Legal and Governance Matters

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Legal and Governance Matters

As an established entity, HLAA State Offices, State Associations and Chapters have certain obligations as they represent all of the Hearing Loss Association of America in their states and local communities. At HLAA’s national office, we work to keep the number of requirements for the state organizations and chapters to a bare minimum. We have listed below those legal and governance requirements. (There are also financial obligations. Click here to learn about them.)

IRS, State and HLAA Requirements: Initially and Yearly

IRS Requirement: Employer Identification Number (EIN)
Does the state organization or chapter you help lead have a bank account? Does the organization receive income from membership dues/newsletter subscription fees, newsletter advertising, contributions, or Walk4Hearing funds? If so, the organization needs to obtain an Employer Identification Number (EIN), described below, from the Internal Revenue Service (IRS). Each state organization and chapter must have its own EIN even if they are covered by the HLAA group exemption. (Getting an EIN is separate from obtaining tax-exempt status under section 501(c) (3) of the IRS tax code.)

An EIN looks like this: 15-0000456 (two digits with a dash followed by 7 more digits). Getting an EIN is easy and free. Use one of these three ways to obtain an EIN.

  • Use the EIN Online Assistant to obtain your EIN in a matter of minutes.
  • Call the local IRS office. Look for the telephone number in the U.S. Government section of the local phone book. You will get the organization’s EIN within roughly an hour.
  • Complete the EIN application form, sign it and mail it or fax it to the IRS. If you have DSL Internet service, download the SS-4 form from the IRS Website. (If you have dial-up Internet service, please call the HLAA State and Chapter Coordinator at 301.657.2248 to request the form.) Send the completed, signed form to the IRS by fax (1.859.669.5760) or mail (Internal Revenue Service, Attn:  EIN Operation, Cincinnati, OH 45999). It may be six to eight weeks before you receive the EIN from the IRS.


Please Note: The formal name of the organization you help lead is Hearing Loss Association of America [blank] Chapter [or State Association or State Office].

See a sample of a completed EIN application form. To learn more, see the IRS document titled Understanding Your EIN.

Once you receive the organization’s EIN Assignment letter, please send a copy to the HLAA State and Chapter Coordinator.

State Requirements
Check with your state government concerning any registration requirements for non-profit organizations. The government entity may be the Secretary of State, the State Franchise Tax Board or other entity with a similar name. For help with this, please contact the HLAA State and Chapter Coordinator.

HLAA Requirements
HLAA headquarters staff is committed to partnering with you to help the organization you lead thrive. We want to get a snapshot of our state organizations and chapters once or twice a year. The main way we stay in touch with you is through the Chapter/State Update form. In addition, if your organization is included in the HLAA group exemption from federal income taxes, the list of your organization’s officers meets the IRS’s requirement for that information.

All HLAA Chapters and State organizations must complete a Chapter/State Update form and send it to the HLAA State and Chapter Coordinator by October 1 every year. Organizations that submit the Chapter/State Update form on time are listed on the HLAA website. (Neglecting to send in the form on time may mean that your organization has ceased to exist. Our webmaster needs to know your status to keep the website current so people looking for help don’t have dormant leads.) HLAA encourages all State organizations and Chapters to email changes in leadership (or revised bylaws/standing rules) at other times to the HLAA State and Chapter Coordinator.

In addition:

  1. HLAA State organization and Chapter leaders/officers must be current HLAA members while in office. State organizations and Chapter represent HLAA nationwide in their states and communities, hence this requirement.
  2. If the state office or chapter gained exemption from federal income tax under IRS tax code 501(c)(3) through HLAA (known also as “group exemption”), it must submit their annual budget to the HLAA State and Chapter Coordinator by October 1 each year. Failure to submit the budget (and Chapter/State Update form) will result in the organization being dropped from the HLAA application for federal income tax exemption.

Insurance

Liability insurance
Most HLAA organizations hold regular meetings or special events such as libraries, community centers, senior living facilities and churches. The business manager at the facility may request a certificate of liability from the organization. The certificate is proof that the organization has liability insurance, called a “certificate.” You may obtain this certificate through HLAA headquarters by completing this form and sending it with payment of $75 to HLAA.

You can fax the form with credit card information to 301.913.9413, email the completed form with credit card payment as a PDF document, or mail the form and payment to HLAA, 7910 Woodmont Ave., Suite 1200, Bethesda, MD 20814.)

State organization or Chapter meeting and/or special event venues are added as riders to the HLAA headquarters’ liability policy; the associated fee our headquarters incurs ($75) is passed along to the requesting state organization or chapter. The person requesting the certificate receives an email containing the certificate; it is that person’s responsibility to provide it to the requesting facility manager or contact person.

