The application fee for Form 1023-EZ has remained the same at $275, despite the fact that the IRS has increased the amount of information required on the application, likely resulting in greater IRS review time.  Paradoxically this increase in information required is actually a welcome change to the short form.  The qualifications worksheet for the earlier EZ form was simply incorporated by reference, rather than incorporating the relevant, deciding qualifications into the body of the form.  It was too easy for unknowing applicants to simply check a box that they were qualified to use the EZ form, that they were properly formed, had proper purposes, etc.  The new format requires an applicant to expressly verify that the organization is not a church, school, or hospital (for which the EZ form is inappropriate) before making application.  It also requires an applicant to iterate in words the main purpose for which the nonprofit organization was created.  Not all legal purposes qualify an entity for tax exemption.

Frankly, I believe that the IRS could have beneficially gone even further by incorporating the complete qualification worksheet in the form.  If excluding the qualification checklist from the body of the form was intended to make it easier to complete – a mere 2-page document compared to the intimidating stack of pages in the full Form 1023 – in essence the qualification restrictions appear meaningless.  Potentially (and what has been happening) as a result of the appearance of simplicity, unrepresented fledgling nonprofits will be lured into filing the form themselves without so much as a glance at the instructions or qualification worksheets.  This has resulted in some undesirable consequences for entities that were not formed properly, or were not qualified to use the EZ form in the first place.  Since the IRS does not require provision of the founding documents, these are sometimes improperly prepared.  At least some of the common mistakes could be prevented if the yes/no checklist for EZ qualification was in the body of the Form.

Group Exemption.  The Group Exemption application fee dropped from $3,000 to $2,000 in the latest revision of the 1023 family.  In years past there was the expectation among nonprofit professionals that the Group Exemption might be phased out eventually; this lowering of the fee would seem to indicate that such elimination is not on the IRS’ near-term agenda.

This reduction of the fee is reasonable in light of the fact that the application itself is one of the simplest in the 1023 family to complete.  In fact, there is not an official form for this process; a mere letter is required.  The requisite information to be enclosed in such letter is clearly prescribed in IRS materials.  Most entities seeking a Group Ruling have been in existence for some period, have already obtained an individual exemption, and are now seeking to restructure as a central organization in the hub of other mini-versions of itself.  In this scenario, there is less cause for concern on the part of the IRS since it has had a full opportunity to scrutinize the entity previously.  In consequence a lower price tag on the application is thought appropriate.

In fact, the IRS achieves its own purposes by granting Group Exemption rulings.  The central organization takes on the role of the IRS in that it evaluates its subordinates in the Group for proper tax exempt formation and operation on an annual basis.  Each year the central organization requires financials and updates from its subordinates and merely reports to the IRS as to which organizations should still be included.  Because most entities holding Group Exemption ruling are/have been advised by counsel, there will usually be a higher understanding of the exemption requirements with these central organizations; this will often, in turn, help the subordinates gain an understanding of exemption rules.  Because the subordinates are often smaller associations, this level of scrutiny achieves a greater compliance with requirements than if each filed the Form 1023-EZ on their own.

In the last five years there has been an ebb and flow in the IRS’ efficiency, which has resulted in widely varying wait times for exemption determinations.  Anecdotally, it was observed that in the heyday of recent IRS efficiency, around 2010 or 2011, some full applications flew through the examination process in as little as 5 weeks.  On the other hand, 2013 was observed to be the worst year – with wait times up to a year and a half for simple applications needing no interaction with the IRS; the applications were simply stuck in the ostensibly unmovable backlog and remained unassigned for months on end.  Due to this backlog the IRS created the Form 1023-EZ option for smaller organizations to get through the mire more quickly, allowing exemption specialists to focus on more complicated applications.

It remains to be seen, but I suspect that the IRS desires to encourage the pursuit of Group Exemption Rulings through this more accessible fee structure, thereby, as discussed, lessening its overall workload.

Overdue Updating.  In addition to removing the obsolete option for small organizations under $10,000 in annual revenue (mentioned above), the new Form 1023 also finally removed the messy red add-on guidance that graced the form for the last five years, directing applicants to override portions of the existing instructions.  Examples included the outdated mailing address instructions, as well as the nearly 2/3 page of confusing language that referred to the “advanced ruling” protocol, which has been obsolete since 2008.  The Form 1023 now appears much cleaner with the 2018 upgrade.

New IRS Procedure Grants Charities Greater Mobility Thursday, Mar 1 2018 

The IRS has recently released a revised Revenue Procedure giving tax exempt entities greater flexibility.  Previously an organization needed to decide at the onset where they wanted to be incorporated for the long haul, knowing that any future adjustment to the organization’s home state would require that organization to file the IRS Form 1023 “Application for Exemption” all over again.  These restrictions were unambiguous in the 40 and 50 year-old Revenue Rulings 67-390 and 77-469 which spelled out the requirements and provided clear examples.  As a result, it was unusual to see a charity switch locations due to the associated paperwork and hassles involved.

But now the IRS has expressly abandoned the restrictions of those Revenue Rulings and opened the door to new strategic possibilities for charities to consider.

With the same stroke the named regulations also stated that entities moving from one qualifying exempt structure to another would be excused from the need to reapply.  For example, an unincorporated association that has been approved for exemption and later becomes incorporated would – under the old rules – be required to apply all over again because a new legal entity had been created.  The rules now do not require reapplication in that scenario.

Rationale.  The rationale given for these changes is one of consistency.  The previous rules governing when an organization must re-apply for a FEIN, and when it must re-apply for exemption were not in line with one another, leading to somewhat irrational results.

Presumably this change will simplify matters for the IRS by creating a reduction in its workload once the redundant examination of “old-but-newly-headquartered” charities is eliminated.  The old law requiring a thorough examination of a charity which had changed nothing in terms of its exempt purposes, but merely its address may not have been the best allocation of scarce IRS resources – especially since the exempt organization would have already been scrutinized by the Service in determining qualification for exemption.

State Law.  This change in the rules will highlight the different corporate codes of the various states.  It will now be state rules that govern whether a charity can successfully transfer operations in one fluid motion, as opposed to the herky-jerky dissolution and reincorporation process.  The state tools to be used to make changes to an entity’s jurisdiction are the articles of domestication and articles of conversion, options currently available on a state-by-state basis.  It remains to be seen whether any changes to state codes or attempts at uniform protocol will follow this change in an effort to make the new IRS’s Procedure more seamless.

Potential Pitfall?  A conceivable area where the gate-keeping function might fall through the cracks, however, is in the case of a true “reincorporation” into another state, rather than just the filing of articles of conversion which could move the corporation to its new home under the same charter.  When unsupervised charities are writing their own articles of incorporation, things tend to go amiss.  One of the most-cited reasons for the rejection of a Form 1023 application is that the founding document either didn’t have a proper purpose clause or the required dissolution clause.

On the other hand, to the average visionary the idea of moving state locations might appear to be just the sort of legal matter that might warrant hiring an attorney for the process, which would (generally) lower the incidence of improperly scribed articles of incorporation.  Additionally, it might be assumed that an organization that was originally required to get it right in the first state would have a higher likelihood of getting it right in the second state, but time will tell.

It will be interesting to watch whether the added privileges of movement will lead to increased productivity in the exempt world, or if the released grip of IRS oversight will simply allow early-stage carelessness to sneak into the process.  Mistakes made in founding documents can lead to undesirable results.  If an entity builds on an improper foundation, the tax consequences can be bleak when the error is finally discovered.  Of course, the new IRS guidelines make clear that the organizational and operational tests are still required for any relocated entity, but how will this compliance be verified?  A relocated entity will, of course, be required to report the change on the following annual report to the IRS (Form 990), but the level of scrutiny given to the new incorporation documents remains to be seen.

Anecdotally, when the IRS made the Form 1023-EZ available, the rules regarding proper formation were still in place, but many start-up founders breezed right over these requirements.  This resulted in many improperly formed “charities” that had false assurances of status because they had forked over the $275 and gotten an official notice from the IRS.  The appeal of the “EZ” form has made it altogether too easy for well-intended charities to develop on improper foundations.

It will be interesting to watch guidance emerge to accompany this new latitude in the nonprofit world.

Parachurch Organizations & Housing Allowance Wednesday, Sep 4 2013 

Contributed by Katheryn Magill, Legal Assistant

Nothing in the following article should be relied upon as legal advice.

Parachurch organizations seeking to provide an ordained minister employee with a housing allowance that is exempt from taxation should first consider the question of legal qualification and second take care to follow proper procedure.

An ordained parachurch employee may be qualified to withhold a housing allowance from their gross taxable income if they meets one of three possible tests.

First, they might qualify if the ordained employee is acting on direct assignment by their church or denomination, even if their work for the organization is other than that ordinarily considered the work of a minister of the gospel.[1]

Second, they might qualify if the parachurch organization itself has a close affiliation with a church or denomination.  An organization is deemed to be under the authority of a church or denomination if it is “organized and dedicated to carrying out the tenets and principles of a faith in accordance with either the requirements or sanctions governing the creation of institutions of the faith.”[2] Furthermore, the connection should be demonstrable by things such as input into management, the ability to remove directors, the legal right to require annual reports, and financial support.[3]

Third, an ordained parachurch employee might qualify for an exempt housing allowance even if he is not on direct assignment from his church or employed by an organization with a close affiliation to a church if his duties include services ordinarily undertaken by a minister of the gospel.  These services might include things such as administering the sacraments, leading a worship service, or preaching,[4] but the specifics will vary depending on the faith tenets and practices of the faith the particular religious body constituting his church or church denomination.[5]

If it has been determined that the employee is eligible to exclude a housing allowance from his taxable income, care must be taken to ensure the proper procedure is followed.  There must be a documented action by the parachurch organization’s Board of Directors designating the amount of money as a housing allowance in advance of payment.[6]  This amount may be designated in the annual budget or an official designation may be recorded in a board meeting’s minutes.

[1] Treas. Reg. § 1.1402(c)-5(b)(2)(v).

[2] Treas. Reg. § 1.1402(c)-5(b)(2)(ii).

[3] Toavs v. Commissioner, 67 T.C. 897, at 904-905 (1977).

[4] Mosley v. Commissioner, T.C. Memo 1994-457.

[5] Treas. Reg. § 1.1402(c)-5(b)(2)(i).

[6] Treas. Reg. § 1.107-1(b).

Name Selection for a 501(c)(3) Public Charity Tuesday, Dec 13 2011 

Most clients that approach me for assistance with the § 501(c)(3) application have already determined a preferred organizational name and may have already put it into use.  However, many organizations that will depend largely upon public support from diverse donors do not fully grasp the significance of how name selection may impact fund raising.

A common practice is to select an organizational name that is internally significant, but which may not give any clues to the external world what the organization actually does.  While a name may not have universal appeal, it should appeal to those in the support base.  For example, terms that have common Christian connotation, such as “great commission,” may not be recognized by the secular world,

The chosen name should also be distinctive and not one likely to be confused with organizations having a similar name. Common terminology such as “New Hope” or “World Outreach” should be avoided for this reason.  While such terms may be meaningful to the organization itself and even vaguely communicate the organization’s activities to potential donors, the name is likely to be lost in the crowd.

While an organization’s founders may have opportunity to explain what the name means, this may not always be the case.  A prospective donor may encounter an organization’s name through a Google search, a listing on the ECFA’s website, or a list of ministries supported by a church.  In such cases it is best that the name appeals to the particular interests of potential donors.  If one has a strong interest in such areas as nursing home ministry, Hindu evangelization, or veteran care, for example, that person will be drawn to a name that informs them of an organization with that particular focus.  “New Hope” does not provide any helpful guidance as to the primary thrust of an organization.  There are many opportunities for giving through churches and various ministries for those desiring to “give” without a specific need in mind.  A ministry really needs to set itself apart by providing greater insight as to the actual work being performed.  Those who share an organization’s passion should be attracted by the name to support the work.

In addition to these practical considerations, state and national laws also addresses the name selection process.  All states have a requirement that a new corporate name not be confusingly similar to another name already registered in that state.  Also, the name generally must not be misleading by indicating that it is involved in certain activities when it is not.  These rules are defined for each state in the corporate or nonprofit corporate section of the state’s code.  For example, the name requirements for Georgia are found in § 14-3-401 of Georgia’s Code.

Federal trademark and servicemark law speaks to the use of the same name as an organization in another state.  One can search the website (www.uspto.gov) to ascertain what names are registered.  But while it is clear that an organization may not use a name that is registered as a trademark by another organization, there is less clarity on the use of an existing name that is unregistered.  Such questions generally fall to the common law of trademarks.  An existing organization may well seek legal redress if a new organization attempts to use the same name in the same market area. The possible related complications make it critical to avoid name duplication. Basic internet searches can alert an organization of potential duplications while other nonprofit listing sites such as http://www.guidestar.org are invaluable in establishing whether a particular name is already in use.

Short-Term Missions: Avoiding Liability Pitfalls Friday, Feb 4 2011 

By Michelle A. Adams
As appears in:   Robert J. Priest, ed. Effective engagement in short term missions: doing it right, Pasadena: William Carey Library, 2008.  Pp. 407 – 473.





When American churches and other non-profit organizations send out short-term mission teams, the thought of one of the team members ever bringing suit against the organization in the event of an unfortunate injury or disaster is often not considered.   It is normally expected that the individual participating in such trips does so with a servant’s heart in a cooperative spirit of ministry.  Most volunteers are willing to participate without compensation of any kind – even incurring expenses of their own.  Unfortunately though, the possibility of legal action being brought by team volunteers is all too real.

In keeping with the very nature and purpose of mission trips, the locations targeted for such activities are often lacking not only the influence of God’s Word, but also laws and a justice system based upon Devine absolutes; the resulting environment is inherently more tenuous and perilous from a legal standpoint..[1] The general lack of desirability of such locations as vacation sites may be partly due to this uncertain environment.  Although natural safety concerns may inspire some precautions and hesitations on the part of sending organizations, those organizations may actually be operating with even higher risks than they realize.

Case law directly bearing upon mission organizations acting in this capacity is lacking in breadth.  The writer has therefore attempted to summarize pertinent laws and to extract and extend appropriate conclusions from situations that could be considered related in the view of the courts.  This paper attempts to summarize the most common situations upon which such actions may be based, and to suggest measures that organizations can implement to minimize exposure to findings of liability.

1.1 Risk of Incidents Abroad

It is difficult to ascertain whether Americans are more in danger of being victims of crimes and accidents when they go abroad.  Statistics on all criminal incidents affecting Americans abroad are not readily obtainable, due to reporting inconsistencies.[2] Approximately 70 percent of road deaths occur in developing countries,[3] which are common areas for mission activity.  The same source estimates that at least 200 Americans die in auto accidents each year when they travel abroad.[4]

Issues resolved abroad involving foreign third-parties are not recorded in the U.S. court system.  Although legal claims arising abroad between Americans would likely be handled back in the United States,[5] most trial-level court cases are not publicly reported.[6] The bulk of perusable cases exist on the appeals level only, and it is notable that only 15% of civil cases are appealed,[7] thus the vast majority of cases are never documented in public reports.  Most cases in the U.S. are also settled out of court,[8] and thus are inscrutable for collective study.

And yet, incidents forming the potential basis of legal action do occur with some regularity.  In a sampling of 24,593 short-term mission team members sent out last year, 306 experienced some level of accident, criminal, political, health, or natural disaster.[9] Put another way, if each missions team last year had 20 members, roughly 20% of teams experienced an incident of the types described above.  The percentage of team members experiencing such incidents in 2006 actually increased by almost 38% over the previous year.[10]

In just 3 years between 1998 and 2001, the number of participants in short-term missions more than doubled,[11] and there is every reason to hope that this trend will continue in the future.  These trips tend to attract young participants, whether high-school church groups or college students perhaps obtaining credit at a Christian institution.  The younger the participants, however, the more likely they are to be inexperienced travelers, with consequently higher risk.

To varying degrees foreign mission fields will always have inherent exposures.  Although reliance on God’s sovereignty can be comforting, exercising good judgment is normally appropriate as well; though the cost of some litigation-prevention measures may well outweigh any likely benefit, just one successful liability law-suit could deplete an organization’s and thus limit future fruitful ministry.  Organizations must attempt to determine what is over-protection and what are prudent precautions to be taken.  Significantly, American religious organizations no longer have the protected status they once enjoyed when it comes to negligence liability.[12] Without that historic protection, charitable organizations need to be fully aware of their legal exposures in order to make a judgment as to when extra measures may be justified to minimize liability risks in order to most effectively accomplish the work for which they were formed.

1.2 Member’s Ability to Sue an Organization

Mission agencies comprised of members or organized as churches are not immune from a law suit merely because it was brought by an “insider.”  Until little over a decade ago, many religious organizations were immune from suits brought by their members.[13] The courts’ thinking was that a church operated like an unincorporated corporation, or a “quasi corporation” – where each member was involved in a joint enterprise with the whole.  By that reasoning it would be nonsensical for a member to sue the organization or another member of it; that would be like an entity suing itself.  Courts ruled accordingly, disallowing member to member or member to organization suits.[14]

This pattern broke in 1998 with the Indiana case of Hanson v. St. Luke’s United Methodist Church which overruled the quasi corporation theory and allowed suit by a member.[15] Since Hanson, other jurisdictions have followed this pattern.[16] There are consequently now less legal obstacles for mission trip team members today to bring and succeed in suits against their sending organizations.


Duty to Protect

2.1 – General Rule

The legally accepted general and natural rule is that people have no duty to protect others from a criminal assault or willful violence by a third-party.[17] It is important to note however that this general rule applies only in the absence of a statute to the contrary, a special relationship existing, or special circumstances.[18] In fact, suits for failure to protect against third-party crime is one of the fastest growing areas of tort litigation.[19]

The Restatement Second of Torts states, “It is probably impossible to state any comprehensive rule as to when a defendant will be liable for [an] intervening criminal act of a third person.”[20] In other words, there is room for judicial liberty in the law.  Although there is a general pattern of rules to follow with regard to the duty to protect and warn, they continue to shift.

2.2 – General Rule Set Aside:  Special Circumstances

Volunteering to Protect.  Mission organization should be cautious when making general promises of a safe mission trip.  A duty to protect can exist when one expressly volunteers to protect another under a theory of contract law[21] – a duty which the law will recognize and enforce.[22] In those situations, although the promise to protect must be expressed,[23] it need not be in writing to be binding.[24] For example, if an employer makes a promise to protect an employee, this promise becomes incorporated as part of the employment contract.[25] If a university volunteers to protect students against crimes by third-parties, a duty to exercise due care will accordingly be imposed upon them.[26] In one case a landlord had undertaken a program of security designed to protect tenants in their apartments, yet he failed to prevent one tenant’s rape.[27] In another a mall had arranged for parking lot security yet did not prevent an abduction and rape in that lot.[28] In these scenarios someone volunteered to protect another consequently giving a sense of security to the victim and legal liability was subsequently imposed for failure to protect.[29]

The duty to protect is not absolute in these contractual settings; it only exists to the extent of the voluntary undertaking.[30] A duty to protect is not breached if a victim assumed the risk of injury,[31] although it is important to note that the risk assumed by the victim must be the very risk that ultimately caused injury.[32] Even if a short-term mission team member signed a pre-trip release form acknowledging the risks of disease on the trip, if a political riot occurred (a danger not provided for on the liability release form), a court will likely find that the team member did not assume the risk for that variety of danger.  A promise made not to sue an organization for one type of injury does not protect that organization from every type of injury, particularly if the organization had expressly indicated that the trip would be safe in every other regard.

If a mission organization misrepresents its ability to protect its team members from a third party attack, this can be construed as misrepresenting the safety of the destination country; the organization could be liable in the event of an incident.  Unless an organization is prepared to do so it should not explicitly state that it will guard the team members from harm.

2.3 – General Rule Set Aside:  Special Relationships

Certain types of relationships tend to automatically create a duty to protect. These relationships usually involve employers and their employees,[33] property owners and their invitees,[34] and custodians and their wards.[35] Case law examples suggest the same duty applies to such relationships as between housing project owners and delivery men;[36] teachers and students;[37] jailers and prisoners;[38] doctors/hospitals and the nurses and patients;[39] and travel agency and traveler.[40]

Employers.  Even without an express agreement to do so, employers have an understood obligation to provide a safe workplace for their employees.[41] Employers also have the duty to warn their employees of any unusual perils at work which includes an anticipated criminal attack by a third-party.[42] This duty arises when an employer knows or should know of the potential harm and the employee is justifiably ignorant of that harm.[43] (The duty to warn will be examined more extensively below.)  A volunteer for an organization is often extended similar rights to that of an employee.[44] So, for example, whether a team leader was actually employed by the organization or was just a volunteer, the organization must provide a safe work environment for him.  The extent to which a court will apply this principle to mission field relationships has not yet been tested in case law.

