by Doug Bechtel
The Actors Theater of Orcas Island
About the Author
Doug has been CEO of non profit cooperative corporations
for 25 years and has served on dozens of non profit boards.
He is currently President of The Actors Theater of Orcas Island,
which was founded in 1999. He is also a founder and current
Secretary of The Orcas Island Community Foundation, and has
recently served on the following non profit boards: The Orcas
Island Medical Center Association, The Orcas Island Sportsmans
Club, the Kiwanis Club and the Chamber of Commerce. Active
in the theater since 1996, Doug has been producer, director,
actor, techie and anything anyone would let him do.
This is an issue that has recently received a lot of attention
at nonprofit organizations all over the country. In a nutshell,
a donor-initiated fund raiser is an event that is held by a group
not associated with your organization for the express purpose
of raising money for your organization.
For example, suppose a few supporters of your theater decide
to hold a golf tournament, charge $100 an entry and pledge the
net receipts to your theater. No problem, you think? It depends.
If your theater permits the use of its name, either by permission
or failing to prohibit the use of your theater's name, your group
can be held responsible for the event, including providing the
IRS tax receipts for the golfers, paying any unpaid bills for
the event and financial liability for anything that goes wrong.
What does all this mean? How does it come about? To continue
our example, you might receive an invitation to the golf tournament
or read an article in the newspaper about the event. The wording
may be relatively innocuous such as: "Come to our golf tournament
and help the XYZ Theater" or "All profits to benefit
the XYZ Theater" or "Your tax-deductible donation will
help the XYZ Theater". All of these can make the XYZ Theater
responsible for the fund raiser.
99.9% of these fund raisers will come off without a hitch and
your theater will get a nice check for the work that others did.
It is that one in a thousand event that has a problem that will
come back to haunt you.Suppose someone has too much to drink
at the awards party and gets into trouble on the way home. Where
are the deep pockets when the attorneys get involved? The event
sponsors? Probably not. Your theater may be viewed as the deep
pocket and all of a sudden you find yourself in a lawsuit for
something you had no control over.
How do you protect yourself? No one can use the name of your
theater without your permission. If someone does, you need to
stop them from using it. Vigorous and prompt action to stop the
use of your theater name is essential. This does not mean that
the group cannot give you any money that they want, just that
they can not use your name in the promotion ofthe event.
A caveat: I am not an attorney, just a community theater afficionado
You need to talk to someone with more knowledge if you think
you may have a problem.