There is no denying that social media’s importance to organizations, including nonprofit organizations and associations, is growing exponentially.  Blogs, Listservs, YouTube.com, and social networks like Twitter and Facebook offer nonprofits a range of benefits, enabling them to market themselves in new ways, disseminate their messages and missions, educate users, connect with other nonprofits, recruit volunteers, solicit donations, and increase audience interaction.  These benefits, however, come with certain risks. 

In this two-part article, we touch upon some of the common legal issues associated with nonprofit organizations’ and associations’ use of social media and provide guidance on how to avoid them.  Specifically, in this first part, we analyze the intellectual property, insurance, and solicitation issues surrounding a nonprofit entity’s use of social media and the steps that can be taken to mitigate these risks.   

Intellectual Property

Because social media sites enable users to post comments and upload their own content, nonprofit organizations and associations should take steps to avoid allegations of copyright and trademark infringement.  This can be accomplished by monitoring content that is posted to the organization’s social media sites, whether by employees or users of the site.  Any third party content, including text, photos, trademarks, graphics, or other media content, that is posted on a social media site without the owner’s permission may constitute copyright and/or trademark infringement and should be removed from the site.  While some uses of copyrights or trademarks may constitute “fair use,” it is best to obtain permission.   

Nonprofit organizations and associations should also monitor the online use by others of their own trademarks, service marks, names, logos, and designs, as improper or unauthorized use will detract from the value, impact, and distinctiveness of the marks.

In addition, nonprofits should take precautions when using a person’s likeness on their social media sites.  Specifically, when posting photos or videos of someone, it is advisable to obtain a publicity release from that person, especially if the likeness is being used for a commercial purpose.

Insurance

Whenever a nonprofit organization utilizes social media as part of its business operations, it is recommended that the organization’s insurance policies (such as its directors and officers, media, and errors and omissions policies) be examined to ensure that coverage is up-to-date and extends to claims resulting from the use of social media.  If not, additional coverage that encompasses social media should be obtained from the nonprofit organization’s insurance agent or broker.   Of course, because it is impossible to obtain coverage that protects against all risk, it is also important to have in place a comprehensive social media policy (discussed further below) to minimize exposure that is not covered by its insurance policies. 

Endorsements and Testimonials

Nonprofits should be aware that the Federal Trade Commission’s recently updated Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Guides”) are applicable to “consumer” testimonials, such as reviews and recommendations that endorse a product or service on any social media site.  The Guides require disclosure of any connection between the endorser (which for a nonprofit organization could be an employee or member) and the advertiser, in this case the nonprofit.

The Guides require advertisers to advise the consumer giving the testimonial that the connection has to be disclosed and to have procedures in place aimed at monitoring the consumer’s postings for compliance with the disclosure requirement.  Failure to comply with the Guides may result in liability for not only the advertiser, but also for the individual giving the testimonial.  So nonprofit organizations and associations should ensure proper disclosure in connection with any endorsement or testimonial.    Online Solicitations

Using websites to solicit charitable contributions is becoming increasingly popular.  But Section 501(c)(3) organizations need to be aware that state charitable solicitation laws may apply to both traditional and web-based fundraising, such as accepting donations through a website.  Moreover, states have different laws governing the solicitation of charitable contributions.  Generally, these laws mandate that charitable organizations register with a state agency prior to soliciting contributions from residents of the state.  This, of course, poses a problem, since soliciting contributions via the internet has the potential to reach donors in all fifty states.  Nonprofits may attempt to limit the geographic scope of donations they accept by, for example, posting disclaimers on their donation page stipulating that they only accept contributions from the states in which they are registered or removing states in which they are not registered from the pull down menu on their donation page.  On the other hand, compliance with all applicable laws is important and registration and reporting in all applicable states will be required for national fundraising campaigns.

In part two, we will continue to examine social media from a legal standpoint by discussing employees’ use of social media as well as what to include in a social media terms of use policy.  To be continued in our next issue…