Property owners.  Property owners also have a duty to protect the safety of their patrons – even without an express promise to do so.  Property owners are required to exercise reasonable care to keep the premises safe for invitees.  This principle has been interpreted by courts as a duty to protect in cases of bowling alleys, restaurants, pool halls, railroad stations, and theaters.[45]

Landlords have also been found liable for the crimes by third-parties against their tenants.[46] The landlord in Doe v. Dominion Bank of Washington had a duty to take reasonable measures to safeguard tenants from foreseeable criminal conduct in common areas.[47] A landlord who sets up a security program for tenants may be found negligent upon a failure of that security program to protect the tenants.[48] The same reasoning could conceivably be applied to crimes occurring at missionary guest houses or boarding schools where security programs are in place.

Custodians. When one takes custody of another there might be a duty to protect them; [49] this may be particularly relevant to mission trips .  The custodian/ward relationship requires that special protective precautions be taken – especially as it relates to children.[50] The courts have applied this principle to camps and schools and indicate it could apply to others as well.  In a case where a camper was sexually assaulted the camp owner was found liable because, although the camper was at the camp for free, she was in the camp’s care and the assault was foreseeable enough to impose a duty to protect her.[51] In another case example a school district was found to have breached its duty to protect a 12-year old student who was raped by one of her peers.[52]

In a similar case, District of Columbia v. Doe, a girl was kidnapped from her school and sexually assaulted.[53] The court recognized that the school was not to be the absolute insurer of the child’s welfare or strictly liable if harm should befall her, but it had the duty to provide reasonable and ordinary care for the student.[54] The “ordinary care” standard imposes a duty to protect when a third-party criminal act was reasonably foreseeable.  The court found that the kidnapping and assault could have been reasonably anticipated and guarded against.[55] Plaintiffs in this situation have to meet a heightened standard of proof, but showing foreseeability of the crime does not require the plaintiff to show that the same specific harm had occurred before.[56] In this case, the court examined a variety of factors and concluded that the school had reason to expect the crime.  The evidence showed that there were adult males regularly wandering the school halls, that there had been much sexual and violent activity in the surrounding areas, and that school security was deficient.[57]

Another “special relationship” is created when a custodian deprives a ward of the ability of self-protection.[58] In the case of James v. Meow Media, Inc., the court said if one takes another into custody and takes affirmative steps which prevent that person from protecting himself, there is a duty to protect that person.[59] In a scenario where a team leader has taken possession of the belongings, such as passports, keys, and money of the team members, that leader may be acting in a guardian capacity which implies to the member that the leader is responsible for such things as the team’s safety.  This is affirmed in the Restatement: “One who is required by law to take or who voluntarily takes the custody of another under circumstances such as to deprive the other of his normal power of self-protection, or to subject him to association with persons likely to harm him, is under a duty to exercise reasonable care so to control the conduct of third persons as to prevent them from intentionally harming the other or so conducting themselves as to create an unreasonable risk of harm to him, if the actor (1) knows or has reason to know that he has the ability to control the conduct of the third persons, and (2) knows or should know of the necessity and opportunity for exercising such control.”[60] An example might be a doctor or nurse who is under a duty to protect patients from attack by another patient or visitor.[61] By analogy, a team leader may have a duty to protect team members under his control from other people who the leader has intentionally placed in contact with the group, or even from other team members themselves.  If a team leader brings a dangerous individual along on the team who he should reasonably know to be a threat to the other team members, that leader and consequently the organization could be held liable for any resulting crimes committed against the others.[62]

Travel Agent.  If a travel agent knows or easily could have learned about the relevant safety exposures of visitation of a country, the agent may have a duty to inform the traveler.[63] By extension, if a mission agency sends out a missionary or team and fails to warn them of the risks, the court might impose liability because of the reliance issues similar to the travel agency scenario.

2.4 General Rule Set Aside:  Danger Was Foreseeable

More exceptions to the ”no duty to protect” general rule can occur when: (1) the crime was foreseeable, and (2) the defendant had a duty to take measures to guard against it, and (3) a balance of “fairness,” weighing several factors, demands such result.[64] The following is the basic and reoccurring analysis of foreseeability for third-party crime, though some courts vary in their approach.[65]

(1) Foreseeability.  If an organization could have anticipated the third-party crime, it is more likely to be found liable for failing to protect.[66] But to show the organization’s duty to protect against such crimes, the victim must show that the crimes were particularly foreseeable to the organization.[67] For example, knowing a location is generally criminally active is not sufficient proof of foreseeability.  Although there must be a logical connection whereby the defendant had an “increased awareness of the danger of a particular criminal act,”[68] the plaintiff is not required to show previous occurrences of the same crime.[69] It is insufficient proof, for example, of foreseeability to show that an area was a “high drug area” to suggest that a shooting was likely.[70] Similarly, in a case where presentation of expert evidence that an area was criminally active, based upon police reports, was not enough to show expectancy of shootings – primarily because there were no actual shootings found in those reports.[71]

(2) Victim’s Burden to Establish a Duty. A plaintiff’s burden to show failure to protect against third-party crimes is greater than for mere negligence;[72] the plaintiff must show that the criminal act was so foreseeable as to create a duty on the part of the defendant to guard against it.[73] Despite this hurdle successful suits of this nature have been increasing in the United States.[74]

Mission organizations should learn from the 2003 case Workman v. United Methodist Committee where a mere technicality kept the plaintiff from succeeding.[75] In Workman, a mother sued an organization for the death of her daughter in Somalia.  The daughter went to serve with that organization in a volatile area. The mother claimed that the organization had a duty to protect the daughter in that dangerous environment from crimes that were foreseeable and which should have been anticipated.  Although the plaintiff did not recover damages the court laid guidelines whereby an organization may be found liable for the damage caused by another’s crime. The organization escaped liability only because the daughter was deemed an “international contractor” rather than an employee.  Had a closer relationship existed the result may have been different.

Because the victim in Workman was an independent contractor, it made it harder for her estate to prove the organization had a duty to protect; if there were a closer relationship such as employer and employee, proving the duty would have been easier.[76] If a mission team is sent to a dangerous region the special relationship that results from children in the care of a team leader may make it easier for an injured plaintiff to prove that a duty to protect was owed and violated.

(3)  Balancing “Fairness.” Before finding that a defendant breached a duty to protect, courts will usually take a hard look at the relationship between the plaintiff and defendant, the nature of the risk, and the public interest in the proposed solution.[77] Because the abstract idea of foreseeability often cannot be easily solved by factual analysis, there is no cut and dry formula to ensure that one avoids all possible liability.  It is helpful, however, to examine the thinking of different courts that have been confronted with the “duty to protect” argument.  A range of fairness factors are considered: (a) defendant’s ability to protect, (b) inability of victim to protect himself, (c) economic factors, (d) vagueness of obligation, and (e) risk involved vs. social value, utility, or moral quality of defendant’s conduct.[78] It must also be observed that even if a practice is customary in a foreign country, this does not guarantee that the standard of reasonableness has been met.[79]

A few courts focus solely on the reasonableness and fairness of the result,[80] and in reality this may be the underlying theme of the “foreseeability” inquiry though few courts come out and actually label it as such.[81] Since judges have reserved the right to rule based on their perception of fairness, large organizations may have reason to fear adverse rulings from judges that – in the name of public policy – choose to allocate damages to the party that is most able to bear them.

(a) Defendant’s capability to protect.  If an organization is in a better position to protect an individual from harm, the court will often conclude that it should have done so. [82] Case law examples using this line of reasoning include (1) finding a church that should have protected one picnicker from another drunk picnicker[83] and (2) finding no duty to protect a guard from an oncoming dangerous intruder because the organization did not have time to warn, and it was therefore not capable of offering protection.[84] Thus lack of control can be a defense against a duty to protect charge.[85] Another approach to overcome the charge would be to show that increased precautions would not have prevented a criminal attack.[86] If a political riot, for example, catches a mission team and everybody else off guard, the mission organization could hypothetically argue that not only was it incapable of protecting victims on the team, but also the attack could not have been avoided by any reasonable measures on the part of the organization.  This defense will not always be convincing if the region was known to be dangerous, yet the informed organization chose to send the team despite the risks.

(b) Individual’s self-defense ability.  One’s ability to protect oneself is an important consideration and relevant to the mission field.  In a case where the victim actually had a gun in his hand pointed at the perpetrator and could have used it, the court found no duty to protect on the part of the defendant because the victim was able to protect himself.[87] However, in other cases, especially involving women and children, the duty was imposed upon organizations based upon the victims’ inability to protect themselves.  In a children’s camp where a sexual assault occurred the children’s inability to guard themselves contributed to the imposition of a duty on the organization to protect them.[88] Similarly, the owners of bathing pools had the duty to protect the women and children patrons who could not easily protect themselves in that environment.[89] The general rule is that an organization’s duty is proportionately greater when the victim is young or otherwise helpless, and is proportionately less where a victim is armed or otherwise prepared to attack and defend himself.[90] Short-term mission teams are overwhelmingly composed of young team members, frequently under the age of majority.  In those cases the scales would be tipped in favor of a finding that those organizations had a duty to protect based upon the injured team members’ inability to protect themselves.

(c) Economic factors.  Economic considerations become more evident after examining the special relationships that courts have determined to indicate a duty of protection.  Just like property owners owe a higher standard of care to invitees – because of the pecuniary interest in the invitees’ presence – employers and proprietors have a pecuniary interest in their relationships with employees and patrons.[91] Employers and proprietors have economic relationships with their employees and patrons.  A camp and camper relationship can also be considered pecuniary even if a camper did not pay to attend; courts consider the camper’s presence to have a “commercial angle” because more campers might be encouraged to attend based upon the experience of the first camper.  In a case where a camper was assaulted, the pecuniary relationship contributed to the finding of a duty to protect.[92] In a case of a church picnic brawl the courts saw the relationship between the church and the picnicker as pecuniary because an admission fee was charged; therefore, the duty to protect was heightened.[93]

Another economic consideration is that if providing protection would impose an economic hardship upon an organization, the courts will generally not expect that protection,[94] (although the economic hardship argument is not a carte blanche excuse for non-action when a situation calls for obvious action on the part of an organization).  This speaks to the reasonableness and fairness standard.

In summary, a sending organization’s potential duty to protect is made more likely if the court finds a pecuniary relationship.  Team members, even if volunteers, may be owed the same duties as the mission organization would owe an employee.

(d) Vagueness of obligation.  A fourth consideration is the level of vagueness surrounding the obligation to protect, and it amplifies the foreseeability requirement.  Unfortunate and unpreventable events do occur.  In a case example the court said that finding a duty to protect would require “extraordinary speculation inherent in the subject of deterrence of men bent upon criminal ventures,” and that a housing project could not always be responsible for the actions of an “unknown thug.”[95] The criminal act must not be vague.

(e) Social value of activity.  The last factor may be very relevant to mission organizations as they take risks for causes they consider to be of life and death import.  The court will balance the risk involved against the social value, utility, or moral quality of defendant organization’s conduct.[96] In balancing this component courts will look at whether the social value of the defendant’s action is legitimate, whether the action furthers the protection of that value, and the extent to which that value may be furthered by less dangerous means.[97] This is essentially a public policy expression.  If the courts do not esteem the Great Commission with the same regard as a mission organization they may determine that a short-term mission trip to a country that is under a US State Department advisory has unworthy social value in light of the risk of injury.  For example, when a plaintiff was injured while at a defendant’s unlawful after-hours bar where prostitutes were working,[98] the court declined to impose a duty to protect upon the defendant, finding no social value in such activities or the victim’s presence there.  Individuals treading outside the bounds of legality for the sake of a cause, (which can occur when man’s laws are in conflict with God’s laws), should take note          of this case example.  And although that case involved a situation of illegal conduct, it is not inconceivable that courts will begin to extend their judgment on legal or arguably socially redeeming activities in doing their risk assessments.


Duty to Communicate

3.1 – Duty to Warn

Closely related to the duty to protect is the duty to warn, which emphasizes communications rather than actions.  Travel to foreign countries is a circumstance where this issue arises.[99] Travel agents have a duty to warn travelers of the dangers of a destination when they have knowledge of such dangers or where they could easily obtain such information.[100] Travelers have expectations of worldwide safety or comfort that occasionally are not realized.  For that reason mission organizations should be aware of this cause of action and take it seriously; plaintiffs have been successful in such suits.  What one person may think to be common-sense travel knowledge another may find to be a litigable offense.

Superior knowledge.  If one is in a better position than another to know about travel dangers the courts are more likely to insist that the knowledge is disseminated.  A travel agent in Maurer v Cerkvenik-Anderson Travel was aware that three students had previously died in Mexico due to falls from moving trains, but he did not share that information with a student for whom he arranged a trip.[101] When that student met the same fate the court found that the agent had breached a duty to warn of the material dangers known to him.[102] A related case Loretti v Holiday Inns, Inc. produced similar results.[103] After being assured of a beach’s safety in the Bahamas a traveler was raped at gunpoint; she brought suit for failure to warn of the beach’s reputation and previous incidences of violence.[104] The court held that if the beach is unsafe and travel agents knew of the danger, they are liable for failure to warn.[105] In Rookard v. Mexicoach, the negligence of a Mexican bus driver caused an accident resulting in a suit by the passengers against an American bus company which had transported them part of the way, and then turned them over to a Mexican driver.[106] The passengers claimed that the American company should have warned them of the inherent dangers known to the American company of the bus rides in Mexico; the court agreed.[107]

In another case the mother of a teenage short-term traveler succeeded in an action against a travel agent because that agent failed to inform the girl that a visa was required to enter France.[108] Her daughter was denied entry and sent home.  The court described the travel agent’s role as an “expanding” one, saying travel agents “should be expected to provide information which is necessary and of importance to the traveler.”[109] The travel agent in that case was forced to pay all costs of the debacle.[110]

These cases should prompt the following questions before sending a short-term team: How much information do mission agencies currently share regarding previous mishaps experienced in the destination country?  When mission agencies are the ones arranging tickets and the itinerary, how likely would the court view that agency as having the same function as a travel agency and hold them equally responsible for the sharing of all pertinent travel information, rather than expecting the individual traveler to take that responsibility?

Closeness of relationship.  The type of relationship or level of reliance between the parties is important in determining one’s responsibility to warn the other.  As discussed previously, a protective relationship can be formed contractually, either expressly or through implication such as from the wording of a brochure.[111] In Stevenson v. Four Winds Travel, Inc., a traveler’s reliance on a brochure caused her to believe that she would be alerted of all potential perils; she brought suit after she slipped on a pier about which she was not warned.[112] The court said, “In view of emphasis that travel agency sponsoring tour put in its brochure on its tour escorts and directors, tour guest who relied on brochure had right to expect that tour director would warn her of slippery condition of pier on which she slipped while alighting from boat.”[113] The court found the tour guide had breached his voluntarily assumed duty to warn and awarded damages accordingly against the travel agency.[114]

In another case travel agents were invited to visit hotels in Mexico in hopes that the agents would recommend them to clients.[115] When one of the invited agents was killed a wrongful death claim ensued based on the fact that the corporation which invited the group down was aware that the area was overrun by bands of guerillas, making it dangerous for foreign visitors.[116] The court concluded that there was no duty to warn in this case because the relationship between the business invitees and the corporation was not strong enough to create such a duty.  The Restatement of Torts Second has an illustrative listing of special relationships that create the duty to protect or warn; yet this court pointed out that the Restatement disclaims itself as an exhaustive list.[117]

Because many travel agencies have been found liable for failure to warn and the Restatement consciously chose not to limit the possibilities for special relationships, [118] mission organizations should take this issue seriously.  In light of the similarities mission agencies have in common with travel agencies, it would be no leap for courts to rule that mission organizations have a duty to warn of dangers known to them or could easily be known to them about the short-term mission trip destinations.

3.2 – Avoiding Misrepresentation

Regarding safety.  To avoid claims of misrepresentation, it is advisable for organizations to provide complete safety and warning information to team members; the US State Department’s official report is one example of such information.[119] It is crucial that the organization not imply that a destination is safer than it really is.  Educational institutions occasionally encounter lawsuits associated with their study abroad programs, for misrepresentation regarding the safety or accommodations to be provided.[120] A statement can be considered fraudulent if the maker of the statement lacks confidence or a factual basis for the statement.[121]

Regarding program expectations.  In the case of Bird v. Lewis & Clark College, the institution was instructed to pay $5,000 in damages to a disabled person after it failed to accommodate her special needs on a study abroad program when it had earlier represented that it could do so.[122] The court declared there was a “special relationship” between the student and the college, even a fiduciary relationship.[123] The implication of an organization’s fiduciary relationship with a participant raises the duty of care in more ways than making accurate representations.  This relationship was declared, not because of any titles or expressions, but merely based on an examination of how the parties related to one another.[124]

A mission organization that assures team members of the safety of a region in order to induce participation is liable for fraudulent misrepresentation if there is not a good basis for such assurances.

Susceptibility to Liability.  Many states will not bind members of an organization to the liability inflicted upon that organization because of the torts of the other members.[125] On the other hand, states such as California are willing to extend this imputed collateral liability in the name of “fairness” when a third person has been harmed (although they decline to do so if the suit is brought by one of the members instead of a third-party).[126] The appropriate jurisdictional rules should be reviewed to determine if members of a mission team will bear the liability for the negligence of a teammate with whom they are engaged in a common task.


Duties Regarding Health Risks

4.1 – Duty to Protect against Health Risks

In addition to third-party crimes as discussed above, organizations could be liable for directing a team to a region with hazardous health conditions.  Special relationships whereby team members rely on the wisdom of a team leader or organization could infer that the existence of a duty to warn or protect against the dangers as outlined above.

Non-Delegable Duty. Sending a group to a disease-infested location or to a known center of an epidemic might be considered by the courts to be an inherently dangerous activity, and such action could trigger a “non-delegable” duty to protect.[127] In other words, this duty can not be circumvented through the use of the independent contractor argument.  Although the actions of independent contractors cannot normally impose liability on an organization using their services, inherently dangerous activities create an exception to this general rule.[128]

To be “inherently dangerous,” the danger could not be removed by simply exercising reasonable care without altering the identity of the activity in some material way.[129] If, for example, the mission of an agency was to send its teams only to locations infected with HIV in an effort to minister to those people, the identity of the activity would be greatly altered if the danger was circumvented by avoiding places infected with the disease.  Therefore, the trip might be considered an inherently dangerous activity because the very existence of the disease provides the basis for the organization’s activities.  Alternately, if an organization used an independent contractor for any of its work, and that contractor’s negligence resulted in the spread of a disease, tort liability might be imputed to the organization.  Although this scenario has not yet evidenced itself in reported case law, recent cases have shown the courts’ acceptance of the general theory.[130]

“Assumption of the risk” (see section 8.1 below) may provide a partial defense for an organization to leverage its non-delegable duty to protect during the “abnormally dangerous”[131] activity.  However, case law has shown this argument it is not always a complete defense,[132] although it may reduce any damages awarded in a comparative negligence jurisdiction.[133]

Delayed Injury.  Mission teams going overseas have been known to bring back diseases that they acquired.  In 2006, a girl who was on a mission trip visiting orphanages in Romania brought back the measles and spread the infection to 34 people in Indiana and Illinois.[134] It is conceivable that the sending organization could be liable for the damages of that infection if through some negligence on the organization’s part the disease was spread or if a court determined that the risk of infection outweighed any justifying social value that may have been derived from the trip.  If a mission team did not observe Department of Health warnings or take other preventative measures to avoid the spread of disease, the organization might be found negligent.

4.2 – Duty to Give Proper Care in Medical Crisis

If a team member is endangered through the act of another or illness with no contributing negligence on the part of the sending organization, there is no legal duty to rescue that individual, (unless there is an existing separate duty to protect).  There may also be a duty to exercise reasonable care.

