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). 

New Guidance from the Office of the Attorney General

Please see below for new guidance recently Issued from the Office of the Attorney General:

• KNOW YOUR RIGHTS: ICE Enforcement

A Guide for Immigrants, Families, and Communities 

Please see here for new guidance issued by the Attorney General in response to the recent surge in immigration enforcement activity throughout Massachusetts.

• Guidance on Employers’ Obligations Under the Wage Transparency Act

Under the Wage Transparency Act, signed into law by Governor Healey, employers with 25+ employees in Massachusetts will be required to: 1.) establish and disclose pay ranges in job postings, and 2.)  disclose pay ranges to employees who request this information.  The law goes into effect on October 29, 2025.

The Massachusetts Attorney General’s Office recently issued guidance for this new law.  You can find a copy in the “resource” section of our website: AGO Wage Transparency Act Guidance 4_30_2025 (1).pdf as well as a link to the AG’s YouTube webinar: Guidance on Employers’ Obligations and Employees' Rights Under the Wage Transparency Act.  For more information about the Wage Transparency Act you can also go to the Commonwealth of Massachusetts’ website at  Pay Transparency in Massachusetts | Mass

2024 Year in Review

We had a flurry of new law as 2024 drew to a close - bringing good news for Massachusetts nonprofits. Check out updates including a new opportunity to offer board members $500 annual stipends and the new MA Attorney General Audit and Review Report dollar thresholds.

Congratulations to Liz Reinhardt!

Liz Reinhardt has been selected as one of Massachusetts Lawyers Weekly Top Women of Law for 2024. The 2024Top Women of Law award celebrates the achievements of exceptional women lawyers who are pioneers, educators, trailblazers, and role models. Liz will be honored together with her fellow recipients at an awards event on November 12th! Please join us in congratulating Liz on this much deserved distinction!

MNN Conference 2024!

It’s October and it’s time once again for the Massachusetts Nonprofit Network (MNN) Annual Conference. This year’s conference, Building the Future, will celebrate creative ways nonprofits are making a difference. The event will be held on Thursday, October 24th at the DCU Center in Worcester and will feature empowering speakers, thought-provoking workshops, and plenty of opportunities for networking. If you are planning to attend this inspiring event, please stop by our table. We’d love to see you! Click here to become a member.

Remote Member Meetings Are Permanent!

We are happy to announce that Section 6A of Mass. General Laws Chapter 180 has been permanently amended to allow on-line member meetings and voting at any annual, regular or special meeting when authorized by a nonprofit corporation's Board of Directors. This amendment now permits meetings of corporate members in-person, hybrid and in all remote settings assuming certain safeguards to ensure adequate notice and voting security are followed. Our Firm was pleased to have an opportunity to comment on the proposed legislation through the highly dedicated team at the Boston Bar Association who advocated for this legislation over many months before it was approved by the legislature and signed into law by Governor Maura Healey on March 29th as part of the omnibus budget bill. Please contact us if you have any questions about this long-awaited law.

Changes to IRS e-Postcard Filing for Small, Tax-Exempt Organizations

Smaller charities whose annual gross receipts are normally $50,000 or less may choose to file Form 990-N, Electronic Notice for Tax-Exempt Organizations (e-Postcard). The IRS now offers sign-in options with Login.gov and ID.me. Both offer access to IRS online services through a secure account that protects your privacy. Currently, users with an active IRS username have the option to access the Form 990-N submission page using their active IRS credentials, however, this option will eventually be phased out. If you have an existing IRS username, the IRS recommends creating an account with Login.gov or ID.me as soon as possible. Please click here to view a copy of the IRS Form 990-N Electronic Filing System (e-Postcard) User Guide.

Online Filing Now Availalble for MA AGO Registration and Form PC

Approval time for online registration and Form PC filing has been dramatically reduced to about a week vs. two to three months when these filings are submitted in hardcopy. The Massachusetts Office of Attorney General Non-Profit Organizations/ Public Charities Division encourages Initial Charity Registration and Annual Form PC to be filed online. See details here. Please contact Machiko Sano Hewitt if you have any questions about these new online filing systems.

MA AGO Publishes an Updated Guide for Board Members of Charitable Organizations

The MA Office of Attorney General Non-Profit Organizations / Public Charities Division (Division) recently published an updated Guide for Board Members of Charitable Organizations (Guide).  The Guide has been a valuable resource for charities and their boards statewide for many years. The updated Guide demonstrates the Division’s renewed focus on certain aspects of fiduciary oversight and operation of Massachusetts charities. Focus areas include duty of allegiance to mission, conflict of interest policy and procedures that are closely aligned with the IRS requirements and emphasis on diversity and term limits as key to keeping vital.  We strongly recommend you share this Guide with your board and management Please contact us with any questions or concerns arising from this revised Guide.