Operations insurance
The organization may want to consider buying Directors and Officers (D&O) insurance for its leaders because claims may be made against them personally in connection with their roles within the organization. Specifically, D&O insurance is protection against a breach of “duty” by the leaders. These policies cover actual or alleged wrong decisions or “wrongful acts.”

Examples are failure to provide services promised by the organization and failure to properly manage the funds of the organization. (D&O insurance does not cover bodily injury or property damage known as tort claims.) Without such coverage, leaders can be held personally responsible for certain acts of the organization. Call an insurance broker in your area to inquire about the extent coverage that may be required and associated rates. HLAA recommends getting as much coverage as appropriate and as the organization can afford. HLAA is unable to provide this coverage for our state organizations or chapters.

Incorporation

All HLAA State Associations and some Chapters are incorporated under the laws of the states in which they are located. Unincorporated chapters need to understand advantages and disadvantages of incorporation.

The primary advantage of incorporation is that members of the organization and its leaders are protected in those roles from personal liability from claims that the organization breached contracts and from claims that the organization committed torts. Under the law of some states, similar protection is provided for members and leaders of unincorporated organizations. Unincorporated chapters need to investigate the law of the states in which they are located. Exposure to liability could present a problem in states without such protection if the unincorporated chapter’s activities raise concerns about contract or tort liability.

A second potential disadvantage of an unincorporated organization is that it may lack certain legal authority. In most states, unincorporated organizations have similar powers as nonprofit corporations; that is, they may sue and be sued; can acquire, hold, and transfer an estate or interest in real or personal property; and can be the beneficiary of trusts, contracts, and wills. To ascertain whether and to what extent such a disadvantage exists, an unincorporated chapter needs to investigate the law of the state in which it is located.

The primary advantage of unincorporated organizations is that they are not subject to state requirements regarding organizational structure, record-keeping and reporting requirements. Generally, state laws impose requirements on nonprofit corporations such as the number of directors, voting rights of directors and members, notices for meetings, and the titles of officers and their duties. State laws may also impose record-keeping and reporting requirements for nonprofit corporations. Unincorporated organizations may operate with much greater informality.

If, after weighing the advantages and disadvantages of incorporation, a chapter decides to incorporate, they would submit the necessary paperwork required by their state or contact a lawyer to file the documents on their behalf.  A Certificate of Incorporation issued by the state is official recognition of a formal organization. (Please send a copy of the certificate to the HLAA State and Chapter Coordinator.) Cost may also be a consideration in incorporation. Attorney and filing fees vary from state to state. The cost is lower, of course, if the organization does not use attorneys’ services.

Governing Documents

Each state organization and chapter needs organizational and operational documents as a foundation. Standing rules or bylaws provide details that explain the chapter’s mission (which is identical to the HLAA mission) and are useful in preventing and solving governance disputes. Standing rules and bylaws may be interchangeable depending on the laws of the state.

HLAA State Associations or Chapters that are incorporated must have bylaws on file with the appropriate state government agencies or offices.

Governance Models

There are two, basic models of governance: operating by planning or steering committee, and or by a formal board of trustees. The formal board is the best known and most structured governance type. By contrast, the planning or steering committee model requires members to elect only a leader, treasurer and secretary. (HLAA recommends that each person serve a minimum of a year in the role.) Participants may join and rotate off the committee at will. The job of the leader is to help motivate and track the activities of committee chairs and/or participant leaders. The leader is also the main liaison between the organization and HLAA National.

State associations are incorporated and are required to operate with a formal Board of Trustees. Some chapters are incorporated and therefore also operate with a formal Board. State offices may have a leadership team or operate solely by the director. Most chapters are run by a formal Board or by steering committee.

For a list of key leaders’ job responsibilities, please see a list of Board Position Descriptions.

Committees
Having committees or self-appointed liaisons in various capacities can be helpful to make the organization run smoothly. Having many people involved in the chapter’s operation can help them feel that they have ownership of the organization. Below is a list of potential committees.

  • Advocacy
  • Assistive Devices
  • Awards
  • Looping
  • Membership
  • Program and Education
  • Public Awareness/Outreach
  • Scholarship
  • Social
  • Walk4Hearing (an annual commitment)

Steering (Planning) Committee/Board Meetings
Consider making steering committee/board meetings as short as possible (no more than 90 minutes if the group meets monthly), action-oriented (each item on the agenda has an outcome) and hold them in a relaxing place (where everyone also can hear). One option is to hold such meetings immediately after member meetings. Every chapter participant is welcome to come to these meetings.

We recommend that a secretary take notes and send to each person that attends a summary of the meeting and a list of tasks to be done that includes the name of the person responsible for completing the task and the date by which they project it will get done.