In the situation of a medical emergency, unless a special relationship exists, one person is not required to come to the rescue or assistance of another,[135] (with the exception of when the danger is actually imposed by the first party).[136] However, if the injured or threatened party is under someone’s control, the controlling party must exercise reasonable care as they deal with that person.[137] The following is included in the Restatement of Torts as just one illustration of when duty to aid occurs:

A is a small child sent by his parents for the day to B’s kindergarten. In the course of the day A becomes ill with scarlet fever. Although recognizing that A is seriously ill, B does nothing to obtain medical assistance or to take the child home or remove him to a place where help can be obtained. As a result A’s illness is aggravated in a manner which proper medical attention would have avoided. B is subject to liability to A for the aggravation of his injuries.[138]

In the case of McNeil v. Wagner College a study abroad student was injured and a professor volunteered to assist her at the hospital.[139] The student later brought suit for her permanent injuries which she claimed resulted from the professor’s failure to interpret the foreign doctor’s recommendation for immediate surgery.  Only for lack of proof of the student’s claims did the court reject her claim.[140] Mission organizations should be aware of this exposure.  The professor that was helping the injured student at the hospital presumably had no intent of causing her additional harm, and nothing indicates his motives were anything but noble.  A similar scenario could easily occur in a short-term mission team setting.

The possibility of liability is not dispelled just because someone assists an injured person even if the helper is motivated only by a desire to help the injured.[141] Doctors and other medical professionals are protected from liability in this situation through the Good Samaritan statutes in many states.[142] (Only a few states extend protection to anyone rendering assistance at the scene of an emergency.)[143] Some states refuse to extend protection to those who already have a duty to protect.[144] If an organization has the duty to protect an injured team member any negligence of the organization that occurs while providing assistance is not excused by virtue of the emergency situation.


Negligent Hiring & Supervision

As the law has dispensed with the doctrine of charitable immunity, there has been an increase in suits against religious bodies under tort theories such as negligent hiring, retention, training, and supervision.[145] Any employment relationship may exist between a sending organization and the leader of the team opens the organization up to many duties and potential liabilities.  The selection of leadership is extremely important on mission trips.

Negligent hiring.  Employers can be found liable for negligent hiring of an unfit or incompetent employee.[146] Recently, lawsuits are increasing as the courts are more willing to scrutinize the hiring process in light of recent clergy sexual abuse cases.[147] To succeed in a negligent hiring action the plaintiff must prove (1) that there is an employment or agency relationship between the tortfeasor and the defendant employer; (2) that at the time of hiring the employer knew or should have known through the exercise of ordinary care of the employee’s unfitness or incompetence; and (3) the employee’s incompetence, unfitness, or dangerous characteristics proximately caused the plaintiff’s injuries.[148] Because this is a negligence standard the court will consider whether the employer took reasonable care throughout the hiring process; this involves making adequate inquiries into the background of the employee, observations of his character, investigation into his work experience, etc.,[149] unless such inquiry would have had no impact on the result.[150] It is important to note that even if the employing organization is not aware of any red flags, if the information indicating the employee’s unfitness was available or would have been discovered by exercising reasonable care, the organization is responsible for that knowledge,[151] as in the case in Evan F. v. Hughson United Methodist Church; in this case the church failed to investigate a pastor who later abused a 13-year-old boy.[152]

The degree of necessary precautions will depend on the role the employee is to play, the level of contact he will have with others, and consequently the opportunity he has to imperil others through his position.[153]

A harmed individual has better chances of succeeding in this action when his relationship to the employer was such that that employer’s hiring decisions would affect him,[154] creating a duty between the employer and the victim.[155] The employment choices of the organization in commissioning a team leader have a direct impact on team members of a mission trip, as there is heavy reliance upon the team leader for guidance and safety.[156]

Negligent retention & supervision.  An organization’s duty continues beyond the hiring stage; an employer has a continuing obligation to remove an employee from a position of power if that employer knows or should have known that the employee is unfit, incompetent, or dangerous in that role.[157] Doing a thorough investigation when an employee is hired is not adequate protection if the employee later shows signs of unfitness or incompetence.  If an employer fails to take action resulting in harm to the plaintiff, [158] the employer may be liable for that harm.[159] Incompetence includes things like carelessness, indifference, heedlessness, and recklessness.[160] Unfitness may include being accident-prone due to poor eyesight,[161] a propensity towards harmful behavior,[162] having a criminal record,[163] being prone to dishonesty,[164] etc.  At least one court has carved an exception to liability when the employee’s conduct was an independent act of intentional or criminal misconduct.

Mission agencies that send out teams should consider that inadequate training[165] which produces an incompetent leader may result in a negligent supervision suit if the organization retains that leader in his position despite displays of incompetence and further incompetence contributes to injury of a victim.  Likewise, as discussed further below, if an employee or volunteer for the organization demonstrates a likelihood to be sexually abusive to another team member, the organization must remove that person or incur liability exposure.

5.1 – Duty to Give Proper Instructions

Leaders of mission teams are also in a position to impute negligence to the sending organization by the organization’s failure to provide competent leadership.  The failure to give proper instructions during a construction project for example, can lead to organizational liability.[166] In Fernquist v. San Francisco Presbytery, the fall of a volunteer construction worker was attributed to improperly placed rafters.[167] The court held that whether the organization gave improper instruction or if one of the other workers had improperly performed the work – in either case the organization was negligent.[168]

5.2 Sexual Assault

If a team leader engages in independent criminal misconduct, such as sexual abuse, an organization may escape liable under the category of negligent supervision if it can be shown that the perpetrator acted independently in a criminal fashion.  Similarly, the rules of respondeat superior, (which impute liability of an employee onto the employer, discussed more below) may excuse the organization from liability if the employee was not acting within the scope of his employment.[169] The organization still may find itself liable for negligent hiring when the employer knows or should know of the employee’s unfitness.[170] In this regard potential liability under negligent hiring is broader than negligent supervision or respondeat superior.[171] A case example is Jones v. Trane, where the church negligently hired a priest with knowledge that he had previously abused children with whom he came in contact.[172] Because the priest’s behavior was outside the scope of his employment, the respondeat superior argument failed but the negligent hiring theory resulted in a finding of church liability.[173]

Employers have a duty to act reasonably in selecting employees and this duty may intensify depending on the employee’s intended role and the opportunity provided for harm to the public.  A leader in charge of an entire team of minors should be thoroughly scrutinized.  Sexual abusers tend to continue in their abuse.[174] If a sending organization failed to discover readily available information in an employee’s criminal record it has opened itself up to liability upon the malfeasance of the employee.

5.3 “Abnormally Dangerous” [175] Activities

If a team leader guides a group to a location with unavoidable high risks, thereby engaging the group in an “abnormally dangerous” activity,[176] the employee’s competence as a leader might be called into question.[177] A sending organization may be liable for negligent hiring or supervision if it placed a leader in a position to imperil the group.

5.4 – Ostensible Agency (Apparent Authority)

Normally an independent contractor’s negligence is not imputed upon the retaining organization.[178] However, the principle “ostensible agency” (sometimes called “apparent authority”)[179] says that if an injured party had reason to believe that an independent contractor was an agent or employee of an organization – and the organization was responsible for that belief and had reason to believe that the injured party would hold such belief[180] then the organization may be held liable for that injury, as if the negligent person was indeed an agent of the organization.[181]

In an article on liability issues for American students studying abroad, the author used this argument to show how an educational organization might be liable for the negligent actions of someone who is neither an employee or an agent if they were put in charge of the students; a tour guide or an adjunct teacher with the students in their care is an example of this situation.[182] Likewise, if a mission organization obtained the services of a guide or a missionary in such a way that was so seamless that the team members believed that the leadership was actually representing the authority of the organization, that organization may be liable for the injurious negligence of that independent worker.  The key is whether the injured party had reason to believe that the agency relationship existed.  Imposition of this duty might be dispelled by clearly informing the team members of the distinction.

5.5 – Non-Delegable Duties

As discussed above, hiring a third-party, an independent contractor, to lead an inherently dangerous activity is not a sure way to avoid liability.[183] Even though that leader is not an employee or agent of the organization, any negligence on his part which results in injury to a team member or an outsider might be imputed to the organization through the doctrine of non-delegable duties.[184] Although available records do not indicate that this legal argument has yet been applied to mission trips, it is a plausible application.


Premises Liability

Churches frequently use volunteer labor for construction projects at their locations as well as send teams around the world for projects such as building churches or schools.  It would be naive to believe that such projects using volunteer labor, even when comprised of the church’s congregation and in a spirit of collaboration on a religious project, can not or will not result in lawsuits when accidents occur.  It is further naivety to believe those lawsuits can not or will not succeed.  The laws of premises liability may be particularly relevant as short-term mission teams travel to churches and schools in other countries, going either to aid in construction or to help out in some other capacity.

6.1 – Charitable Immunity

Gone are the days of charitable immunity from premises liability.[185] The fact that a charity would be financially destroyed will not prevent a finding of liability against it.  In the past the “beneficiary theory” has allowed religious organizations, such as churches, to escape liability if the victim was receiving some sort of benefit from the individual’s presence on the church property, such as holding member status or the privilege of worship.[186] There is not much case support for the beneficiary theory due to its weak legal basis and the difficulty in determining at what point someone becomes a beneficiary.[187] There is even less support for another theory taken from a distortion of English common law, sometimes called the “trust fund” theory.[188] Under that concept churches and other religious organizations were essentially “trustees” for the resources of that organization.  Therefore, just as entrusted property is unreachable by suit, similarly the resources of an organization would be untouchable since they were intended only for the use of the organization’s beneficiaries.[189] Preservation of the trust was a higher priority than making negligence victims whole.

This view died in England quickly, lingered in the United States a while longer, but is now a highly criticized view, considered to be in derogation of public policy.[190] In accordance with the well accepted principles of respondeat superior, charitable organizations are also liable for the negligent acts or omissions of their agents (employees, officer, or members).[191] The non-profit status of an organization does not change the result.

6.2 – Duty to Invitees

There are varying standards of care for property owners, depending upon the relationship between the party entering the property and the property possessor.  The obligation accorded to “invitees” means that churches (and others) must adhere to a standard of ordinary care in keeping their grounds in a reasonably safe condition.[192] An invitee is anyone who enters the property under the express or implied invitation of the owner for a reason that is mutually advantageous or even solely advantageous to the owner.[193] If the individual’s presence on the property was for the benefit of that individual alone he would have a much heavier burden of proof in showing liability if he were injured.[194] When a congregant was injured in the slip and fall case of Sullivan v. First Presbyterian Church, the court said the church owed the plaintiff the “invitee” standard of care.[195] If the plaintiff had been considered a licensee she would have had to show “wanton and willful” misconduct to hold the church liable.[196]

Volunteers.  It is important to emphasize that even an organization’s volunteers can be considered invitees with a corresponding standard of care.  In Fernquist v. San Francisco Presbytery, a volunteer suffered a fall while building a dorm for a religious organization.[197] The court pointed out that the volunteer was there for the benefit of the organization and was therefore owed the invitee duty of ordinary care to keep the premises in reasonably safe condition or to warn of any dangers.[198] The plaintiff was successful in this case when he showed that the church had failed to do so.[199]

The “invitee” standard would be applicable for teams on a short-term mission trip sent to do construction work; thus the corresponding higher standard of care would be appropriate.

Open & obvious.  What condition constitutes “reasonably safe”?  Some dangers are so “open and obvious” that a property owner will not necessarily be held liable for injuries resulting therefrom.  When a volunteer fell from a ladder the court did not hold the landowner liable since the danger of falling is an open and obvious one when one mounts a ladder to a high place.[200] However the court went on to say that a landowner may be held liable for injuries resulting from an open and obvious danger when the landowner knew or reasonably knew that the individual would become distracted or forget about the danger for a moment.[201]

Ownership irrelevant.  A church’s or organization’s non-ownership of a construction site does not avoid the duty to provide a proper standard of care.  In Haugen v. Central Lutheran Church the church was the mere “occupier” and yet it owed a duty of ordinary care to its construction volunteer since the volunteer was considered an invitee.[202]


Liability to Third Persons

Beyond the duties a mission organization may owe to its team members, it might also owe duties to third-parties.  Under the doctrine of respondeat superior, if a member of a mission team commits a tort against a third-party the sending organization can be held liable for that tort – even if the team member is a volunteer.  Family members of an injured team member can bring wrongful death and loss of consortium suits against the sending organization for any negligence contributing to that injury – even if that team member previously signed a waiver releasing the organization from liability.

7.1 – Respondeat Superior

Like their for-profit counterparts, non-profit organizations can be held liable for the acts or omissions of their officers and employees. [203] As explained earlier, the notion of “charitable immunity” is largely a thing of the past.[204]

Employees / Officers.  If a team leader is employed by an organization or can be considered its agent, any negligence on his part can be imputed to the organization if he was acting within the scope of his employment when the negligence occurred.[205]

Volunteers.  Employees and officers are not the only ones who can be considered agents of an organization based upon the doctrine of respondeat superior; volunteers can also bring liability upon an organization they are serving.[206] In the aforementioned Fernquist case the court made it clear that if construction volunteers had been at fault for the personal injury of a colleague, fault would have been imputed to the organization, the principal, for whom they were acting as agents.[207]

For negligence to be imputed to an organization the volunteer’s continuous service is not required but the consent of the master, or manifestation of such consent, is necessary for the agency relationship to exist.[208] Like all agency law the most central issue in determining liability is control – more specifically, the right or obligation of the charitable organization to control the activities of the volunteer.[209] A court will look at the following factors in deciding if there was control: (1) the degree to which the charity orders the specific action on the part of the volunteer, (2) the degree of contact between the charity and the volunteer, both before and after the commission of the tort, (3) the structural hierarchy of the charity, and (4) the regularity of volunteering of services to the charity.[210] In a mission trip setting this agency status would ordinarily exist.

Courts today do not allow churches to successfully argue that their members, while helping with a construction project on the church property, are engaged in a “joint venture” which would bar their recovery against the church.[211] In Timmons v. Assembly of God Church of Van Nuys a volunteer’s eye was put out when a wire recoiled due to the negligence of another worker.  The church argued that it was a joint venture and it should be relieved of a duty of care; the court rejected that argument, imposing liability.[212]

7.2 – Wrongful Death & Loss of Consortium Litigation

In the Workman case a mother brought a wrongful death suit after the killing her daughter was killed during a relief mission to Somalia.  Despite the mother’s non-recovery under that argument, the organization was subjected to the costs and stresses of the litigation.  Had negligence been found the organization may have been liable on various theories of recovery.  Team members on a mission trip may willingly sign away all legal rights to recovery in the event of a disaster because they embrace the organization’s purpose and goals.  There is no guarantee, however, that the deceased’s family members will have the same outlook and they may bring a ruinous wrongful death or loss of consortium suit.

7.2(a) – In Case of Death

Wrongful Death.  If a mission team member dies due to negligence that can be attributed to the sending organization there are three kinds of losses whereby another party such as a parent might recover for the death in a wrongful death suit: (1) loss of support or services,[213] (2) loss of companionship, society, and affection,[214] and (3) mental anguish suffered.[215] Courts no longer insist that there be a pecuniary loss as a result of the death; emotional losses are also sufficient for recovery in some cases.[216]

7.2(b) – In Case of Injury

Loss of Consortium.  If the victim of a disaster is only injured through the organization’s negligence, the organization may still be liable to a third-party on the theory of “loss of consortium.”[217] Common law has long recognized a separate cause of action on the part of one spouse when his or her spouse is injured due to an organization’s negligence.  This action called “loss of consortium” or “loss of companionship” seeks to address the injury suffered by one spouse due to the injury or death of the other.[218] Damages awarded previously covered only loss of services such as the domestic services that a wife would provide a husband but such recovery evolved to include such aspects as love, affection, companionship, and sexual relations.[219]

Parental Consortium.  Recently at least eight jurisdictions have expanded loss of consortium to include losses experienced by children.[220] In those states a child may succeed in a “loss of parental consortium” suit if a parent has been constructively or actually removed from the plaintiff’s life.[221] In Ferriter v. Daniel O’Connell’s Sons, the children of a man paralyzed from the neck down from a negligent injury were permitted to recover for loss of parental consortium.[222]

Child Consortium.  Can the parental consortium theory be expanded to allow recovery by parents for the loss of consortium for an injured or killed child?  Because the legal theory is no longer limited to marital services but can include sentimental qualities, and because the theory has already been expanded to allow recovery by children for an injured parent, it seems reasonable to allow the reverse for similar reasons.  One rationale for expanding the legal theory from spouse to parental consortium in favor of children was highlighted in Ueland v. Reynolds Metals Co.[223] It is inconsistent to allow children to recover in the case of a parent’s death but not if the parent survived but was reduced to a vegetative state.[224] The same issue is present if a child exists in a vegetative state after an injury.  If a parent could recover under a “wrongful death” theory for a child’s death, the parent might also recover from the child’s constructive death, if the child was reduced to a vegetative existence.

Inferentially then, if a child is killed or injured on a mission trip, the sending organization might have to defend itself in a wrongful death or loss of consortium lawsuit by the child’s parents.  An adult injured on a trip may have beneficiaries with similar recourse.


Defenses & Preventative Measures

Though the above legal theories expose mission organizations to potentially perilous liabilities, they will not likely freeze the efforts of such organizations.  International Justice Mission plainly warns its volunteers that the work can be dangerous.  In a recent article “Dangerous Liaisons” a volunteer for that organization was quoted as saying, “In light of the dangers the victims face each day, we find in most cases that the risk of danger to ourselves is affordable, and a risk we’re willing to take.”[225] The article goes on to note that International Justice Mission plainly warns their volunteers that the work can be dangerous, which prompted the title for the article containing the quote.  Risks are inevitable; yet higher callings sometimes demand them.  Avoidance of unnecessary risks, however, contributes towards good stewardship of an organization’s resources.  Knowledge of the legal perils potentially impacting an organization’s ministry will enable an informed management to most effectively prepare for future ministry.

8.1 Assumption of the Risk

In a legal vein if an individual has “assumed the risk” of harm, he is barred from recovery for whatever injury results.[226] Assumption of the risk occurs when an individual has actual knowledge of (1) the danger involved, (2) an appreciation for the nature the magnitude of that danger, and (3) there has been an acceptance of the risk involved.[227] In the face of this knowledge, an individual proceeding voluntarily in light of the foregoing is deemed to have assumed the risk.[228] To voluntarily assume the risk means that an individual has an actual choice in the matter rather than being forced to do something; he must have had legal and moral alternatives before choosing the dangerous option before him. [229] This freedom of choice is a fact-intensive determination.

A mission organization may be able to avoid litigation by assuring that its agents have consciously complied with the personal commitments listed above.  If a team member was aware of the dangers of a situation, and chose to proceed voluntarily, he cannot later seek to impose liability upon the organization.

Note, however, that according to the court in Bennett v. Gitzen, children under the age of seven are incapable of assuming the risk.[230] Other courts may very well hold that older children, unprepared to make major life-affecting decisions are incapable as well.[231] This is particularly relevant when one considers how many young children are regularly brought along on mission trips with their parents.  According to case law, at least a child under seven cannot assume the risk even if he or she in fact entered into danger and acted with actual knowledge.[232]

Other statutes exist to protect young people, disallowing assumption of the risk defenses.  In the case of Jarrett v. Woodard Bros., Inc. a 19-year old college student drank too much alcohol at a restaurant using a fake ID, was struck by a car as a result and later died.[233] His parents blamed the restaurant and were successful against the restaurant’s assumption of the risk defense.[234] There was a law imposing strict per se negligence upon the restaurant owner for continuing to serve alcohol, even though he may have been deceived about the student’s age and the student made a choice to continue drinking.[235] Public policy laws often protect some young people from their own reckless behavior.

8.2 – Contributory Negligence & Comparative Fault

The states are divided[236] on the issues of contributory negligence and comparative fault.[237] If the mission organization is in a jurisdiction still applying contributory negligence, chances of a successful defense are better.  The contributory negligence states disallow recovery for a plaintiff when that individual was at fault to any degree whatsoever. [238] To determine if a plaintiff contributed in the negligence the question is whether the he exercised due care[239] and whether his conduct contributed to his injury?[240] Unless both elements are satisfied the plaintiff may not recover even if the defendant was partly to blame.[241]

Comparative fault states, on the other hand, divvy up an allocation of damages in accordance with actual portions of fault.[242] If a victim was only 20% at fault (as determined by a jury’s examination of the facts), then the organization may still be found liable for 80% of the damages.  Comparative negligence states abrogate the common law “all or nothing” approach[243] and make plaintiff’s recovery more likely since partial recovery is allowed.

