Does Your Nonprofit Need and AI Policy?

Artificial intelligence (“AI) presents nonprofit organizations with opportunities and risks that warrant careful legal and operational scrutiny. On one hand, AI tools offer substantial efficiencies — streamlining work such as grant writing, donor communications, and program analytics in ways that can meaningfully expand your mission-driven impact without requiring additional resources. On the other hand, you must be aware of the security, data privacy, and legal privilege risks that AI brings. Additional obligations to ensure security and data privacy may arise where AI systems process personally identifiable information of beneficiaries, donors, or volunteers. You should also be mindful of liability exposure arising from AI-generated content — including but not limited to potential claims of copyright infringement or misrepresentation.

If you are thinking about adopting AI-driven tools, we encourage you to establish a written AI use policy approved by your board of directors to ensure everyone in your organization understands how best to use AI while keeping the organization safe.

MASSACHUSETTS GOVERNOR MAURA HEALY’S OFFICE ISSUES GUIDANCE TO NONPROFITS & RESIDENTS ON INTERACTIONS WITH ICE & CBP AGENTS

Governor Healy’s Office guidance encourages nonprofits to adopt written policies and procedures and hold trainings for staff to guide their interactions with Immigration and Customs Enforcement (ICE) and/or Custom and Border Protection (CBP) agents.   

KEY TAKEAWAYS

·         Staff should remain calm if they encounter ICE agents or CBP.

·         Staff should never physically interfere with a federal agent.

·         Staff should not feel obligated to engage with the agents first and are allowed to decline interaction if they do not feel safe.

·         Staff should prioritize safety for themselves and others.

·         Staff should not discuss any individual staff members, children, students or families with ICE or CBP agents under any circumstances.

·         Nonprofits should designate specific areas in their facilities as public or non-public with appropriate signage.  They should adopt policies and procedures concerning these designations as well.

·         Nonprofits should designate the highest-ranking manager to serve as the contact person “Administrator” for the organization in the event of ICE/CBP contact.

·         Staff are encouraged to document their interactions with the agents as well as any impact the agents have on themselves or others, including the children or students in their care.  Documentation may include recording the interactions if it is safe to do so.

If ICE or CBP arrive at your facility, staff should be instructed to:

·         Notify the Administrator immediately.

·         Instruct the agents to wait outside of the facility or in a public area while they are contacting the Administrator.

·         Administrator should immediately contact their attorney for guidance.

·         With your attorney on the phone, the Administrator should approach the agents and request their identification as well as any warrants and/or other documentation. The Administrator should then describe the documents out loud to the attorney.  If possible, they are encouraged to facetime with the attorney or to take photos of the documents and send them to the attorney immediately for the attorney’s assessment.

·         Agents must have a JUDICIAL WARRANT or JUDICAL COURT ORDER. 

·         Administrative Warrants are not legally sufficient.

·         Only if the agents have a Judicial Warrant or Order must they be permitted into the facility. 

·         Administrators may request that the agents stay out of areas with children or students.

Our attorneys are available to assist you and your organization in developing ICE/CBP interaction strategies as well as crafting any appropriate policies & procedures.

Links to the full text of the guidance and other resources are provided below:

KNOW YOUR RIGHTS GUIDE FOR IMMIGRANTS, FAMILIES & COMMUNITIES download

Immigration Guidance_Education

Immigration Guidance_Places of Worship

Immigration Guidance_Healthcare

In addition to the guidance, Governor Healey and Attorney General Andrea Campbell have launched an online portal which allows Massachusetts residents to report alleged misconduct by Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP) and other federal agencies enforcing civil immigration laws.  Report misconduct by federal agents | Mass.gov

VOLUNTEERS AND STIPENDS

Q- Our volunteers regularly go above and beyond. Can we give them a stipend to say thank you for their services to our organization?  

A - Volunteers are the lifeblood for so many nonprofits.  It is natural to want to recognize their service to your organization with a cash gift or stipend.   However, before a nonprofit makes any payments to its volunteers, it is important to understand the potential legal issues this can raise.  These issues include state and federal wage and hour law liability, tax liability as well as impacts to volunteer liability protections.

Volunteer vs. Employees

“The line between employee and volunteer status is often a thin one.[1]” 

When giving stipends, nonprofits must be careful not to inadvertently create the expectation that their volunteers are being paid for their services.  If the volunteers expect payment, the nonprofit risks changing the relationship from “volunteer” to “employee” by operation of the law.  Employees expect to be paid.  Volunteers do not. 

Why does this matter?

Employees are entitled to minimum wage, employment benefits, protections and rights under state and federal law.  If volunteers are considered employees by law, the organization would become liable for minimum wage payments, overtime, and other statutory employment benefits.

But we know that other nonprofits pay their volunteers stipends all the time. 

Federal and state agencies do allow for the payment of a “nominal fee” to volunteers as long as it is not a substitute for compensation and is not tied to productivity.   The agencies presume the payment is nominal if the amount paid to the volunteer is under $500 or does not exceed 20% of what it would cost to hire a full-time employee to perform the same tasks.

If your nonprofit decides to pay its volunteers a stipend, please keep the following in mind:

1.      The federal Volunteer Protection Act (a federal law which offers limited liability for certain torts for individuals volunteering for nonprofits) applies to paid volunteers up to a $500 cap.

2.      Massachusetts passed a law in 2024 that allows nonprofits to pay volunteer board members up to $500 for serving on a nonprofit board without losing the personal civil liability protections afforded by Massachusetts General Law Chapter 231, Section 85W.

What about taxes?

There are also potential tax consequences to keep in mind. Volunteer recognition gifts such as t-shirts, mugs, and small holiday gifts (a/k/a “de minimus benefits”) are not taxed. Cash gifts including gift cards are taxable as income.   Volunteers who receive stipends must be treated the same as paid staff, and payroll tax contributions (FICA) must be withheld from their pay.   Finally, any payments made to volunteers greater than $600 need to be reported on the IRS Form 990.

We hope this article is helpful to you.  We recommend that nonprofits who decide to pay their volunteers a stipend consult with their tax professionals and our attorneys at Elizabeth Reinhardt & Associates before doing so. 

[1]MA Department of Labor Standards Opinion Letter MW-2002-021 “Applicability of M.G.L. c. 151 to Volunteer Work” (August 9, 2002).