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November 21, 2014

Web Presence & Internet Concerns for Not-for-Profit Organizations: Liabilities (article)

(Editor's note: This is the final article in a three-part series on internet concerns for not-for-profit organizations. To read parts one and two, please visit: Web Presence & Internet Concerns for Not-for-Profit Organizations: Hyperlinks and Web Presence & Internet Concerns for Not-for-Profit Organizations: Fundraising, respectively)

Most not-for-profits these days no doubt use the Internet to connect with their community and distribute valuable information and resources. The unlimited access to online content provides opportunities to educate the public about the importance of your not-for-profit's mission.

Unfettered access and content, however, comes with potential liabilities of which not-for-profits should be aware. From copyright issues to privacy and the potential for defamation, many risks are associated with your organization's website. A not-for-profit must monitor its online presence closely. IRS agents  might be looking for these liabilities and can easily "audit" your website by just browsing through it.

The last article in our Web Presence & Internet Concerns series examines the risks and other concerns that arise from online interaction. Below, we have outlined some of the key liabilities that you may encounter with your website. Examine these areas closely and review the policies you have in place to ensure they are working effectively to manage your risks.

Terms and Agreements

One of the most important features of your website is its Terms of Service agreement. In this written arrangement, your website outlines its legal disclosure obligations, grants users the right to use website materials, imposes acceptable use obligations, limits (or attempts to limit) warranties and disclaims (or attempts to disclaim) liabilities. It is used to structure the legal relationship between the website operator and its users. The public should be able to access your Terms of Service agreement from anywhere on the website. An example of a disclaimer for a medical not-for-profit would be that the information on its site is not a substitute for a physician's advice.

Some organizations use their website to collect demographics, email addresses and other information from the public. If your web server collects any of this information, use of the data must be explained in full in either the Terms of Service or related documents.

Intellectual Property

If you want to use a video, picture or text that you didn't create, be sure you receive the proper permission for its use. Digital content is subject to the same copyright and intellectual property laws as printed materials. Work taken from the Internet should have the correct copyright information including the symbol, ©, year and author. Designate work-for-hire content with a disclaimer or other type of notation to alert users of your website that it comes from a third-party provider.

Some material may not need copyright attribution if the material qualifies for fair use. Fair use permits the limited use of copyrighted materials without acquiring permission from the copyright holder. However, to be on the safe side, follow these rules: 

  1. Assume it is protected.
  2. Read the terms and conditions agreements on the website.
  3. Remove unauthorized material from your website if someone complains.
  4. Investigate claims promptly.
  5. If there is any question as to the source of the information, seek permission.

Consult your legal team or the U.S. Copyright Office for more information if you have questions about content qualifying for fair use.

Speaking engagements commonly trigger intellectual property concerns. Your not-for-profit needs the appropriate licenses in order to use a speaker's presentation, picture, video or other materials to promote the event on your website.

Right of publicity also comes into play with not-for-profit websites. Before you use sponsors' logos, names or other branded materials, make sure you have permission. Again, the same rules apply to digital formats as your printed materials, so follow the same precautions for the Web that you would for print.

Not-for-profits must consider intellectual property rules for their own content as well. Companies or other entities that use your branded materials as part of an endorsement could raise unrelated business taxable income (UBTI) concerns for your organization. To mitigate this risk, your not-for-profit should specify who uses its content, for what purpose and for how long. Royalty payments are also subject to regulations, so monitor them closely.

Social Media and Message Boards

Your not-for-profit's social media account speaks for the organization. Organizations need editorial control over the posts associated with their social media accounts to ensure consistent organizational messaging. Misuse of social media accounts could lead to irreparable reputational damage, which could have a ripple effect on the funding and support of your tax-exempt mission.

The same need for oversight applies to any message board or user-generated forum. Posts from the public can sometimes veer into defamation territory, and if these posts are left uncensored, your organization could be liable for the consequences.

Privacy and social media is also a concern. Your organization needs to ensure no restricted information is shared through its social media accounts or online forums. For guidance on the types of information that should not be shared online, review this document published by the IRS.

We recommend your organization implement a social media policy for both its employees and for the organization's official social media accounts and online forums to protect itself from unnecessary risk exposure. Please consult your local CBIZ advisor to learn more about what an acceptable social media policy would be for your organization.

Take Charge of Your Site

As with your internal operations, control goes a long way to mitigating your risk online. Well-defined practices and policies can prevent minor issues from becoming major risks or even lawsuits. If you have any questions or concerns about your website's liability, please contact your local CBIZ office for more information.

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