8.3 – Releases

How effective are releases of liability?  Can signed forms from an organization’s team members shield it from the legal liabilities highlighted above?  There is certainly ample case law showing that – in the absence of fraud, duress, or mutual mistake by the parties – releases can be upheld.[244] Although the record varies, some courts have been willing to honor releases, even when they were prepared by the one who was negligent.[245] No magic language is required for a release (such as the word “release”) and it need not be done with perfection.[246] Aside from their legal merits, releases may serve as deterrents; people may refrain from filing suit if they have signed a release – either because they assume it to be binding, or because of a moral conviction that such promises should be honored.

A sending organization typically attempts to secure a release of liability form from the team members, similar to the practice of recreational organizations.  However, there is also adequate case law to place serious doubt upon the reliability of releases to fully protect an organization.  They are not the watertight protection that those employing them may believe them to be.  A number of cases show a rejection of such liability waivers when used for dangerous recreational sports and outdoor activities.[247] This case law can be instructive to mission organizations because of what both may have in common – dangerous activities.  Trips into foreign countries may be perilous undertakings, particularly if the teams are not headed to popular vacation destinations but, rather, to locations with US State Department advisories.

8.3(a) – Function & Validity of Releases

A release can indicate that the participant in an activity is assuming the risk of injury, or is releasing an organization from any future claims of negligence on its part relating to some activity.[248]

Even though the law generally favors attempts to minimize litigation through settlements and contractual agreements, such as releases,[249] the law also provides for compensation of injured parties when appropriate.  Releases are often interpreted in favor of a victim,[250] and there are many circumstances under which a release may be declared “void” or “voidable,”[251] circumstances which could arise in a short-term mission setting as well.

A release is “void”[252] when the one signing has no capacity to sign away the rights in question.[253] A child’s age may prevent him from having the legal power to sign a release, therefore rendering his signature ineffective.  In a New York case a fourteen year-old child’s signed release was not enforceable because of his age.[254] Releases on certain specific activities may be forbidden by statute.[255] Forged releases are clearly void.[256]

For states that allow “pre-activity” releases, not all have a statute, rule, or decision to allow parents to sign a pre-tort liability release on behalf of their children.  In New Jersey for example, a mother’s release of liability on behalf of her son before a skateboarding accident was held to be void from its inception.[257] In a similar Utah case the state considered the interest of the child to have priority, and held a release of liability by a mother for a horse rider to be of no consequence, holding that she had no authority to release liability on the part of her minor daughter before or after an injury occurred.[258]

As a general rule (though a few states have suggested otherwise), willful, wanton, or gross negligence can never be covered by a liability release.[259] Therefore if a mission trip team leader acting as an agent of an organization engaged in gross negligence that resulted in the harm of a team member, a prior release signed by the victim would be of no consequence in protecting the organization from liability.

A release may be considered “voidable,” which means that it can be voided by the signer, and therefore not enforced, (although the presumption of validity works against the signer). [260] When a challenge to a release occurs the courts consider four main factors: (1) the existence of any duty to the public, (2) the nature of the service performed, (3) whether the contract was entered into fairly, and (4) whether the intention of the parties is expressed in clear and unambiguous language.[261]

(1) Duty to the public.  A duty to the public factor often raises the issue of unequal bargaining power,[262] where a signer is at an obvious disadvantage placing him at the mercy of the other party’s negligence.[263] For that reason, in a case where a spelunking participant fell to his death on a guided tour, the court held that to enforce the release would be against public interest.[264]

(2) Nature of service provided.  Another factor considered by the courts is whether the party seeking exculpation was providing a service of great importance to the public.[265] As mentioned previously, religious organizations may rely less and less on a court’s sympathy with missionary causes.  This attitude may cause a court to reject the validity of mission trip releases when the court weighs the value of the experience against the risk a team member is assuming by signing away rights to sue.

(3) Fairness.  An agreement must be entered into fairly.  In the recreational activity setting the sophistication and experience level of the participant is important in determining fairness, based upon his ability to understand what dangers are associated with the activity.[266] Similarly an experienced missionary familiar with a particular region to be visited would be in a better position of anticipating the dangers associated with a trip than a new or younger member.

(4) Clear or ambiguous verbiage.  The wording of the release must be clear and unambiguous, written in layman’s terms so that both parties understand what is included in the release.[267] Two reasonable people upon viewing a release should be able to agree that the signer knowingly and willingly signed the document, while small print and other deceptive tactics are discouraged if not rejected outright.[268] The particularity with which the dangers are mentioned will also contribute to its clarity and thus its validity.  If the word “negligence” is actually used in reference to the conduct of the organization the anticipated dangers may be less particularized; whereas if no reference to non-liability for the organization’s negligence is made then the dangers for which the team member is assuming the risk must be clearly spelled out.[269] Either the exact dangers must be named, or the exculpatory words for the organization’s negligence should be obvious.

In a Wisconsin case a girl’s signed release at a swimming pool did not hold up in a wrongful death suit brought by her family, partly because the term “regardless of fault” was not explained in positive language to include negligence on the part of the establishment.[270] In another case a horse-riding establishment’s release was struck down partly because it was overly broad, including “any injury or damage from any accident, injury, or illness” and partly because it did not expound on the “unavoidable risks inherent to all horse-related activities.”[271] If the victim had been an experienced rider she might have already had a solid grasp of what risks are “inherent” to horse riding.

Finally, releases must be particularly stated; they can cover only that which was consciously and expressly intended to be covered at the time of the signing, and no more.[272] If a scenario arises during a mission trip that was not contemplated at the time a release form was signed, the release is ineffective.

8.3(b) – Forum Specification in Releases

To minimize the unknowns of shifting liability law, agreement on a choice of forum for resolution of any disputes is wise and such an agreement will generally be effective in jurisdictions where releases are permitted.[273] The distinctions between states could be crucial to winning or losing a case.  When disasters occur abroad an organization cannot automatically assume that its own state’s rules will govern; in fact, courts have been known to decide multiple issues using multiple states’ laws.[274] Note also that states differ in their acceptances of written releases.[275] When a choice of states is available an organization should make a strategic selection.

8.3(c) – Non-Effect of Releases on Third-party Claims

The signing of a release will not necessarily have any effect on third-party claims in the matter.[276] In some states a release cannot fully guard against loss of consortium claims.[277] In those states, loss of consortium is considered a common law right possessed by the surviving spouse; thus a prior release by the killed or injured spouse would have no bearing upon a surviving spouse’s claim.[278] In a case example, parents were not barred from bringing suit on the “loss of consortium” theory even though their daughter had signed a release on the same matter.[279] This lack of release protection reemphasizes the need for an organization to not fail in any duties to the victim from the onset, such as the duty to protect or warn the victim, if such a duty existed.

Summary on Releases

If releases of liability are used the sending organization must first check its jurisdiction’s rules to determine if any minors under consideration for the trip are able to have their parents sign the form or if they are prohibited from doing so by statute.  The organization then should make the release highly inclusive of every type of disaster it anticipates could occur, as releases will often be strictly construed, in favor of the signer.  Yet it must not be overly broad in describing the exposures; non-obvious terms must be defined and specified risks must clearly relate to the upcoming activity.  Lastly, the signer should have a thorough understanding of the document being signed and every disaster that is covered therein.  The more inexperienced or unsophisticated the signer the more this should to be emphasized.  If a serious information session occurs before the release signing, the chances of enforcement will be improved. A signer also must not be pressured in his decision, and if time can be allowed to let the team member take the release home with him and consider the matter before signing, all the better.  Inclusion of a “forum selection” clause in the organizational release form is also advisable.

8.4 – Additional Measures

There are programs and training that assists sending organizations in guarding against legal liabilities.  It is beyond the scope of this paper to discuss these additional precautions at length.  There are insurance companies that tailor travel insurance packages to short-term mission trips; the insurance companies will step into a situation when a disaster occurs, covering any liability that might be imposed upon the sending organization.[280] A moderate insurance premium may well be worth the cost if it eliminates the anxiety of risk exposure surrounding a trip.

Before liability is incurred, however, information may be the biggest asset organizations can wield in a self-protective fashion.  Information sessions with the team members giving them full disclosure on what they are going to be doing, where they are going, who speaks for the organization, and other topics highlighted in this paper would create an early defense against claims such as misrepresentation or ostensible authority, for examples.  The organization should obtain and disseminate as much public information as they are reasonably able to provide on the safety of the destination and any entry requirements their team members should know.  Those working with young people should have a background check to avoid negligent hiring issues; this could also be beneficial in the event they later prove to be unfit or incompetent.  Team leaders should be given clear insight into their roles as agents of the organizations, and all which that implies.

Aside from legal information, disaster reaction trainings are also available for organizations that send teams regularly to or tend to focus their efforts on disaster-prone regions.  Potential liability is reduced as team leaders are educated on appropriate responses in volatile situations.

8.5 – Calculated Risk

Some Christians may view these legal risks as insignificant when compared to the value of the work being performed.  Although God is sovereign,        the Christian yet has the responsibility for acting wisely.  Should Christians not be responsible with their knowledge of the world around them?  If being informed allows one to weigh the benefits of precautionary measures against the encumbrances thereof, Christians should make an effort to obtain such knowledge.

There may be times when the requirements of the legal system do not mesh with the goals that God has laid out for His people.  In some countries it is illegal to even utter the name of Jesus.  At those times, it is clear that Christians are expected to obey God’s laws rather than man’s.  Is there any reason why Christians would be less strategic in their fulfillment of the Great Commission than they would be in a secular endeavor?

There are times Christians are called to martyrdom for reasons that may be known only to God, so that He receives glory.  There are times God honors a waste of earthly wealth, such as prize perfume, so that He receives honor.  There are times disasters are permitted to strike to build faith and endurance.  But one is not called to haphazardly take unnecessary risks that could lessen the accomplishment of eternal goals, nor are we called to be loose stewards of the resources that God has given us and which other believers have entrusted to us, expecting our prudence.  Rather, we are clearly instructed to pursue wisdom[281] while seeking to have something to show for the riches God has bestowed;[282] as sheep in the midst of wolves, Christians are to be wise as serpents and harmless as doves.[283]

[1] AD2000. The Poor, The Unevangelized, & The 10/40 Window [map], August 1, 1990 edition. Cartography by GMI/GRDB (explaining that “10/40 Window” as it is termed, containing 2/3 of the earth’s population and is believed to be both the poorest region of the earth, as well as the least touched by the Gospel message.  Therefore, to the extent that poverty corresponds with crime, this region poses a threat to the missionaries pursuing it.).

[2] Daniel B. Kennedy & Jason R. Sakis, Tourist Industry Liability for Crimes Against International Travelers, 22 TRIAL LAW. 301, 302 (1999).

[3] Road Safety Overseas, available at http://travel.state.gov/travel/tips/safety/safety_1179.html (last accessed June, 2007).

[4] Id.

[5] See, e.g. Semmelroth v. American Airlines, 448 F.Supp. 730, 734 (E.D.Ill. 1978) (where appropriate venue for suit was Illinois when death occurred in Mexico, defendant was from Delaware, plaintiff from Illinois, and relationship formed in Illinois); Arno v. Club Med Inc., 22 F.3d 1464 (9th Cir. 1994); McGhee v. Arabian Am. Oil Co., 871 F.2d 1412 (9th Cir. 1989); Filartiga v. Pena-Irala, 630 F.2d 876, 885 (2d Cir. 1980) (stating that “[c]ommon law courts of general jurisdiction regularly adjudicate transitory tort claims between individuals over whom they exercise personal jurisdiction, wherever the tort occurred”); Jurisdiction To Prescribe With Respect To Effect Within Territory, Restatement (Second) of Foreign Relations Law of the United States § 18 (1965).

[6] Robert A. Sachs, Getting a Witness To “Walk the Line”: Accident Demonstrations at Videotaped Discovery Depositions, 30 Am. J. Trial Advoc. 487, 516 (Spring 2007) (stating “[O]ne only a small number of trial level opinions outside the federal system are ever published.”); See Laurel Currie Oates & Anne Enquist, Just Research § 2.1, 13 (2005); Helene S. Shapo, Marilyn R.Walter, & Elizabeth Fajans, Writing and Analysis in the Law 8 (rev. 4th ed. 2003).

[7] Thomas H. Cohen, Appeals From General Civil Trials in 46 Large Counties, 2001–2005, NCJ-212979, Bureau of Justice Statistics, available at http://www.ojp.usdoj.gov/bjs/abstract/agctlc05.htm (last accessed June 2007).

[8] 36 J. Legal Stud. 171 at 176; 75 UMKC L. Rev. 171 at 171; see also Russell Engler, Out of Sight and Out of Line: The Need for Regulation of Lawyers’ Negotiations with Unrepresented Poor Persons, 85 Cal. L. Rev. 79, 108. (1997) (describing how in New York City Housing Court, “most cases are settled with only minimal supervision by the court”) (quoting 144 Woodruff Corp v. Lacrete, 585 N.Y.S.2d 956, 960 (Civ. Ct. 1992)); Vincent R. Johnson, Americans Abroad: International Educational Programs and Tort Liability, 32 J.C. & U.L. 309, 314, (stating that “[b]ecause of the tendency of tort cases to be settled, rather than fully tried, the number of unreported cases based on harm to students participating in study abroad programs may be considerably larger than what appears in legal research databases.).

[9] Based upon data from an ongoing survey study initiated in 2007 by Scott Ross and Michelle A. Walker which inquired into the volume of disasters occurring during short-term mission trips organized through mission agencies in the years 2005 and 2006.

[10] See Id. (showing the percent of team members experiencing disaster in 2006 was 1.2%, compared to .87% in 2005.).

[11] A. Scott Moreau and Mike O’Rear, All You Ever Wanted on Short-term Missions, Evangelism and Missions Information Service, January 2004 (reporting that “the number of people going on short-term mission trips reported by the United States agencies listed in the Handbook grew from 97,272 in 1998 to 346,270 in 2001; an astounding 256% in three years.”).

[12] Abrogation of immunity, 14 C.J.S. Charities § 99 (June 2007) (stating “In many jurisdictions, the doctrine of immunity of a charitable institution for its torts has been abolished or repudiated and is no longer applicable,” explaining two-fold reason for change: “it both assures payment of any obligation to the person injured and gives a warning that justice and the law demand the exercise of care.”); Tort immunity of nongovernmental charities—modern status, 25 A.L.R.4th 517 (Originally published in 1983).

[13] Hanson v. Saint Luke’s United Methodist Church, 704 N.E.2d 1020,1022 (Ind. 1998); Between societies and their members, 77 C.J.S. Religious Societies § 143 (June 2007) (stating “An action may be maintained between a church and its members or officers.”).

[14] See, for example Goard v. Branscom, 189 S.E.2d 667, 670 (N.C.App. 1972) (stating “We think, however, that one of the material differences between a church or denomination, religious society or congregation (a Quasi corporation) in North Carolina and a real corporation organized or existing pursuant to statutory law, is that a member of such a Quasi corporation is engaged in a joint enterprise and may not recover from the Quasi corporation damages sustained through the tortious conduct of another member thereof.”) and Zehner v. Wilkinson Memorial United Methodist Church, 581 A.2d 1388, 1389 (Pa.Super.,1990) (stating “the members of an unincorporated association are engaged in a joint enterprise, and the negligence of each member in the prosecution of that enterprise is imputable to each and every other member, so that the member who has suffered damages …through the tortious conduct of another member of the association may not recover from the association for such damages.”).

[15] Hanson, 704 N.E.2d 1020.

[16] Cox v. Thee Evergreen Church, 836 S.W.2d 167 (Tex. 1992); Crocker v. Barr, 409 S.E.2d 368 (S.C. 1991); Burkhead v. American Legion Post No. 51, Inc., 332 S.E.2d 311 (Ga. App. 1985); Bourgeois v. Jones, 481 So. 2d 145 (La. Ct. App. 5th Cir. 1985), writ denied, 484 So. 2d 136 (La. 1986); Ayash v. Dana-Farber Cancer Institute, 822 N.E.2d 667 (2005), cert. den., 126 S. Ct. 397; Suits by members of unincorporated association against other members allowed by statute: Buteas v. Raritan Lodge No. 61 F. & A.M., 591 A.2d 623 (N.J.Super.A.D. 1991); Tanner v. Columbus Lodge No. 11, Loyal Order of Moose, 337 N.E.2d 625 (Ohio 1975).

[17] Duty to Protect Others from Criminal Attack, 57A Am. Jurisdiction. 2d Negligence § 96 (updated May 2007); Duty To Act For Protection Of Others, Restatement (Second) of Torts § 314 (1965); Toadvine v. Cincinnati, 20 F.Supp. 226 (E.D.Ky.1937); Gilbert v. Gwin-McCollum Funeral Home, Inc., 106 So.2d 646 (Ala. 1958); Louisville & N.R. Co. v. Scruggs & Echols, 49 So. 399 (Ala. 1909); Allen v. Hixon, 36 S.E. 810 (Ga. 1900); Hurley v. Eddingfield, 59 N.E. 1058 (Ind. 1901); Osterlind v. Hill, 160 N.E. 301 (Mass. 1928); O’Keefe v. W.J. Barry Co., 42 N.E.2d 267 (Mass. 1942); Matthews v. Carolina & N.W.R. Co., 94 S.E. 714 (N.C. 1917); Schichowski v. Hoffmann, 185 N.E. 676 (N.Y. 1933); Stager v. Troy Laundry Co., 63 P. 645 (Or. 1901); Prospert v. Rhode Island Suburban R. Co., 67 A. 522, (R.I. 1907); King v. Interstate Consolidated R. Co., 51 A. 301, (R.I. 1902); Riley v. Gulf, C. & S.F.R. Co., 160 S.W. 595 (Tex.Civ.App. 1913); Sidwell v. McVay, 282 P.2d 759 (Okla. 1955); Yania v. Bigan, 155 A.2d 343 (Pa. 1959).

[18] General rule of nonliability, 57A Am. Jur. 2d Negligence § 96 (May 2007) (explaining that “special relationships” refer to situations where the defendant is in a position that implies that he will be looking out for the welfare of the plaintiff, while the “special circumstances” includes times where the defendant created an opportunity and temptation for crime to occur.)

[19] Negligent Hiring and Retention of An Employee, 29 Am. Jur. Trials 267 § 1 Scope (May 2007).

[20] Restatement 2nd of Torts §§ 448-449.

[21] Duty voluntarily assumed or undertaken, 10 A.L.R.3d 619 § 4 (Originally published in 1966).

[22] Id.

[23] St. Louis-San Francisco R. Co. v Mills, 271 U.S. 344 (U.S. 1926)

[24] Hansen v Dodwell Dock & Warehouse Co., 170 P 346 (Wash. 1918).

[25] Duty voluntarily assumed or undertaken, 10 A.L.R. 3d 619 § 4 (Originally published in 1966).

[26] Mullins v. Pine Manor College, 449 N.E.2d 331, 336 (Mass. 1983).

[27] Johnson v Goldstein, 864 F Supp 490 (E.D. Pa, 1994).

[28] Jardel Co. v Hughes, 523 A2d 518 (Del Sup. 1987).

[29] Johnson v Goldstein, 864 F Supp 490 (ED Pa. 1994); Jardel Co. v Hughes, 523 A2d 518 (Del Sup/ 1987).

[30] Jackson v. Shell Oil Co., 650 N.E.2d 652, 657 (Ill.App. 1 Dist. 1995).

[31] Assumption of Risk; In General, 65 C.J.S. Negligence § 360 (stating “Under the doctrine of assumption of risk or assumed risk, one who voluntarily exposes himself or herself, or his or her property, to a known and appreciated danger due to the negligence of another may not recover for injuries sustained by such exposure.”); Lowry v Atlanta Joint Terminals, 89 S.E. 832, 833 (Ga. 1916).

[32] Knowledge And Appreciation Of Risk, Restatement (Second) of Torts § 496D (1965) (stating “Except where he expressly so agrees, a plaintiff does not assume a risk of harm arising from the defendant’s conduct unless he then knows of the existence of the risk and appreciates its unreasonable character.”).

