Who Sues Non Profit
Organizations and their Directors and Officers?
DONORS - CLAIMS
RESULTING FROM THOSE WHO
MAKE DONATIONS TO THE
ORGANIZATION?
The Board of Directors of a
church was sued by a number
of their donors, alleging
misrepresentation of the
financial status of the
organization. Three members
brought separate suits for
repayment of the money lent
to the church. The first
case settled for $240,000 of
which $117,000 accounted for
expense. The second case
settled for $75,000 and
incurred $86,000 in defense
costs. The last case paid
nothing to the claimant, but
incurred $13,000 in defense
costs. The total loss
including defense costs
exceeded $530,000.
THIRD PARTIES - THIRD
PARTY LAWSUITS CAN BE FILED FOR
VARIOUS REASONS
An organization filed a suit
against a foundation and it’s
Board of Directors for
improperly infringing upon the
claimants intellectual property
rights. The claimant filed suit
seeking injunctive and monetary
relief for the Foundation’s
alleged improper use of
trademarked property while
promoting their fundraiser. The
claim settled and the total loss
including defense was over
$400,000.
EMPLOYEES – THE
MOST COMMON CLAIMS MADE BY
EMPLOYEES INVOLVE
DISCRIMINATION, HARASSMENT,
WRONGFUL TERMINATION,
RETALIATION AND HOSTILE WORK
ENVIRONMENT
•DISCRIMINATION
After ten years of
employment, an employee
was fired for poor work
performance. This
employee brought a
discrimination suit
against their employer
under the Americans with
Disabilities Act (ADA).
The individual alleged
lack of work place
accommodation and
constructive discharge.
The claim was closed for
a total loss of over
$80,000, including more
than $20,000 in defense
costs.
•SEXUAL HARASSMENT
After ten years of
employment, an employee
was fired for poor work
performance. This
employee brought a
discrimination suit
against their employer
under the Americans with
Disabilities Act (ADA).
The individual alleged
lack of work place
accommodation and
constructive discharge.
The claim was closed for
a total loss of over
$80,000, including more
than $20,000 in defense
costs.
•RETALIATION
A former employee
discovered illegal
transactions involving
retirement funds.
Shortly after reporting
the violations, she was
terminated by her
employer. She filed suit
alleging retaliation and
wrongful termination.
The total loss exceeded
$100,000 with the
settlement figure over
$80,000.
•GOVERNMENTAL
AGENCIES - CLAIMS DUE TO
VIOLATIONS OF THE LAW
The United States
Department of Justice
brought suit, alleging
misappropriation of
funds and failure to
revert unused money back
to the government. The
insured received federal
grant money and
allegedly used leftover
grant money to renovate
office space instead of
return it to the
government. The case
closed for a total loss
of over $60,000,
including $21,000 for
defense costs
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