Page 69 - Washington Nonprofit Handbook 2018 Edition

Both officers and directors of nonprofit corporations are afforded some
protection against personal liability to third parties under Washington’s special
immunities law. A director or officer of a nonprofit corporation is not individually
liable for any discretionary decision or failure to make a discretionary decision
within his or her official capacity as a director or officer unless the decision or
failure to decide constitutes gross negligence.

A federal statute entitled the Volunteer Protection Act of 1997 (the “Volunteer
Act”) may also provide some protection to directors and officers of nonprofit
corporations. This statute, which took effect in September 1997, provides immunity
from personal liability to volunteers, including unpaid directors and officers,
working for nonprofit corporations for acts or omissions within the scope of their
assigned responsibilities. To qualify for protection under the Volunteer Act, certain
criteria must be met:

y A person seeking protection under the Volunteer Act must be a
“volunteer.” The Volunteer Act defines a volunteer as a person who
provides services to a nonprofit organization but does not receive
compensation or anything of value in excess of $500 per year for his
or her services. Thus, if a nonprofit corporation’s directors or officers
receive compensation for their services, the Volunteer Act’s protection
will not apply. A director or officer may, however, receive
reimbursement of his or her expenses.

y The volunteer must have been acting within the scope of his or her
responsibilities for the organization at the time the harm took place.
In other words, the officer or director must have been acting in his or
her capacity as an officer or director of the corporation, rather than in

some other capacity, such as volunteering at a fundraising event.

y The officer or director must show that the harm in question was not
caused by his or her willful or criminal misconduct, gross negligence,
reckless misconduct or a conscious, flagrant indifference to the rights
or safety of others. Although these terms are all legal terms with
specific meanings under Washington law, generally, merely being
careless or inattentive is not considered willful, gross or reckless
conduct.

There are several important things that the Volunteer Act does not do.
Perhaps most importantly, the Volunteer Act does not prevent individuals acting as

WASHINGTON NONPROFIT HANDBOOK -58- 2018