[33] Employers, 10 A.L.R. 3d 619 § 14 (Originally published in 1966) (stating “Employers have often been subject to claims by their employees for injuries resulting from criminal attacks by third persons.”).

[34] Doe v. Dominion Bank of Washington, 963 F.2d 1552 (C.A.D.C. 1992); also see Duty to maintain safe premises, 10 A.L.R. 3d 619 § 5 (Originally published in 1966) (stating that the responsibility to exercise ordinary care in maintaining safe premises “has been held to include an obligation to protect patrons from criminal attacks by third persons.”).

[35] Duty of custodian of persons, 10 A.L.R. 3d 619 § 8 (Originally published in 1966) (stating “Persons who become custodians of others, especially of children, thereby place themselves in a special relationship which requires special precautions.”).

[36] Goldberg v Housing Authority of Newark, 186 A2d 291 (N.J. 1962).

[37] McLeod v Grant County School Dist., 255 P2d 360 (Wash. 1953).

[38] Special Relations Giving Rise To Duty to Aid or Protect, Restatement (Second) of Torts § 314A (1965), 320; Bloxham v. Glock Inc., 53 P.3d 196, 274 (Ariz. Ct. App. Div. 2 2002).

[39] University of Louisville v Hammock, 106 SW 219 (Ky. 1907); Sylvester v Northwestern Hospital of Minneapolis, 53 N.W.2d 17 (Minn. 1952); Bullock v Parkchester General Hospital, (N.Y.A.D. 1957) 160 N.Y.S.2d 117, affd 150 N.E.2d 772.

[40] Casey v Sanborn’s, Inc. of Texas, 478 S.W.2d 234 (Tex.Civ.App. 1972) (travel agent was liable to a traveler for injuries received in an automobile accident in Mexico because the driver’s negligence amounted to a breach of the travel agent’s implied agreement to furnish safe, or nonnegligent, passage.)

[41] Duty to maintain safe place to work, 10 A.L.R. 3d 619 § 6 (Originally published in 1966); Am Jur, Master and Servant (1st ed § 183).

[42] Duty to maintain safe place to work, 10 A.L.R. 3d 619 § 6 (Originally published in 1966).

[43] Id.

[44] The volunteer’s rights are likened to an employee when he is recognized by the organization as being under its control, and is without personal interest in the matter; see Generally; volunteers and gratuitous employees, 27 Am. Jur. 2d Employment Relationship § 237 (stating “[A] person who might be thought of as a volunteer in the sense of performing work for another without the prospect of compensation may be owed the duties owed to an employee, where he or she is an assistant or substitute procured by an employee with the consent of the employer (which consent may be inferred from the nature of the work to be performed or from the employee’s general course of conducting the employer’s business), or where he or she is recruited by an employee under the emergency employment doctrine.  In addition, it is sometimes said that to be properly termed a volunteer, a person must have no personal interest in the services that he or she performs.”).

[45] Duty to maintain safe premises, 10 A.L.R. 3d 619 § 5 (Originally published in 1966); Am Jur, Negligence (1st ed § 131).

[46] Landlord’s liability for failure to protect tenant from criminal acts of third person, 43 A.L.R.5th 207 (Originally published in 1996).

[47] Doe v. Dominion Bank of Washington, 963 F.2d 1552 (C.A.D.C. 1992).

[48] Feld v. Merriam, 485 A.2d 742 (Pa. 1984).

[49] Duty of Custodians of Persons, 10 A.L.R. 3d 619 § 8 (Originally published in 1966).

[50] Id.; see also Brown v. Knight, 285 N.E.2d 790, 792 (Mass. 1972).

[51] Wallace v. Der-Ohanian, 199 Cal.App.2d 141 (Cal.App. 1962).

[52] McLeod v. Grant County School Dist. No. 128, 255 P.2d 360 (Wash. 1953).

[53] District of Columbia v. Doe, 524 A.2d 30 (D.C. 1987).

[54] Id. at 32.

[55] District of Columbia, 524 A.2d 30.

[56] Id. at 33.

[57] Id. at 35.

[58] Thornton v. City of Flint, 97 N.W.2d 485, 493 (Mich. App. 1972).

[59] James v. Meow Media, Inc. 300 F.3d 683, 694 (Ky. 2002).

[60] Duty Of Person Having Custody Of Another To Control Conduct Of Third Persons, Restatement (Second) of Torts § 320 (1965).

[61] Reasonableness; fairness, 10 A.L.R. 3d 619 § 10 (Originally published in 1966).

[62] Brisbine v. Outside In School of Experiential Education, Inc., 799 A.2d 89, 93 (Pa.Super. 2002) (where court said a duty to control can be imposed on one who is in charge of individuals with dangerous propensities.).

[63] Creteau v. Liberty Travel, Inc., 195 A.D.2d 1012, (N.Y.A.D. 4 Dept. 1993) (stating “where the agent has knowledge of safety factors or where such information is readily available, a travel agent has the duty to inform the customer of those factors.”); Wilson v American Trans Air, 874 F.2d 386, 390-391; Fling v Hollywood Travel & Tours, 765 F Supp 1302, 1305, affd 933 F.2d. 1008; cf., Levin v Kasmir World Travel, 143 Misc 2d. 245, 247; see generally, Dickerson, Travel Law § 5.03 [3]; Annotation, Liability of Travel Publication, Travel Agent, or Similar Party for Personal Injury or Death of Traveler, 2 ALR5th 396).

[64] Duty to Protect Others from Criminal Attack, 57A Am. Jurisdiction. 2d Negligence § 96 (updated May 2007).

[65] Foreseeability, 10 A.L.R. 3d 619 § 11 (Originally published in 1966).

[66] But see Foreseeability, 10 A.L.R. 3d 619 § 11 (Originally published in 1966) (explaining that some courts have held that the criminal acts of a third-party can never be the logical end to another’s actions, thus calling into question the “proximate cause” requirement for tort liability.).

[67] Workman v. United Methodist Committee on Relief of the General Board of Global Ministries of the United Methodist Church, 320 F.3d 259 (C.A.D.C. 2003).

[68] Id.

[69] District of Columbia, 524 A.2d at 33.

[70] Workman, 320 F.3d 259.

[71] Potts v. District of Columbia, 697 A.2d 1249 (D.C.App. 1997).

[72] Bailey v. District of Columbia, 668 A.2d 817 (D.C. 1995).

[73] Clement v. Peoples Drug Store, 634 A.2d 425.

[74] Negligent Hiring and Retention of An Employee, 29 Am. Jur. Trials 267 § 1 (May 2007).

[75] Workman, 320 F.3d 259.

[76] Workman, 320 F.3d at 264.

[77] Reasonableness; fairness, 10 A.L.R. 3d 619 § 10 (Originally published in 1966).

[78] Reasonableness; fairness, 10 A.L.R. 3d 619 § 10 (Originally published in 1966).

[79] Factors Important In Determination Of Standard Of Reasonable Conduct, Restatement (Second) of Torts § 295A cmt. c (1965) (stating  “No group of individuals and no industry or trade can be permitted, by adopting careless and slipshod methods to save time, effort, or money, to set its own uncontrolled standard at the expense of the rest of the community. If the only test is to be what has always been done, no one will ever have any great incentive to make any progress in the direction of safety.”) (also stating that “whenever the particular circumstances, the risk, or other elements in the case are such that a reasonable man would not conform to the custom, the actor may be found negligent in conforming to it; and whenever a reasonable man would depart from the custom, the actor may be found not to be negligent in so departing.”).

[80] Reasonableness; fairness, 10 A.L.R. 3d 619 § 10 (Originally published in 1966).

[81] Foreseeability, 10 A.L.R. 3d 619 § 11 (Originally published in 1966).

[82] Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966).

[83] Mastad v. Swedish Brethren, 85 N.W. 913 (Minn. 1901).

[84] 106 SW 2d.

[85] Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966).

[86] Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966).

[87] Shane v. Lowden, 106 S.W.2d 956 (Mo.App. 1937).

[88] Wallace v. Der-Ohanian, 199 Cal.App.2d 141, (Cal.App. 1962).

[89] Quinn v. Smith Co., 57 F.2d 784 (C.A.5, 1932).

[90] Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966).

[91] Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966).

[92] Wallace v. Der-Ohanian, 199 Cal.App.2d 141 (Cal.App. 1962).

[93] Mastad v. Swedish Brethren, 85 N.W. 913 (Minn. 1901).

[94] Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966).

[95] Goldberg v. Housing Authority of City of Newark, 186 A.2d 291 (N.J. 1962).

[96] Helms v Harris, 281 S.W.2d 770 (Tex.Civ.App., 1955); Private person’s duty and liability for failure to protect another against criminal attack by third person, 10 A.L.R. 3d 619 (originally published in 1966); Genovay v. Fox, 143 A.2d 229 (N.J.Super.A.D. 1958); Factors Considered In Determining Utility Of Actor’s Conduct, Restatement 2nd of Torts§ 292 (1965) (current through April 2007).

[97] Factors Considered In Determining Utility Of Actor’s Conduct, Restatement 2nd of Torts§ 292 (1965) (current through April 2007).

[98] Lencioni v. Long, 361 P.2d 455 (Mont., 1961).

[99] Special Relations Giving Rise To Duty To Aid Or Protect, Restatement (Second) of Torts § 314A (1965).

[100] Creteau v. Liberty Travel, Inc., 195 A.D.2d 1012 (N.Y.A.D. 4 Dept. 1993) (stating “A travel agent ordinarily is not an insurer or guarantor of its customers’ safety and, without a specific request, is not obligated to investigate safety factors of lodging accommodations… Nevertheless, where the agent has knowledge of safety factors or where such information is readily available, a travel agent has the duty to inform the customer of those factors”); Wilson v. American Trans Air, 874 F.2d 386, 390-391 (C.A.7 Ind. 1989); Fling v. Hollywood Travel and Tours, 765 F.Supp. 1302, 1305 (N.D.Ohio 1990) aff’d, 933 F.2d 1008; cf., Levin v. Kasmir World Travel, 540 N.Y.S.2d 639 (N.Y.City Civ.Ct. 1989).

[101] Maurer v Cerkvenik-Anderson Travel, 890 P2d 69 (Ariz.App. 1994).

[102] Maurer v Cerkvenik-Anderson Travel, 890 P2d 69 (Ariz.App. 1994).

[103] Loretti v. Holiday Inns, Inc., 1986 U.S. Dist. LEXIS 25871.

[104] Id. at *10.

[105] Loretti v. Holiday Inns, Inc., 1986 U.S. Dist. LEXIS 25871 at *10-11.

[106] Rookard v. Mexicoach, 680 F.2d 1257, (C.A.9 1982).

[107] Id. at 1260; see also Carlisle v Ulysses Line, Ltd., 475 So 2d 248 (Fla.App. 1985) (applying federal maritime law) (carrier had a continuing obligation of care for its passengers and was not simply engaged for point-to-point transportation, it had a duty to warn its passengers of dangers known to exist in the particular place where the passengers were invited, or reasonably could be expected to visit.); Tradewind Transp. Co. v Taylor, 267 F.2d 185 (C.A.9 Hawaii 1959) cert. den., 361 US 829 (where a common carrier had a continuing obligation for the care of its passengers and a duty to warn of dangers known to the carrier in places where the passengers were invited or could reasonably be expected to visit; this duty extended throughout the length of the voyage, and did not cease at each port of call only to resume when the passengers re-embarked.).

[108] Levin v. Kasmir World Travel, 540 N.Y.S.2d 639 (N.Y.City Civ.Ct. 1989).

[109] Id. at 641.

[110] Levin, 540 N.Y.S.2d 639; see also Compagnie Nationale Air France v. Castano, 358 F.2d 203 (C.A.Puerto Rico 1966).

[111] Stevenson v. Four Winds Travel, Inc., 462 F.2d 899, 906 (C.A.5 1972).

[112] Stevenson, 462 F.2d 899.

[113] Id at 907.

[114] Id.

[115] Semmelroth v. American Airlines, 448 F.Supp. 730, 732-33 (E.D.Ill. 1978).

[116] Id.

[117] Duty To Act For Protection Of Others, Restatement (Second) of Torts § 314A (1965) (current through April 2007) (stating “The Institute expresses no opinion as to whether there may not be other relations which impose a similar duty.”).

[118] See Id.

[119] Found at http:// travel.state.gov/travel/cis_pa_tw/cis/cis_1765.html (last visited June 2007).

[120] Harmon v. Sullivan Univ. Sys., Inc., 2005 WL 1353752 at *3-6 (W.D.Ky., 2005) (holding that a claim was stated with respect to fraud and negligent misrepresentation of the accreditation of the university); Gomes v. Univ. of Me. Sys., 365 F. Supp. 2d 6, 47-48 (D. Me. 2005) (discussing a failed claim relating to a disciplinary hearing); Shelton v. Trs. of Columbia Univ., 2005 WL 2898237 at *5 (S.D.N.Y. 2005) (discussing a failed claim relating to a plagiarism hearing).

[121] Conditions Under Which Misrepresentation Is Fraudulent (Scienter), Restatement (Second) of Torts § 526 (1977).

[122] Bird v. Lewis & Clark College, 303 F.3d 1015 (9th Cir. 2002).

[123] Id. at 1023.

[124] Id. (stating “What makes a relationship special is not its name, but the roles assumed by the parties.”).

[125] See for example: Crocker v. Barr, 409 S.E.2d 368, 370 (S.C. 1991); Furek v. University of Delaware, 594 A.2d 506, 513 (Del. 1991); Buteas v. Raritan Lodge, 591 A.2d 623, 625 (N.J.Super.A.D. 1991); Tanner v. Columbus Lodge, 337 N.E.2d 625, 627 (Ohio 1975); Cox v. Thee Evergreen Church, 836 S.W.2d 167, 173 (Tex. 1992).

[126] Roberts v. Craig, 268 P.2d 500, 507 (Cal.App.1.Dist. 1954) (stating “The doctrine of imputed negligence is indulged in to protect third persons from loss caused by the joint enterprise.  Liability is imposed on all members engaged in a joint enterprise when the action is brought by a third person because the courts have felt that in such a case fairness requires that the joint enterprise should bear the damages caused by the negligence of any member of the enterprise.”).

[127] Work Dangerous In Absence Of Special Precautions, Restatement (Second) of Torts § 416 (1965).

[128] Master; Servant; Independent Contractor, Restatement (Second) of Agency § 2(3) (1958).

[129] Chainani v. Bd. of Educ. of N.Y., 663 N.E.2d 283, 287 (N.Y. 1995) (where court said “This State has long recognized an exception from the general rule [of non-liability for the acts of an independent contractor] where, generically, the activity involved is ‘dangerous in spite of all reasonable care.’ … This exception applies when it appears both that ‘the work involves a risk of harm inherent in the nature of the work itself [and] that the employer recognizes, or should recognize, that risk in advance of the contract.’”).

[130] Many courts that have considered the “inherently dangerous activity” exception have chosen not to apply it.  However, several recent cases have applied the exception: McMillian v. United States, 112 F.3d 1040, 1047 (9th Cir. 1997) (activity of felling all of the trees in a right-of-way corridor held inherently dangerous); Maldonado v. Gateway Hotel Holdings, L.L.C., 154 S.W.3d 303, 310 (E.D.Mo. 2003) (boxing match held an inherently dangerous activity, leaving a hotel liable for the negligence of an independent contractor who failed to provide post-fight medical care); Hatch v. V.P. Fair Found., Inc., 990 S.W.2d 126, 135-36 (Mo.Ct.App. 1999) (bungee jumping held inherently dangerous activity); Beckman v. Butte-Silver Bow County, 1 P.3d 348 (Mont. 2000) (trenching held an inherently dangerous activity because the risks of death or serious bodily injury are well recognized and special precautions are required to prevent a cave-in that could bury a worker); Enriquez v. Cochran, 967 P.2d 1136, 1162 (N.M.Ct.App. 1998) (felling dead trees held an inherently dangerous activity); Pusey v. Bator, 762 N.E.2d 968, 975 (Ohio 2002) (when employer hired independent contractor to provide armed security guards to protect property, the “inherently dangerous work” exception was triggered, and if someone was injured by the weapon as result of a guard’s negligence, the employer is vicariously liable even though the guard was an employee of the independent contractor).

[131] Describes activities posing a risk of serious harm which cannot be eliminated by the exercise of the utmost care;  See Contrast with abnormally-dangerous-activity test, 57A Am. Jur. 2d Negligence § 387; note that the Restatement of Torts 2d has substituted this phrase in place of “ultrahazardous”; See Saiz v. Belen School Dist., 827 P.2d 102 (1992).

[132] McMillian v. United States, 112 F.3d 1040, 1047 (9th Cir. 1997).

[133] Id.

[134] Measles cases linked to Romania trip, 12/22/06 Balt. Sun 4A, 2006 WLNR 22376080.

[135] Gammill v. U.S., 727 F.2d 950 (10th Cir. 1984).

[136] Jackson v. Tedd-Lait Post No. 75, American Legion, 723 A.2d 1220 (Me. 1999).

[137] Jackson v. City of Joliet, 715 F.2d 1200 (7th Cir. 1983).

[138] Special Relations Giving Rise To Duty To Aid Or Protect, Restatement (Second) of Torts § 314A (1965).

[139] McNeil v. Wagner Coll., 667 N.Y.S.2d 397 (App. Div. 1998).

[140] Id. at 398.

[141] Construction and application of “good samaritan” statutes, 68 A.L.R.4th 294 (Originally published in 1989).

[142] Dahl v. Turner, 458 P.2d 816 (Ct. App. 1969).

[143] Construction and application of “good samaritan” statutes, 68 A.L.R.4th 294 (Originally published in 1989).

[144] Deal v. Kearney, 851 P.2d 1353 (Alaska 1993).

[145] Liability of Church or Religious Organization for Negligent Hiring, Retention, or Supervision of Priest, Minister, or Other Clergy Based on Sexual Misconduct, 101 A.L.R.5th 1 (Originally published in 2002).

[146]Liability of employer generally for negligence in hiring or keeping employee known, or who should have been known, to be incompetent, 6 Am. Jur. 2d, Assault and Battery § 134.

[147] Ira C. Lupu & Robert W. Tuttle, Sexual Misconduct and Ecclesiastical Immunity, 2004 BYU L. Rev. 1789, 1792 (stating “The legal fallout from the scandal of the Catholic Church may be even more widespread and enduring than the religious consequences. Priests have gone to prison for lengthy terms. Many courts have upheld tort claims against dioceses and their officers, and First Amendment defenses once thought likely to insulate defendants against such claims have been aggressively advanced and explicitly rejected…” continuing at 1797-98, “At the beginning of the twentieth century, a person sexually molested by someone acting on behalf of a religious organization would not have contemplated legal action against the religious organization and would not have been successful in such an action had she tried. By the beginning of the twenty-first century, however, a person who had suffered such an injury might well be a successful plaintiff in a suit against the wrongdoer, the ecclesiastical officials, and the religious entity in which the individual defendants served.”).

[148] 27 Am. Jur. 2d, Employment Relationship § 473.

[149] Ponticas v. K.M.S. Investments, 331 N.W.2d 907 (Minn 1983); Read v. Scott Fetzer Co., 990 S.W.2d 732 (Tex 1998); Southeast Apartments Management, Inc. v. Jackman, 513 S.E.2d 395 (Va. 1999).

[150] Negligent Hiring, 27 Am. Jur. 2d, Employment Relationship § 392.

[151] Principle Negligent Or Reckless, Restatement (Second) of Agency § 213, Comment d (1958).

[152] Evan F. v. Hughson United Methodist Church, 8 Cal App 4th 828 (Cal.App. 3 Dist. 1992).

[153] Janssen v. American Hawaii Cruises, Inc., 731 P.2d 163 (Hawaii 1987) (risk of sexual assault was not foreseeable, based upon role employee was hired to fill); Ponticas v. K.M.S. Investments, 331 N.W.2d 907 (Minn. 1983) (because employee would  hold a passkey to 198 apartments was reason to do more thorough investigation into his fitness); Di Cosala v. Kay, 450 A.2d 508, 518 (Ga. App. 1982) (stating “employer, knowing of its employee’s unfitness, incompetence or dangerous attributes when it hired or retained its employee, should have reasonably foreseen the likelihood that the employee through his employment would come into contact with members of the public, such as the plaintiff, under circumstances that would create a risk of danger to such persons because of the employee’s qualities.”); Welsh Mfg., Div. of Textron, Inc. v. Pinkerton’s, Inc, 474 A.2d 436, 440 (R.I. 1984) (stating “The greater the risk of harm, the higher the degree of care necessary to constitute ordinary care.”).

