Limited Liability of Charitable Organizations

• Key point: A few states limit the amount of money damages that can be collected against a church or other charity. However, these laws do not necessarily protect officers or directors who are sued personally.

• The Supreme Judicial Court of Massachusetts ruled that a state law limiting the liability of charitable organizations to $20,000 does not apply to officers and directors of a charitable organization who are sued personally. A fire occurring on the premises of a nonprofit center for battered women and children killed two women. A lawsuit was filed against the charity that owned and operated the center. The lawsuit also named the four officers of the charity. Massachusetts law contains the following provision limiting the liability of charities to $20,000 in most cases:

It shall not constitute a defense to any cause of action based on tort brought against a corporation, trustees ...