Can a Nonprofit Serve Alcohol at an Event?

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A cornerstone of running any non-profit is the ability to raise money in creative and engaging ways that garner donations and support. A common idea for fundraising events is to create an atmosphere of occasion by offering alcoholic beverages in the form of liquor, wine, and beer. Some organizations see it as an opportunity to raise additional funds through alcohol sales. Others offer adult beverages to attendees so that they are likely to feel – ahem – more generous with their wallets when it comes to making contributions.

It sounds like a win-win for both sides, right? No matter the tactic or motivation, a serious discussion about the offering of alcoholic provisions as a public organization is in order – particularly from a legal aspect. Many board members are keenly aware of the ramifications that may cause the organization, its reputation, and trust fund to fall into complete ruin. Not to mention that the community is losing a valuable, public service.

Examples of potentially hazardous and liability-causing alcohol-fueled incidents may include:

  • guests drinking well-above the legal limit, driving home, and getting into a fatal accident;
  • social incidents that involve public fighting and someone is knocked unconscious;
  • guests walking home, swaying excessively, and being arrested for public drunkenness; or
  • even worse.

Considering the scenarios above, who is really at fault for potential fatalities, hospital bills, and legal fees? Many assume the responsibility lies in the hands of the individual who imbibed beyond the legal limit. Unfortunately, it is not always so cut-and-dry.

After weighing the pros and cons, many nonprofit leaders wonder exactly where the organization’s liability ends and personal responsibility begins. On one hand, there is a need to make money to fund new projects and meet budget expectations. On the other, is it really worth it to offer a meaningless beverage when so much is at stake?

A RULE THAT APPLIES NO MATTER WHAT

Let’s start with the basics. Some call this the “Golden Rule of serving alcohol.” While it may seem obvious, it’s important to stress. Never serve alcohol to anyone underage the age of twenty-one. Government-issued IDs must be checked at any event where alcohol is consumed or sold. Remember: there isn’t a good excuse for a group of adults to allow a minor to obtain alcohol at the event, whether the host was aware of it or not.

In the next section, we will take a look at some important choices to be made prior to serving alcohol at an organization’s next fundraiser or social gathering.

STEP #1: UNDERSTAND STATE LAWS CONCERNING SOCIAL HOST LIABILITY

By having a basic understanding of social host liability laws, you’ll have a pretty clear understanding of what your options are. Check out your state’s Social Host Liability Laws here (see page 44 – column one ONLY). The University of North Carolina has listed social host liability laws by state so that you will have an immediate understanding as to what responsibilities are expected of hosts.

State laws fall into one of two categories: hosts are forbidden from serving intoxicated people or the host is not subjected to any liability at all. Make sure you know which category your state falls into and begin planning from there.

STEP #2: DECIDE IF THE ORGANIZATION WILL SELL ALCOHOL OR OFFER IT COMPLIMENTARY TO GUESTS

Selling Alcohol

Once you start selling alcohol in exchange for cash at a fundraiser, you become subject to alcohol sales laws as set forth by your state and federal government restrictions. This usually involves purchasing a temporary liquor license, receiving state-mandated training, and an initial purchase to stock the bar with liquor, mixers, beer, and wine. It would also be wise to consult a lawyer to help you navigate the intricate legalities. This cost is far too great to justify for most organizations.

Complimentary Consumption

As stated above, you may be liable for serving alcohol to visibly intoxicated participants, even as limited, complimentary offerings. For example, many all-volunteer fundraisers will offer guests a self-serve wine table. Since your organization is responsible for self-serve consumption, that means your event hosts will need to have a volunteer or member from the organization to act as the “server,” by actively checking IDs and looking for signs of intoxication in party-goers. It’s imperative that these volunteers do not consume any alcohol themselves.

Next, a strategy to prevent unsavory actions at your event, in the future, or in the courtroom will be discussed.

STEP #3: SEGMENT YOURSELF FROM SOCIAL HOST LIABILITY

The problem with selling alcohol or giving it away is that the liability of serving alcohol is typically placed on the shoulders of the nonprofit organization. One could argue that this is a type of business, in particular, that cannot open itself up to the stress and cost of defense litigation. Therefore, the next logical solution in creating a balance is to place legal “barriers” between the organization and the consumer.

This is achieved by employing tactics that will allow guests to enjoy themselves while the organization feels protected. The barriers put into place will be determined by considering the organization’s adversity to risk, the local community, and the budget available. Consider discussing this at your next board or executive committee meeting.

Here are a few ideas that may help a nonprofit feel like there are a few controls in place that ensures people are safe while having a lot of fun raising money:

Passively Limiting Consumption

There are a number of ways that politely let patrons know that it is okay to drink alcohol responsibly, such as offering a few “drink tickets” to each participant. One ticket is redeemable for one drink. You can also limit the hard stuff to beer and wine: no liquor.

Use Bar Hosting Services

Pass the liability buck by hiring a bar to host the event. As a licensed bar, they assume responsibility of all alcohol sales and liabilities. Hint: some bars will even donate a portion of sales to your event.

As you can see, there are a number of ways to navigate the legalities of organizing a safe, fun event for everyone involved. Remember: when in doubt, consult an attorney – they have your best interest at heart. Happy fundraising!

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