[154] Negligent Hiring and Retention of An Employee, 29 Am. Jur. Trials 267 (May 2007) (stating “Although no individual case has stated exactly what connection is required between the employment relationship at issue and the plaintiff before a duty will be imposed on an employer, it has been suggested that there are three requirements concerning the plaintiff and the employment relationship which must be satisfied before the law will impose a duty upon the employer to use due care in hiring and retaining employees on its behalf.  These requirements are that (1) the incompetent employee and plaintiff are in places where each have a right to be at the time that the plaintiff sustains injury; (2) the incompetent employee and the plaintiff came into contact as a direct result of the employment; and (3) the employer has received or would have received some benefit, either direct, indirect or potential, from the meeting of the employee and the plaintiff,” quoting The Responsibility of Employers for the Actions of Their Employees: The Negligent Hiring Theory of Liability, 53 Chi-Kent LR 717 (1977)).

[155] Negligent Hiring and Retention of An Employee, 29 Am. Jurisdiction. Trials 267 § 6 Duty Owed Plaintiff by Employer (updated May 2007); Donald K. Armstrong, Negligent Hiring and Negligent Entrustment: The Case Against Exclusion, 52 Or. L. Rev. 296, 298 (1973).

[156] Similar to types of relationships described in Negligent Hiring and Retention of An Employee, 29 Am. Jur. Trials 267 (May 2007) (where the successful negligent hiring case examples include employees of a landlord committing a wrong against a tenant or other person legally upon the landlord’s premises, an employee violates a customer or business invitee of the employer, or situations where the injured plaintiff is a fellow employee of the incompetent employee.)

[157] Liability of Church or Religious Organization for Negligent Hiring, Retention, or Supervision of Priest, Minister, or Other Clergy Based on Sexual Misconduct, 101 A.L.R.5th 1 (Originally published in 2002).

[158] Cause of Action for Injury or Death Resulting From Negligent Hiring, 25 Causes of Action 2d 99 (2006); see, e.g. C.C. v. Roadrunner Trucking, Inc., 823 F. Supp. 913 (D. Utah 1993); Detrick v. Midwest Pipe & Steel, Inc., 598 N.E.2d 1074 (Ind. Ct. App. 3d Dist. 1992); Narney v. Daniels, 115 N.M. 41, 846 P.2d 347 (Ct. App. 1992).

[159] Odenthal v. Minnesota Conference of Seventh-Day Adventists, 657 N.W.2d 569 (Minn. Ct. App. 2003).

[160] Joyner v. B & P Pest Control, Inc., 853 So. 2d 991 (Ala. Civ. App. 2002).

[161] Carney v. Roberts Inv. Co., Inc., 837 S.W.2d 206 (Tex. App. 1992), writ denied, (Nov. 11, 1992).

[162] Knicrumah v. Albany City School Dist., 241 F.Supp. 2d 199 (N.D. N.Y. 2003).

[163] Foster v. Loft, Inc., 526 N.E.2d 1309 (Mass. App. Ct. 1988).

[164] Smith v. Orkin Exterminating Co., Inc., 540 So. 2d 363 (La. Ct. App. 1st Cir. 1989).

[165] Cutter v. Town of Farmington, 498 A.2d 316 (N.H. 1985) (court declared breach of duty by the town when new police officers were not given training in use of handcuffs, and improperly applied them, causing permanent nerve damage to plaintiff.).

[166] Through the doctrine of respondeat superior, discussed in section 7.1.

[167] Fernquist v. San Francisco Presbytery, 313 P.2d 192 (Cal.App. 1957).

[168] Id. at 195.

[169] Negligent Hiring and Retention of An Employee, 29 Am. Jur. Trials 267 (May 2007) (stating “The tort of negligent hiring is distinct from tort liability predicated upon the doctrine of respondeat superior in that the two theories differ in focus; under the latter, an employer is vicariously liable for an employee’s acts committed within the scope of employment, whereas the tort of negligent hiring is a doctrine of primary liability, and employer is principally liable for placing an unfit individual in an employment situation that involves an unreasonable risk of harm to others,” in reference to Interim Personnel of Central Virginia, Inc. v. Messer, 559 S.E.2d 704 (Va. 2002)).

[170] Predator in the Primary: Applying the Tort of Negligent Hiring to Volunteers in Religious Organizations, 2006 BYU L. REV. 569.

[171] Morgan Fife, Predator in the Primary: Applying the Tort of Negligent Hiring to Volunteers in Religious Organizations, 2006 BYU L. REV. 569, 570; James S. Barber, Workplace Violence: An Overview of Evolving Employer Liability, 83 Ill. B.J. 462, 462-63 (1995).

[172] Jones v. Trane 591 NYS2d 927 (N.Y.Sup. 1992).

[173] Id. at 932-33.

[174] Gil B. Fried, Illegal Moves Off-the-Field University Liability for Illegal Acts of Student-Athletes, 7 Seton Hall J. Sport L. 69 (1997) (stating “Once convicted of a crime, especially sexual abuse or related crimes, the prospect of repeat offenses is substantial.”).

[175] Describes activities posing a risk of serious harm which cannot be eliminated by the exercise of the utmost care; See Contrast with abnormally-dangerous-activity test, 57A Am. Jur. 2d Negligence § 387; Note that the Restatement of Torts 2d has substituted this phrase in place of “ultrahazardous”; See Saiz v. Belen School Dist., 827 P.2d 102 (N.M. 1992).

[176] See Id.

[177] Joyner v. B & P Pest Control, Inc., 853 So. 2d 991, 999 (Ala. Civ. App. 2002) (stating “[I]ncompetency is connected conjunctively with carelessness, indifference, heedlessness and recklessness.”).

[178] Enserch Corp. v. Parker, 794 S.W.2d 2, 6 (Tex. 1990); Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex. 1985).

[179] Baptist Mem’l Hosp. Sys. v. Sampson, 969 S.W.2d 945, 948 (Tex. 1998).

[180] Marble Falls Hous. Auth. v. McKinley, 474 S.W.2d 292, 293 (Tex.Civ.App. 1971) (rehearing denied Dec. 1971).

[181] Restatement (Second) of Agency § 267 (1958); Baptist Mem’l Hosp. Sys. v. Sampson, 969 S.W.2d 945, 947 (Tex. 1998) (stating “Liability may be imposed in this manner under the doctrine of ostensible agency in circumstances when the principal’s conduct should equitably prevent it from denying the existence of an agency.”).

[182] Vincent R. Johnson, Americans Abroad: International Educational Programs and Tort Liability, 32 J.C. & U.L. 309 (2006).

[183] Negligence As To Danger Inherent In The Work, Restatement (Second) of Torts § 427 (1965) (current through April 2007) (stating “One who employs an independent contractor to do work involving a special danger to others which the employer knows or has reason to know to be inherent in or normal to the work, or which he contemplates or has reason to contemplate when making the contract, is subject to liability for physical harm caused to such others by the contractor’s failure to take reasonable precautions against such danger.”); Hatch v. V.P. Fair Found., Inc., 990 S.W.2d 126, 134 (Mo.Ct.App. 1999) (quoting 41 Am. Jur. 2d Independent Contractors § 41 (updated May 2007) (stating “The theory upon which this liability is based is that a person who engages a contractor to do work of an inherently dangerous character remains subject to an absolute, nondelegable duty to see that it is performed with that degree of care which is appropriate to the circumstances, or in other words, to see that all reasonable precautions shall be taken during its performance, to the end that third persons may be effectually protected against injury.”).

[184] Americans Abroad: International Educational Programs and Tort Liability, 32 J.C. & U.L. 309, 335 (2006);

[185] Foster v. Roman Catholic Diocese of Vt., 70 A.2d 230 (Vt. 1950).

[186] Id at 235.

[187] Id.

[188] Foster, 70 A.2d at 234.

[189] Id.

[190] Foster, 70 A.2d 233.

[191] Foster, 70 A.2d at 235.

[192] Sullivan v. First Presbyterian Church, Waterloo, 152 N.W.2d 628 (Iowa 1967); Fernquist, 313 P.2d 192.

[193] Sullivan, 152 N.W.2d 628.

[194] Fernquist, 313 P.2d 192; Note that the “invitee” standard is most applicable to this discussion.  If the entering party is a “licensee,” meaning they are the one receiving the sole benefit from entering the property, the standard is different.  To show the owner’s liability there, “wanton and willful” misconduct must be present.  Garnier v. St. Andrew Presbyterian Church, 446 S.W.2d 607 (Mo. 1969).  Of course, if the injured individual were a trespasser, the standard of safety would be lower.  The invitee standard is the highest.

[195] Sullivan, 152 N.W.2d 628.

[196] Garnier, 446 S.W.2d 607.

[197] Fernquist, 313 P.2d at 193.

[198] Id.

[199] Fernquist, 313 P.2d 192.

[200] Coates v. W.W. Babcock Company, 560 N.E. 2d 1099 (Ill.App. 1 Dist. 1990).

[201] Id.

[202] Haugen v. Central Lutheran Church, 361 P.2d 637 (Wash. 1961).

[203] Geiger v. Simpson Methodist-Episcopal Church of Minneapolis, 219 N.W. 463, 464-66 (Minn. 1928).

[204] Id.

[205] When Master Is Liable For Torts Of His Servants, Restatement (Second) of Agency § 219 (1958) (stating that masters are not liable for the tort of a servant if that servant was “acting outside of the scope of employment unless the master (a) intended the conduct or the consequences, or (b) the master was negligent or reckless….”); Garnier, 446 S.W.2d 607 (Rule that nongovernmental charitable institution is liable for its own negligence and for negligence of its agents and employees acting within scope of employment is applicable to churches).

[206] Liability of charitable organization under respondeat superior doctrine for tort of unpaid volunteer, 82 A.L.R.3d 1213 (Originally published in 1978); Person Serving Gratuitously, Restatement (Second) of Agency § 225 (1958) (stating “One who volunteers services without an agreement for or expectation of reward may be a servant of the one accepting such services.”) (illustration given: “A, a social guest at P’s house, not skilled in repairing, volunteers to assist P in the repair of P’s house. During the execution of such repair, A negligently drops a board upon a person passing upon the street. A may be found to be a servant of P.”).

[207] Fernquist, 313 P.2d at 196 (stating “These [volunteers] were acting as agents of the defendant even though their services were performed gratuitously and both their knowledge and negligence can be imputed to their principal.”).

[208] Person Serving Gratuitously, Restatement (Second) of Agency § 225 (1958).

[209] Liability of charitable organization under respondeat superior doctrine for tort of unpaid volunteer, 82 A.L.R.3d 1213 (Originally published in 1978).

[210] Id.

[211] Timmons v. Assembly of God Church of Van Nuys, 40 Cal.App.3d 31, 34 (Cal.App.2.Dist. 1974).

[212] Id.

[213] Decedent-spouse as provider of household services, 1 Stein on Personal Injury Damages Treatise § 3:36 (3rd Edition); Terveer v. Baschnagel, 445 N.E.2d 264 (Ohio.App. 1982) (parents of 22-year-old dental hygienist were entitled to recover for loss of her services in helping with rental properties, cutting her brothers’ hair, and cleaning her family’s teeth); Gilbert v. Root, 294 N.W.2d 431 (S.D. 1980).

[214] Child’s Wrongful Death; 1 Stein on Personal Injury Damages Treatise § 3:37 (3rd Edition); U.S. D’Ambra v. United States, 481 F.2d 14 (C.A.1 1973), cert. den., 414 U.S. 1075 (FTCA where state wrongful death act is inapplicable because partly punitive); Tucson v. Wondergem, 466 P.2d 383 (Ariz. 1970) (Widow, hospitalized from an emotional condition which required psychiatric treatment as result of death of husband who drowned when his automobile was washed into arroyo by flood, was entitled to recover for anguish, sorrow, mental suffering, pain and shock); Krouse v. Graham, 562 P.2d 1022 (Cal. 1977) (husband allowed to recover “reasonable compensation for loss of wife’s love, companionship, comfort, affection, society, solace or moral support, any loss of enjoyment of sexual relations, or any loss of physical assistance in the operation or maintenance of the home,” despite contention that such items were not “pecuniary.”).

[215] Decedent-spouse as provider of household services, 1 Stein on Personal Injury Damages Treatise § 3:36 (3rd Edition); Wilson v. Lund, 491 P.2d 1287 (Wash. 1971) (In enacting 1967 amendment providing that damages may be recovered for loss of love and companionship of and for injury to or destruction of parent-child relationship, the legislature authorized recovery of damages for parental mental anguish in cases involving wrongful death of or injury to a child.).

[216] Sanchez v. Schindler, 651 S.W.2d 249 (Tex. 1983), reh’g of cause overruled, (June 15, 1983) (rejecting pecuniary loss rule in actions for death of minor child).

[217] Loss of companionship and the like—Loss of consortium, 22A Am. Jur. 2d Death § 223 (April 2007).

[218] Hitaffer v. Argonne Co., 183 F.2d 811 (D.C. Cir. 1950), cert. den., 340 U.S. 852, partially overruled on other grounds by Smither & Co. v. Coles, 242 F.2d 220, 221 (D.C.Cir. 1957); Loss of companionship and the like—Loss of consortium, 22A Am. Jur. 2d Death § 223 (April 2007).

[219] Maureen Ann Delaney, What About the Children?  Towards an Expansion of Loss of Consortium Recovery in the District of Columbia, 41 Am. U. L. Rev. 107 at 114 (Fall, 1991); Loss of companionship and the like—Loss of consortium, 22A Am. Jur. 2d Death § 223 (April 2007).

[220] States include Alaska, Massachusetts, Michigan, Texas, Vermont, Washington, West Virginia, and Wisconsin.

[221] Hibpshman v. Prudhoe Bay Supply, Inc., 734 P.2d 991, 997 (Alaska 1987) (allowing four minor children an independent cause of action for loss of parental consortium as result of on-the-job injuries suffered by their father); Ferriter v. Daniel O’Connell’s Sons, Inc., 413 N.E.2d 690, 696 (Mass. 1980) (allowing children to recover for loss of consortium for father’s negligent injury if child can demonstrate dependence on parent) superseded by statute on other grounds as stated in Lijoi v. Mass. Bay Transp. Auth., 548 N.E.2d 893 (Mass.App.Ct. 1990); Berger v. Weber, 303 N.W.2d 424, 427 (Mich. 1981) (allowing minor daughter to receive damages for loss of society, companionship, love, and affection when mother was permanently injured in automobile collision); Reagan v. Vaughn, 804 S.W.2d 463, 465-66 (Tex. 1990) (allowing minor child to recover against bar management for loss of parental consortium); Hay v. Medical Center Hosp., 496 A.2d 939, 946 (Vt. 1985) (allowing minor child to recover for loss of parental consortium when mother became permanently comatose); Ueland v. Reynolds Metals Co., 691 P.2d 190, 195 (Wash. 1984) (allowing two minor children to recover for loss of love, care, companionship, and guidance when father suffered permanent mental and physical disabilities); Belcher v. Goins, 400 S.E.2d 830, 841 (W. Va. 1990) (indicating that minor children or handicapped children of any age that are dependent on their natural or adoptive parents be allowed to succeed in an action for loss of parental consortium); Theama v. City of Kenosha, 344 N.W.2d 513, 522 (Wis. 1984) (allowing minor children to recover for loss of parental consortium where father suffered severe injuries to head and internal organs in a motorcycle accident).

[222] Ferriter v. Daniel O’Conner’s Sons, Inc., 413 N.E.2d 690, 692 (Mass. 1980) (stating that “a minor child has a strong interest in his parent’s society, an interest closely analogous to that of the wife…”) superseded by statute on other grounds as stated in Lijoi v. Mass. Bay Transp. Auth., 548 N.E.2d 893 (Mass.App.Ct. 1990).

[223] Ueland v. Reynolds Metals Co. 691 P.2d 190 (Wash. 1984).

[224] Id.

[225] Suzanne Craig Robertson, Dangerous Liaisons, 42-JAN Tenn. B.J. 16 (January, 2006).

[226] Assumption of Risk, Elements, 65 C.J.S. Negligence § 369 (updated June 2007).

[227] Assumption of Risk, Elements, 65 C.J.S. Negligence § 369 (updated June 2007) (stating “Elements of assumption of the risk that must be shown by the defendant include that the plaintiff had knowledge of the facts constituting a dangerous condition, the plaintiff knew the condition was dangerous, the plaintiff appreciated the nature and extent of the danger, and the plaintiff voluntarily exposes himself or herself to the danger.”).

[228] Timmons v. Assembly of God Church of Van Nuys, 40 Cal.App.3d 31 (Cal.App.2.Dist. 1974).

[229] Davenport v. Cotton Hope Plantation Horizontal Property Regime, 508 S.E.2d 565 (S.C. 1998); Timmons, 40 Cal.App.3d 31.

[230] Bennett v. Gitzen, 484 P.2d 811, 813 (Colo.App. 1971).

[231] Okianer Christian Dark, Tort Liability and the “Unquiet Mind”: A Proposal to Incorporate Mental Disabilities Into the Standard of Care, 30 T. Marshall L. Rev. 169, 174 (stating “Courts have consistently recognized the inherent unfairness of asking children to act like adults when in fact they are not.”).

[232] Bennett, 484 P.2d at 813.

[233] Jarrett v. Woodward Bros., Inc., 751 A.2d 972 (D.C. 2000).

[234] Id.

[235] Id.

[236] Note that there are more than two alternatives – some states have a hybrid form – but these are the main categories; Modern development of comparative negligence doctrine having applicability to negligence actions generally, 78 A.L.R.3d 339 (Originally published in 1977).

[237] Modern development of comparative negligence doctrine having applicability to negligence actions generally, 78 A.L.R.3d 339 (Originally published in 1977).

[238] Legal Effect of Plaintiff’s Fault, 65 C.J.S. Negligence § 262 (June 2007); Litchford v. Hancock, 352 S.E.2d 335 (Va. 1987).

[239] Injured Person’s Fault, 65 C.J.S. Negligence § 227 (updated June 2007).

[240] Rosendahl v. Lesourd Methodist Church, 412 P.2d 109 (Wash. 1966).

[241] Injured Person’s Fault, 65 C.J.S. Negligence § 227 (updated June 2007).

[242] Modern development of comparative negligence doctrine having applicability to negligence actions generally, 78 A.L.R.3d 339 (Originally published in 1977).

[243] Aguallo v. City of Scottsbluff, 678 N.W.2d 82 (Neb. 2004).

[244] L & K Holding Corp. v Tropical Aquarium, 192 A.D.2d 643 (N.Y.A.D. 1993); Davis ex rel. Davis v. Government Employees Ins. Co., 775 A.2d 871 (Pa. Super. Ct., 2001).

[245] Schutkowski v Carey, 725 P.2d 1057 (Wyo. 1986).

[246] Paralift, Inc. v Superior Court, 23 Cal App 4th 748 (Cal.App.4.Dist. 1983).

[247] Avoiding the Effect of a Recreational Activity Liability Release, 33 Am. Jur. Proof of Facts 3d 421 (January 2007).

[248] Id.

[249] Even though releases resemble contracts, “lack of consideration” would not void the contract on a mission trip release, rather the mere privilege of participation would likely be considered sufficient; See for example, Grbac v Reading Fair Co. (W.D. Pa. 1981) 521 F.Supp 1351, affd., 688 F.2d 215 (auto-racing accident).

[250] Grbac v Reading Fair Co. (W.D. Pa. 1981) 521 F.Supp. 1351, affd., 688 F.2d 215 (auto-racing accident).

[251] Voidableness of Release, 8 Am Jur. Proof of Facts 2d 617 (July 2006).

[252] “Void” sometimes means that no return of consideration is required in avoiding the release; see Bonacci v. Massachusetts Bonding & Ins. Co., 137 P.2d 487 (Cal.App. 1 Dist. 1943), State ex rel. Order of United Commercial Travelers of America v. Shain, 98 S.W.2d 597 (Mo. 1936);  Picklesimer v. Baltimore & O.R. Co., 84 N.E.2d 214 (Ohio 1949).

