Nonprofits often rely on volunteers to keep programs running, but that reliance can create legal risk when a volunteer arrangement starts to look like an employment relationship. This article outlines common classification red flags, explains why stipends require care, and summarizes the volunteer-liability framework under federal law, Massachusetts law, and D.C. law.

Grant agreements are contracts in legal disguise: they bind your organization to deliverables, reporting timelines, indemnity terms, and clawback rights, and the moment to negotiate them is before signing, not after the funder asks for a refund.

Tax exemption isn't permanent: three years of unfiled 990s triggers automatic revocation, and so do private inurement, excess political activity, and operations that drift from your stated exempt purpose, often before a board notices anything has changed.

Federal 501(h) election covers your IRS exposure, but every state has its own lobbying registration regime, and once your advocacy crosses the state-defined threshold, missing the registration is a strict-liability problem that can shut a campaign down.

Most 501(c)(3) leaders avoid lobbying entirely because they think the rules are restrictive, but the 501(h) election actually quantifies what's allowed, and the limits are higher than most boards realize, leaving real influence on the table.

Nonprofit status doesn't exempt you from federal or state employment law, which means your wage-and-hour exposure, benefits obligations, and discrimination liabilities are the same as any for-profit employer's, even when you can't pay market rates.