[253] Factors Rendering a Release Voidable, 8 Am Jur. Proof of Facts 2d 617 § 2 (July 2006).

[254] Franco v. Neglia, 776 N.Y.S.2d 690 (N.Y.Sup.App.Term 2004).

[255] Voidableness of Release, 8 Am Jur. Proof of Facts 2d 617 § 1 (July 2006).

[256] Id.

[257] Hojnowski ex rel. Hojnowski v. Vans Skate Park, 868 A.2d 1087 (N.J.App.Div. 2005), cert. granted, 878 A.2d 853.

[258] Hawkins ex rel. Hawkins v. Peart, 37 P.3d 1062 (Utah 2001).

[259] Gillespie v Papale, 541 F.Supp 1042, 1046 (DC Mass 1982) (stating that “[I]n no event may a person be relieved of liability for willful and wanton negligence”); Falkner v Hinckley Parachute Center, Inc., 533 N.E.2d 941, 946 (2d Dist 1989); Simmons v American Motorcyclist Ass’n, 69 Ohio App 3d 844, 846 (Allen Co. 1990); Gross v Sweet, 400 N.E.2d 306, 308 (N.Y. 1979).

[260] “Voidable” sometimes means that a return of consideration is required in avoiding the release; see Bonacci v. Massachusetts Bonding & Ins. Co., 137 P.2d 487 (Cal.App. 1 Dist. 1943); Trokey v. U.S. Cartridge Co., App., 222 S.W.2d 496 (Mo.App. 1949);  Frehe v. Schildwachter, 45 N.E.2d 427 (N.Y. 1942); Haller v. Borror Corp., 552 N.E.2d 207 (Ohio 1990), reh. den., 555 N.E.2d 322.

[261] Ryan v Industrial Comm’n, 623 P.2d 37 (Ariz. 1981) (aviation accident); Simkin v Heil Valley Ranch, Inc., 765 P.2d 582 (Colo.App. 1988), revd on other grounds;  784 P.2d 781 (Colo., 1989) (horseback riding accident); Zimmer v Mitchell & Ness, 385 A.2d 437 (Pa.Super. 1978), affd., 416 A2d 1010 (snow skiing accident).

[262] Prosser and Keeton on the Law of Torts (5th ed.) § 49.

[263] La Frenz v Lake County Fair Board, 360 N.E.2d 605 (Ind.App. 1977) (auto-racing accident).

[264] Coughlin v T.M.H. Int’l Attractions, 895 F.Supp. 159 (W.D.Ky. 1995).

[265] Eelbode v. Chec Medical Centers, Inc., 984 P.2d 436 (Wash. Ct. App. Div. 2 1999).

[266] Young v Gadsden, 482 So 2d 1158 (Ala. 1985) (overruled in part on other grounds by Barnes v Birmingham Int’l Raceway, 551 So 2d 929 (Ala. 1989) (go cart racing accident).

[267] McCorkle v Hall, 782 P.2d 574 (Wash.App. 1989), review den., 790 P.2d 168 (health club accident).

[268] Hewitt v Miller, 521 P.2d 244 (Wash.App. 1974), review den 84 Wash.2d 1007 (scuba diving accident); Baker v Seattle, 484 P.2d 405 (Wash., 1971) (golf cart accident).

[269] Provence v Doolin 414 N.E.2d 786 (Ill.App. 1980) (auto-racing accident); Moore v Sitzmark Corp., 555 N.E.2d 1305 (Ind.App. 1990) (snow skiing accident).

[270] Atkins v. Swimwest Family Fitness Center, 691 N.W.2d 334 (Wis. 2005).

[271] Mettler ex rel. Burnett v. Nellis, 695 N.W.2d 861 (Wis.App. 2005).

[272] Vaughn v Didizian, 648 A2d 38 (Pa Super Ct. 1994); Hammer v Road America, Inc., 614 F Supp 467 (E.D.Wis. 1985), affd. without op., 793 F2d 1296; Haines v St. Charles Speedway, Inc., 689 F.Supp 964 (E.D.Mo. 1988) affd., 874 F.2d 572; Murphy v North Am. River Runners, 412 S.E.2d 504 (W.Va. 1991); In re Waikiki Hobron Associates, Bkrtcy.Hawaii, 51 B.R. 406; Carona v. Illinois Cent. Gulf R. Co., 561 N.E.2d 239 (Ill.App. 5 Dist. 1990) appeal denied 567 N.E.2d 329; Harris v. Lapeer Public School System, 318 N.W.2d 621 (Mich.App. 1982); Goncalvez for Goncalvez v. Patuto, 458 A.2d 146 (N.J.Super.A.D. 1983); Sparler v. Fireman’s Ins. Co. of Newark, New Jersey, 521 A.2d 433 (Pa.Super. 1987) appeal den., 540 A.2d 535; Arnold v. Shawano County Agr. Soc., App., 317 N.W.2d 161 (Wis.App. 1982) affd., 330 N.W.2d 773.

[273] Neely v. Club Med Mgmt. Servs., Inc., 63 F.3d 166, 185 (3d Cir. 1995) (stating that “[P]arties may generally consent to application of American law to govern their relations, as evidenced by a choice of law clause.”); National Ass’n of Sporting Goods Wholesalers, Inc. v. F.T.L. Marketing, 779 F.2d 1281, 1285 (C.A.7 (Ill.) 1985) (stating “[U]nless the court’s subject-matter jurisdiction is affected, parties may generally stipulate to the substantive law to be applied.”).

[274] Americans Abroad: International Educational Programs and Tort Liability, 32 J.C. & U.L. 309, 319 (2006); The Issue Involved, Restatement (Second) of Conflicts § 145 cmt. d (1971).

[275] Mary Ann Connell & Frederick G. Savage, Releases: Is There Still a Place for Their Use by Colleges and Universities?, 29 J.C. & U.L. 579, 617 (2003).

[276] White v Rhodes, 607 N.E.2d 75 (Ohio App. 2 Dist. 1992), motion overruling 598 N.E.2d 1171.

[277] Gillespie v Papale, 541 F Supp 1042 (D.C.Mass. 1982); Barker v Colorado Region – Sports Car Club, Inc, 532 P.2d 372 (Colo.App. 1974); Bowen v Kil-Kare, Inc., 585 N.E.2d 384 (Ohio 1992) reh. den., 589 N.E.2d 46; Arnold v Shawano County Agricultural Soc., 317 N.W.2d 161 (Wis.App. 1982) affd, 330 N.W.2d 773.

[278] Hardy v. St. Clair, 739 A.2d 368, 371 (Me.1999).

[279] White v Rhodes, 607 N.E.2d 75 (Ohio App. 2 Dist. 1992), motion overruling 598 N.E.2d 1171.

[280] See for example Brotherhood Mutual Insurance’s policy entitled “Foreign Travel & Mission Trip Insurance” described at http://www.brotherhoodmutual.com/insPrograms/passportToMinistry/default.htm (last visited June 2007).

[281] Proverbs 1; Psalms 1

[282] Matthew 25:14-28

[283] Matthew 10:16b

Legal & Governance Issues of Grant-Seeking Friday, Feb 4 2011 

By Michelle A. Adams

As appears in: High, William F., ed. Grants for Christian Ministries and More. Xulon Press, 2010.

Overview.  As charitable organizations begin applying for grants, there are several legal aspects to consider.  The first logical question that arises concerns the proper legal formation of the grant-seeking organization.  A second consideration is the importance of good organizational governance in obtaining grants.  Lastly, some key distinctions between seeking private and public grants will be addressed.

Importance of Proper Formation

Many grant applications stipulate that the grantee organization must be “properly formed” and the requesting entity’s constitutional documents reflecting this will be requested.

Tax Exemption.  The vast majority of private and public grantors require that the grant recipients be tax exempt nonprofits.  They will often ask for a copy of the Letter of Determination from the Internal Revenue Service (“IRS”) in demonstration of this.  Such status is important to the grantor for several reasons.  Firstly, the organizations giving the grants are tax exempt entities themselves which necessitates that their dollars be used to further tax exempt purposes.  If the money is not given to an IRS-recognized charity there is a much greater administrative burden to ensure the money is used properly.

Private foundations have strict requirements that minimum distributions be made each year.  One of the simplest ways to fulfill these distribution requirements is to grant money to tax exempt IRC § 501(c)(3) public charities (or private foundations[1]).  If a private foundation grants money to an organization that does not fall into this category, it becomes responsible for administering ongoing “expenditure responsibility,”[2] which means that it must oversee, verify, and document that the money was used for charitable purposes.  This is strictly enforced.[3] If the granting private foundation fails to comply, an excise tax of 20% of the amount given may be required of the giving foundation,[4] as well as 5% from the manager that approved the expenditure.[5] Additionally, thorough reports on such grants must be filed with the IRS.[6] Because it is presumed that grants to § 501(c)(3) organizations will be spent in a tax exempt manner (or there are at least accountability structures in place to effect that end), there is less oversight responsibility for grants to them.

Section 501(c)(3) public charities must maintain “discretion and control” [7] when making grants to organizations that do not have charitable exempt status. Public charities have a fiduciary responsibility over their funds and must assure that they are spent for exempt purposes.[8] Exercising discretion means using reasonable judgment in selecting recipients and projects.  Grants should be limited to specific programming, avoiding distributions to the non-exempt organization’s general fund.  The fund use must be monitored with the grantee providing regular reports on such use and returning any unused funds.[9] The grantor § 501(c)(3) charity may be jeopardizing its own tax exempt status if it does not adhere to these procedures.

Furthermore, an organization that does not have its tax exempt status riding upon its conduct will lack the accountability structure that is in place for exempt organizations.  Since a non-exempt grantee’s status does not pend upon charitable use of funds, such grantee would have less incentive to maintain integrity, aside from any commitments made to the grantor.  The accountability and transparency promoted in § 501(c)(3) organizations by way of the annually required information return (Form 990) and other requirements make exempt organizations more desirable grantees.

Organizational Form.  Tax exempt organizations can take the form of nonprofit corporations, charitable trusts, or more recently, LLCs.  It frequently makes a difference whether a nonprofit is a “charitable” organization or another type of tax exempt organization (there are dozens).  Some government grants are only available to the former.[10] Private foundations are required to distribute only to public charities as described in § 509(a)(1), (2), or (3).

Internal Restrictions.  An organization must make sure that its own governing documents do not prohibit it from seeking and receiving grants from certain kinds of organizations.

International Charities Seeking US Grants.  To improve their chances, international charities seeking US grants are advised to pursue IRS tax exemption recognition.  Private Foundations are often reluctant to make international grants to unrecognized entities as it would normally require them to exercise the aforementioned expenditure responsibility (which may be difficult to administer given the geographical considerations).  Alternately the donor can make what is called an “equivalency determination.”[11] This means that the granting foundation has made a good faith determination that the foreign charity is the equivalent of a US public charity.[12] Either of these options necessitates further actions on the part of the grantor which may bias a decision against the grantee.

Since September 11, 2001 there has been a regulatory push to tighten donations to foreign organizations in an effort to prevent them from ultimately ending up in the wrong hands.[13] Even more recently measures taken towards greater accountability and transparency among charities in general have also resulted in greater scrutiny of international grant-making.

There are two options for foreign charities to obtain recognition by the IRS.  The international charity can apply directly for recognition as a foreign § 501(c)(3) charity, but this approach only carries benefit in the context of organizational grants and not for individual donors.  Since individual donations are often expected and, under this approach, no tax deduction accrues to the donor this option is rarely employed.

The other option is to establish a separate § 501(c)(3) public charity in the United States, allowing it to raise funds then make grants back to the foreign charity.  This requires the extra effort of establishing and managing a separate corporation or other nonprofit entity, but this scenario affords the domestic entity the same advantages as any other US charity – including the ability to offer income tax deductions for its individual donors.

Importance of Good Governance

The Internal Revenue Service believes that “a well-governed charity is more likely to obey the tax laws, safeguard charitable assets, and serve charitable interests than one with poor or lax governance.”[14] Few “best practices” of nonprofit governance are codified in the law – and yet they are considered vitally important to the basic health of an organization.  They will also usually be an area of inquiry by grantors who will want assurance that the funds distributed will be handled in a responsible, effective, and efficient manner.  As is typical, one grant application considered specifically asks for “evidence that you meet or are taking specific steps to meet best practice standards in fiscal accountability and governance.”

In 2007 the IRS published a list of what it considered to be good governance practices.[15] The list has since been removed from the IRS website as the revised Form 990 has incorporated these concepts; the list still provides instructive guidance however on what the IRS and the philanthropic community expect in terms of best practices.  Several of the topics from that list and associated recommendations are discussed below.

Strong Mission Statement.  The first item mentioned in the publication was a “strong mission statement.”  In the context of grant-seeking, an organization’s mission statement needs to be specific, compelling, and feasible.  It serves both to popularize and explain the existence of the organization.  Grantors will be looking for evidence of sound strategic planning and a demonstrated record of success in the organization’s area of focus.  That focus must be in line with the aim of the granting organization.  Every grant seeking organization must also guard against “mission creep” – allowing the focus of the organization to morph by pursuing grants that are available but do not align with its mission.  The governing board should make periodic reviews of the vision and mission statement to stay on track.

Ethics.  The IRS publication advised organizations to develop a written “Code of Ethics” to demonstrate a commitment to legal and ethical integrity.  Included in this code should be a Whistleblower Policy to protect employees that choose to reveal their good faith suspicions of inappropriate or illegal behavior within the organization.  The 2002 Sarbanes-Oxley Act, though created in response to for-profit entities, fueled the trend towards an expectation of whistleblower policies in all types of entities.  In fact, the revised Form 990 for the tax year 2008 now asks nonprofits to reveal whether they have such a policy in place.

While private schools are required to have a racially non-discriminatory policy to be tax exempt, most organizations applying for grants – schools or otherwise – will also be asked to produce a non-discriminatory policy or include a statement affirming that they follow such a practice.  Some applications will specify the type of policy they are looking for, such as the process for hiring employees, selecting clients, and providing services.  The basis upon which the discrimination policy applies, such as race, color, religion, gender, national origin, ancestry, age, medical condition, disability, veteran status, marital status, sexual orientation, or any other characteristic protected by law, may be requested.  Although such a policy is not required by law, the fact that most grant applications request it and the IRS asks about it on the publically viewable Form 990 makes it important that each charity adopt one that is appropriate to them.

Due Diligence.  Another aspect addressed by the earlier guide was that of due diligence on the part of the leadership.  The typical legal standard of care for board members is that they act in good faith with the care that an ordinarily prudent person in a like position would exercise under similar circumstances.  Both the IRS and grantors are interested in seeing that the board has put policies in place to promote due diligence.  Some of the IRS-recommended policies include making sure that each director is familiar with the charity’s activities and knows whether those activities promote the charity’s mission and achieve its goals, that each director is fully informed about the charity’s financial status, and that each has full and accurate information to make informed decisions.  Among others questions that probe levels of communication and involvement, common grant applications inquire about the level of commitment and advocacy on the board, the qualifications of leadership, and the frequency of board meetings.

Duty of Loyalty.  One of the pillars of being a tax-exempt charity is that its directors act in the best interest of the organization, demonstrating what is termed “duty of loyalty.”  Neither board directors nor key employees may benefit from the charity doing business with an entity in which they have an interest.  If someone in the organization stands to benefit from a transaction with the organization, it must be scrutinized carefully.  It must be exposed early on for the rest of the board to vote upon in the absence of the interested director.  The transaction must actually be advantageous to the charity, and not a worse deal than could be obtained on the open market.

The IRS has shown favor towards certain common practices and disfavor towards others.  The increasing importance of independent[16] board members grows clear.  Lois G. Lerner, director of the exempt-organization division of the IRS was quoted, “While the IRS cannot require groups to have a conflict-of-interest policy or independent board members, the lack of those policies could trigger other questions about how a nonprofit organization would prevent abuses and insider dealing.”[17] Boards composed entirely of family members are also disfavored;[18] some states even disallow it.[19] There seems to be a presumption against their impartiality.  Such boards have been perceived as more prone to serve the interests of the family rather than the organization as a whole.

This quest for board independence and accountability is what motivates grantors to ask potential grantees about such things as their policy on length of board terms; they will inquire into the identity of the board members, their employers, areas of expertise, and relations to the staff – professional and familial.

Compensation Practices.  Another facet of good governance is the prohibition against private inurement.[20] The charity does not exist for the benefit of private individuals.  Compensation for employees and directors as well as reimbursement policies are among the factors considered in evaluating policies pertaining to this area.  A charity should always be able to demonstrate how a salary figure was established.  It should document its research into similar positions in the nonprofit and for-profit world to be able to demonstrate that it is reasonable.[21] Soaring salaries for nonprofit executives is no longer being ignored.  The salaries of top employees are publically available on the charity’s Form 990.  Charities should have a reimbursement policy in place, more as a response to misinformation than for prevention of intentional abuse.  IRS rules in this area are more clearly set forth than in many related governance areas but they are largely ignored in many church and charity circles.  Without clear policies and consistent practices in this area both the charity and affected individuals are subject to penal actions on the part of the IRS.

Transparency & Financial Audits.  Grant applications commonly require evidence of financial transparency and accountability.  With the advent of the revised Form 990 beginning in tax year 2008, charities are being pushed to display greater transparency.  This more detailed form can be an opportunity for a charity to showcase its accomplishments, fiscal health, and the strength of its governance policies, somewhat in compensation for the greater effort required to complete it.

Although small charities may not find independent audits financially feasible, organizations seeking larger donations will need to consider them.  The US Treasury recommends such an audit when the charity’s gross income exceeds $250,000 annually.[22] An audit is mandatory for each year that the federal grant exceeds $500,000.[23]

Diverse Support.  Not mentioned in the IRS publication, but an important consideration in grant seeking, is the level of support for the prospective program.  Aside from the need for publically supported charities to meet a required “support test,”[24] regular financial support from diverse sources assures a grantor that the organization has something that others have seen and believe in.  It also indicates that the programming will have enough support to continue after the grant funding has expired.  Commonly grantors desire to see strong constituency support through annual giving and a professional approach to the relationships with major donors.  Contributions personally made by the board as a whole to the organization in each of the last three years is information grantors often require.  An organization may also be asked to describe its collaboration efforts with other organizations.

References from reputable individuals and organizations outside the organization speak volumes as well.  Obtaining a stamp of approval from organizations such as the Evangelical Council for Financial Accountability is a meaningful benchmark in the world of Christian philanthropy.  The governance standards that accompany such recognition require more accountability and transparency than the legal requirements alone or the status quo, and donors are also able to weigh an approved organization’s effectiveness in terms of dollars spent on administration versus actual program work through publically available data.

Other Grant-Associated Legal Obligations

Certain governance practices become requisite when an organization accepts a grant.  This transaction is the equivalent of entering into a contract with the grantor.  An organization can potentially be in breach of contract in the following ways: 1) not using the funds as directed; 2) not reporting back to the grantor of the funds as required; and 3) not returning surplus funds if that is stipulated.

Charities applying for and receiving grants may be required to register in the state where they are applying.  Charitable Solicitation Registration (CRS) laws exist in most states and on some local levels as well.  Some CSR laws specifically include grant-seeking as an activity that triggers the need for registration (before seeking charitable gifts in locations with these laws, a charity must register itself – regardless of whether the gift is ultimately received).[25] Some exclude certain kinds of grant-seeking, such as government grants.[26] Because of the diversity of requirements, it is important to investigate the CSR laws in each location where an organization plans to request funds.  Fines have been imposed when charities have ignored these regulations.[27]

Government Grants

The federal government awards over $350 billion of grant money each year, but this funding does not come without strings.

Bookkeeping.  The grant-seeking organization should be aware that government grants are accompanied by increased paperwork.  This can include certifications, budget reports, and other reporting documentation to prove that the organization’s programs are staying on task in meeting objectives and using designated funds appropriately.  For federal grants financial reporting is done on Standard Form 269.  In the case of a federal grant an audit can be performed at any time, making accurate bookkeeping of vital importance.  As stated earlier, an audit is mandatory for each year that the federal grant exceeds $500,000.

Governance.  Certain governance issues can develop when accepting government funding.  Dependence upon these grants is a real temptation for many charities, resulting in the aforementioned mission creep where the original purpose of the organization changes to chase the available funds.  Government grants often require matching funds, something the charity needs to consider before applying for the grant.  Funding from another government grant will not constitute matching funds in fulfillment of this requirement.  If an organization is considering using part of its funds for political activity, it should seek private rather than government funding and make certain it is properly structured to engage in such activity.[28] By law, federal funds may not be used for lobbying.

In addition to governance and extensive reporting issues, constitutionality is an important consideration when accepting government money.  Specifically, because the Establishment Clause prevents the government from advancing or inhibiting any religion, government funds cannot be used to support religious activities.[29]

In two major cases in recent years the actions of religious organizations in accepting government grants were declared to be unconstitutional.[30]

In the first case Prison Fellowship Ministries (“PFM”) accepted a grant from a local government to carry on a rehabilitation program.  Because there was a religious component to the voluntary rehab program, taxpayers brought suit and won on the basis of the Establishment Clause.  Even though the governmental agency that awarded the grant knew what the program would involve, it was later declared unconstitutional.  The second case involved a federal grant to Notre Dame for the distribution of a training program for teachers.  This training also involved a religious component which encouraged spiritual development in the Catholic faith – something known to the Secretary of Education when the grant was made.  This grant was also found to violate the Establishment Clause.

Although the faith-based organization in neither case was ultimately required to return the funds that were issued prior to the declaration of unconstitutionality, the penultimate court in each case had ordered that the entire grant be repaid – including funds which had long been spent.

The first thing to note from these cases is that simply because a government entity bestows a grant does not ensure that it was constitutionally done.  It is not enough to rely upon the giver of a grant to know the constitutional boundaries; the organization must be proactive in evaluating the situation before accepting the money to avoid a potentially expensive lawsuit and disruption of its plans.  Secondly, although the cited organizations were not forced to return grant money that had already been disseminated, it is not possible to rely on this precedent for future cases; if the Flast v. Cohen case is ever expanded beyond its narrow facts (as the lower courts attempted to do), it could change the results for other faith-based organizations that accept government grants.  Thirdly, it is imperative that faith-based organizations keep very strict and separate accounts when accepting government funds so that in the case of a lawsuit accusing them of spending significant portions for religious purposes, the organization will have a defense.  PFM would have had a better defense if it could show that all funding that supported any religious activities or materials came solely from private sources.  Instead government money was used to fund publications, small religious gifts for prisoners, all phone calls, and postage costs.[31] Employees did not keep a log of religious and nonreligious hours spent, though part of their salary was paid through public funds.   As scrutiny increases upon faith-based organizations, accepting government funding, while not impossible, will call for the highest standards of record-keeping and integrity.

The goal of any grant applicant, private or public, is to stand out among other seekers.  Going above and beyond in terms of the above cited best practices will help accomplish that, and will also serve to push a charity to an even greater level of organizational excellence.

[1] Bruce R. Hopkins, The Law of Tax-Exempt Organizations (9th ed. 2007) p. 383 (“For this purpose, exempt operating foundations (see § 12.1(c)) are regarded the same as public charities.”).

[2] I.R.C. § 4945(d)(4) (2005); Reg. § 53.4945-5(a).

[3] See e.g., Hans S. Mannheimer Charitable Trust v. Commissioner, 93 TC 35 (1989), where the Tax Court found that a taxable expenditure existed even though the proper oversight had, in fact, occurred.  The private foundation failed to document this oversight as required by law, so it did not count.

[4],I.R.C. § 4945(a)(1); Reg. § 53.4945-1(a)(1).

[5] Reg. § 53.4945-1(a)(2).

[6] Reg. § 53.4945-5(d).

[7] Rev. Rul. 68-489, 1968-2 C.B. 210.

[8] D. Greg Goller, Grant problems: Being hurt by good intentions, in The Nonprofit Times (2002).

[9] D. Greg Goller, Grant problems: Being hurt by good intentions, in The Nonprofit Times (2002).

[10] Bruce R. Hopkins, The Law of Tax-Exempt Organizations (9th ed. 2007) p. 55.

[11] Rev. Proc. 92-94, 1992-1 C.B. 507, Reg. § 53.4945-6(c)-(2)(ii), § 53.4942(a)-3(a)(6), and § 53.4945-5(a)(5).

[12] This can be done through reasonable reliance upon a written legal opinion of the equivalence, through analysis of facts contained in an affidavit by the foreign charity leading the foundation to find equivalence, or through reliance on recognition of the foreign entity by the IRS as a 501(c)(3) public charity.

[13] See e.g., the 2005 version of its Voluntary Best Practices for U.S.-Based Charities available at http://www.treas.gov/offices/enforcement/key-issues/protecting/docs/guidelines_charities.pdf.

[14]Internal Revenue Service, Governance and Related Topics, (Feb. 4, 2008), available at http://www.irs.gov/pub/irs-tege/governance_practices.pdf.

[15]Internal Revenue Service, Good Governance Practices For 501(c)(3) Organizations, (Feb. 7, 2007),  available at http://www.conservationtools.org/uploaded_files/0000/0256/good_governance_practices.pdf.

[16] As used on Form 990 “independent” generally refers to directors that are not financially significantly benefited by the organization (nor are their family members or business interests).

[17] Eric Kelderman, IRS Discloses 2009 Plans for Reviewing Tax-Exempt Organizations, in The Chronicle of Philanthropy (November 25, 2008).

[18] Bubbling Well Church of Universal Love, Inc. v. Comm’r, 74 T.C. 531 (1980), (“The domination of an organization’s board by one family does not necessarily disqualify it for exemption, however it does provide an obvious opportunity for abuse of tax-exemption, and therefore there must be open and candid disclosure of all facts of the organization, including its finances and operations.”)

[19] New Hampshire, e.g.

[20] Regs. 1.501(c)(3)-1(c)(2)

[21] Barry S. Bader & Elaine Zablocki, Executive Compensation: Prepare to Defend Your Process and Executive Pay, in Great Boards (Spring 2009).

[22] This recommendation, found in the 2005 version of its Voluntary Best Practices for U.S.-Based Charities available at http://www.treas.gov/offices/enforcement/key-issues/protecting/docs/guidelines_charities.pdf is based upon the June 2005 final report to Congress of the Panel on the Nonprofit Sector available at http://www.nonprofitpanel.org/Report/final/Panel_Final_Report.pdf .

[23] Beverly A. Browning, Winning Strategies for Developing Grant Proposals p.20 (2d ed. 2005) (“For organizations that spend a total of $500,000 or more in federal funds (calculated based on awards from all federal programs) – an audit by a private, independent outside legal or accounting firm is required.”)

[24] The support test requires that 1/3 of our total support comes from the public.  In figuring this 1/3, the most noteworthy part of this test is the 2% rule.  This rule takes 2% of the total support and says that is the amount that any one donor (including private individuals as well as corporations and other organizations) can give to be counted as public support.  Anything in excess of that 2% figure is considered “non-public” support.

[25] Bruce R. Hopkins, The Law of Fundraising § 3.2 (4th ed. 2009).

[26] Bruce R. Hopkins, The Law of Fundraising § 3.2 (4th ed. 2009) (“About a dozen states exclude from the term solicitation the process of applying for a government grant.  Occasionally state law provides that the word contribution includes a grant from a government agency or excludes the quest for a grant from a private foundation.”).

[27] For a discussion of recent actions taken against charities and fines imposed, see Jamie Usry’s 2008 article Charitable solicitation within the nonprofit sector: Paving the regulatory landscape for future success pp. 23-24 available at http://www.cppa.utah.edu/publications/nonprofit/Charitable_Solicitation.pdf.

[28] Beth L. Leech, Funding faction or buying silence? Grants, contracts, and interest group lobbying behavior, in Policies Study Journal (Feb. 1, 2006).

[29] County Allegheny v. American Civil Liberties Union, 492 U.S. 573, 591 (1989).

[30] Laskowski v. Spellings, 443 F.3d 930 (7th Cir. 2006); Americans United for Separation v. Prison Fellow., 509 F.3d 406 (8th Cir. 2007).

[31] Americans United at 418.

California Charity to Pay for Self-Dealing & Other Offenses Thursday, Dec 10 2009 

California’s Attorney General filed suit against the L.B. Research Foundation (“L.B.”) and its board members this past September, disclosing alleged areas of “gross mismanagement” and requesting involuntary dissolution of the organization.

The apparent deficiencies noted, as described below, could easily occur in charities that are not aware of pertinent legal requirements.

Failure to Maintain Adequate Books & Records

L.B. was unable to produce many of the many of the documents requested by the Attorney General, including adopted bylaws, grant applications, grant agreements, final grant reports, or meeting minutes for the first 7 years – all things required of private foundations under various US and California code sections.[1] Board members have a fiduciary duty of care to keep proper books.

Violation of Board Officer Rules

In California, a nonprofit public benefit corporation must have a chairman, a secretary, and a chief financial officer.  The chairman cannot concurrently serve in either of the other two offices.  In this case, Mr. Buckberg (the founder) was single-handedly selecting the officers – who purportedly did not even know of their appointments until the annual meeting.  Board members were sometimes uninformed of the names of fellow board members. Grants were being fully distributed before the “officers” were aware of them.

The board was not operating as a board as it did not have control; all decision making was in the hands of Mr. Buckberg.  This scenario may have an all too common resemblance to many nonprofit boards.


The prohibition of private inurement and self-dealing, though central to the definition of a nonprofit organization, are too often glossed over by nonprofit leadership.  This apparently was true of the board of L.B. – which to all appearances was unaware that the charity could not award grants for the private benefit of board members.

Substantial contributors to a private foundation or those in management over it are considered “disqualified persons,” meaning that they are prohibited from using, receiving, or benefiting from the organization’s assets or income.[2]

Yet according to the Attorney General, L.B. reportedly made the following grants:

  • Over $60,000 to UCLA Foundation to support Mr. Buckberg’s research and laboratory
  • Over $120,000 to produce an educational DVD, all rights being owned by Mr. Buckberg and his cousin, and which also supported a patent owned by Mr. Buckberg and another board member
  • Over $15,000 to a for-profit company owned by Mr. Buckberg and his cousin for the production of the Helical Heart Model, which was also patented by these individuals
  • Over $140,000 for research which would be overseen by Mr. Buckberg
  • Over  $50,000 for expenses related to conferences to promote a medical device patented by Mr. Buckberg and another board member
  • Over $40,000 for statistical analysis related to the same medical device
  • Over $8,000 to a board member for research and a conference
  • Funneling $25,000 to a board member’s friend as quid pro quo for the member’s donation
  • Over $1,000,000 to UCLA to create an endowed faculty chair that Mr. Buckberg applied for, which he did not get, and then spent over $400,000 in legal fees suing UCLA for the position

Members of a nonprofit board have a fiduciary duty of loyalty, which prohibits the kind of self-dealing that was seemingly pervasive among this board, and primarily by its founder.

Expenditure Responsibility

When a private foundation makes a grant to a non-tax-exempt entity, it is required to exercise expenditure responsibility, whereby it must 1) make pre-grant inquiries, 2) enter into grant agreements, 3) obtain full and complete reports and final reports from the grantees, 4) base grants to individuals on procedures preapproved by the IRS, 5) award grants on an objective, nondiscriminatory basis from a pool large enough to constitute a charitable class, and 6) keep all records related to grants made to individuals.

L.B. adhered to virtually none of these requirements when doling out grants, which consequently should have been considered taxable expenditures.


A settlement agreement was reached by all on December 4, requiring the organization and several of its officers to pay hefty sums, including all the Attorney General’s legal fees.  The organization is required to undergo board member training and hire consultants to rework its policies and develop proper granting procedures.  The board must also increase the number of independent members.  Mr. Buckberg was stripped of financial control, including the checkbook.  He even has to turn over his keys to L.B.’s post office box.

Although L.B. was not forced to dissolve as the Attorney General originally sought, this resolution has left the organization unrecognizable in terms of its management, and probably its reputation.

Organizations should not be lulled into apathy because past corner-cutting has yet to be exposed.  L.B. Research Foundation “got away with it” for ten years before paying a big price.

Lastly, the ignorance of L.B.’s board not only didn’t serve as a defense – it was in fact counted against them.

This case and settlement can be located at the following links, respectively:



[1] 26 U.S.C. § 4945; California Corporations Code §§ 6620, 6321, and 6322.

[2] 26 U.S.C. § 4946(a) and (b).

Clergy Malpractice Insurance? Wednesday, Nov 18 2009 

Does your organization need “clergy malpractice” insurance?  This question comes up because insurance companies have been offering this since the late 1970’s when clergy malpractice claims first were attempted.  But note – courts have yet to recognize claims for “clergy malpractice.”[1] Therefore, why do insurance carriers offer coverage of such?

The term “malpractice” means an instance of incompetence or negligence on the part of a professional that caused damages.[2] This has been applied successfully in the medical, legal, and advisement fields, but has never been successfully applied to the church.  The most common scenario prompting clergy malpractice claims is when the clergy serves as counselor.  Most commonly litigated situations include improper sexual relationships arising from the intimacy of counseling sessions, failure to refer potential suicide victims to help, or simply poorly given advice.  As stated above, however, none of these scenarios has resulted in a successful malpractice claim against the clergy (nor can the church be held liable when no negligence is proven against the clergy).

Besides the courts’ hesitation to get into sticky First Amendment issues, a more immediate barrier is that of practicability.  Courts will not apply malpractice to churches because of the lack of a uniform standard.  In negligence cases, it is imperative to show that there was a duty owed by the defendant to the plaintiff.  If that duty was breached and harm resulted, then the plaintiff will recover damages.  In fields of medicine and the law, those duties are uniformly applied.  The question is often “what procedure is customarily performed in this medical scenario?” or “how would a competent attorney advise his client in this situation?”  But how would the courts define what that duty is for a clergyman?

The difficulty lies with the fact that churches are so diverse in beliefs, protocol, and requirement of their clergy.  In fact, the term “church” itself is no where defined and encompasses many more religious organizations than are called “churches” (such as temples and mosques).  A judge from the most famous clergy malpractice case (Nally v. Grace Community Church) stated,

“[B]ecause of the differing theological views espoused by the myriad of religions in our state and practiced by church members, it would certainly be impractical, and quite possibly unconstitutional, to impose a duty of care on pastoral counselors. Such a duty would necessarily be intertwined with the religious philosophy of the particular denomination or ecclesiastical teachings of the religious entity.”[3]

The Nally case was brought against John MacArthur’s Grace Community Church of the Valley in the 1980’s after a counselee of the pastoral staff committed suicide.  The parents claimed that the pastors should have done more to prevent the suicide.  They also criticized the church doctrine of “once saved, always saved” as it had the effect of encouraging rather than discouraging their son’s suicide.

But the court refused to cast judgment on what should or should not have occurred in the counseling sessions.  Quoting an article of Sam Ericsson (formerly with Christian Legal Society, now President of Advocates International) the Nally court said “the secular state is not equipped to ascertain the competence of counseling when performed by those affiliated with religious organizations.”[4] The most famous line: “There is no compelling state interest to climb the wall of separation of church [and state] and plunge into the pit on the other side that certainly has no bottom.”[5]

The Nally case decision has been mimicked in other states and seen as persuasive, but is not binding upon other states.  The decision, although overwhelming, was not unanimous in stating that clergy have no duty to parishioners.  These facts indicate that while clergy malpractice has yet to emerge, it is not impossible that it will in the future.  Religious freedom has been redefined in recent decades and undoubtedly has not seen the end of reformation.

Bottom line: Although clergy malpractice is still unacknowledged by the courts, “counseling insurance” could be beneficial for your church as a precaution – not because counselees will likely be successful suing under a theory of clergy malpractice, but because such suits may be attempted.[6] Lawsuits, even if successfully defended, are very expensive because our American court system requires even winners to pay their own attorney fees.  This available insurance is generally inexpensive.  (But make certain it has adequate coverage.)  With an increase in family discord, substance abuses, and economic stress that results in more parishioners turning to their clergy for counseling, the importance of litigation protection grows as well.

[1] Scott C. Idleman, Tort Liability, Religious Entities, and the Decline of Constitutional Protection, 75 IND. L.J. 219, 221-23 (2000).


[2] Black’s Law Dictionary, (8th ed., West 2004).

[3] Nally v. Grace Community Church of the Valley, 47 Cal.3d 278, 298 (1988).

[4] Sam Ericsson, Clergyman Malpractice: Ramifications of a New Theory (1981) 16 Val.U.L.Rev. 163, 176.

[5] Nally v. Grace Community Church of the Valley, 47 Cal.3d 278, 289 (1988).

[6] For more discussion of this recommendation, see Richard R. Hammar’s article Clergy Malpractice (available at: http://www.churchlawtoday.com/private/library/pcl/p04e.htm).

Churches in Court Monday, Nov 9 2009 

In a recent Church Law & Tax Update, Richard Hammar reported the top 5 reasons why churches ended up in court last year.  (Hammar is an attorney and CPA, specializes in legal and tax issues for church and clergy and has authored more than 100 books.)  His findings were the following:

  1. 15% of cases – Sexual Abuse of a Minor
  2. 13% of cases – Property Disputes
  3. 10% of cases – Zoning
  4. 9% of cases – Personal Injury
  5. 7% of cases – Tax

In this report (found at: http://blog.yourchurch.net/2009/11/top_5_reasons_churches_wind_up.html) Hammar provides links to several resources with advice to address these leading issues.

Changes in Campaign Finance Regulations for §527 Nonprofits Monday, Sep 21 2009 

The US Court of Appeals, D.C. Circuit, recently made a significant ruling regarding § 527 organizations – those nonprofits existing primarily to influence the election or defeat of candidates for federal public office.  In the case of Emily’s List v. Federal Election Commission (FEC), decided September 18, 2009, the court majority wrote a 44 page opinion striking down recent (2004) FEC campaign spending limitations applied to these groups.

After the 2004 elections there was significant pressure on the FEC to reform the campaign spending of certain nonprofit groups who had reportedly spent several hundred million dollars in election-related advertising and programming.  There was a push to place restrictions on these groups similar to those on political parties.

This case dealt largely with the difference between hard and soft money.  A § 527 organization must keep two separate accounts.  Contributions in direct support of candidates and political parties is termed “hard money”, and such contributions may consist of no more than $5,000 from any one donor in any given year.  “Soft money” may not be contributed directly but may go towards political expenditures the form of cause or candidate supporting efforts such as advertising, get-out-the-vote campaigns, etc.; a donor may give as much as desired for such support.  Until this past Friday, FEC regulations restricted nonprofits in their activities by requiring that 50% (sometimes more) of certain expenditures come from the hard money account, rather than from the soft money account.  Since hard money is more difficult to accumulate than soft, the activities of these organizations were being inhibited.

The court in Emily’s List traced a history lesson, examining the evolving campaign finance laws as apposed to the freedoms provided under the First Amendment.  The Circuit court noted that the Supreme Court has generally approved statutory limitations on contributions to candidates and political parties – including contributions made by for-profit corporations.  On the other hand it has rejected expenditure limits on individuals, groups, candidates, and parties.

The Emily’s List court, while affirming that an organization’s direct contributions to candidates and parties may be limited, further ruled that such contributions should not prevent the organization from also engaging in supporting expenditures.  The court said, “A non-profit that makes expenditures to support federal candidates does not suddenly forfeit its First Amendment rights when it decides also to make direct contributions to parties or candidates.”  The organization in question – Emily’s List – is a pro-choice organization that makes supporting expenditures as well as direct contributions in furtherance of its causes and endorsed candidates.

The court ultimately boiled the issue down to whether these independent nonprofit organizations should be treated like individual citizens (which are entitled to expend unlimited amounts to express their views through supporting expenditures), or like political parties (which may be restricted).

Through lengthy discourse the court explained that § 527 organizations like Emily’s List, being neither for-profit nor closely connected with a particular candidate or political party, do not represent a situation ripe for corruption, which was the situation of concern behind campaign finance restrictions in the first place.  The court said, “Donations to and spending by a non-profit cannot corrupt a candidate or officeholder, at least in the absence of some [evidence] establishing such corruption or the appearance thereof.”  The court concluded that these organizations should be treated as individuals for political expenditures purposes, and therefore are entitled to have 100% of such expenditures come from their soft money accounts – the accounts that do not limit donations by individuals.

While § 527 organizations should be aware of the new rules, it remains to be seen whether this ruling will hold fast.

The full text of this case can be found at http://pacer.cadc.uscourts.gov/common/opinions/200909/08-5422-1206889.pdf.

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