How to handle liability in organizing a charity music festival.
November 30, 2010 1:07 PM   Subscribe

I'm organizing a local music festival. Although the proceeds are all to be donated to local charities, I will probably end up taking in large amounts of money in the range of a few thousand dollars and arranging sponsorships through local businesses. What is the cheapest and easiest way to limit my personal liability in the event that complications arise?

I've considered organizing an incorporated nonprofit (501(3)(3)) for the purposes of limiting my liability but that seems needlessly complicated and I can't afford to hire a lawyer to help me file with the IRS and local tax agencies. Also, because I'm not going to keep any of the money the festival generates as income, the matter of being tax exempt should be superfluous; even the bands I'm in that are playing are doing it pro bono. All the money the festival takes in will be used to compensate the venues, any touring bands we book, and the rest of the proceeds donated to local charities.

All I really want to know is what would be the best way to limit my liability so in the event that a sponsor, or perhaps one of the venues we use has some dispute I won't be held personally responsible. I'm fairly confident that no such complications will arise but I figure it's better safe than sorry, and also I feel most local businesses and venues would be more inclined to do business with the festival through an incorporated presence, rather than an individual.

Any suggestions?
posted by magnificent frigatebird to Media & Arts (3 answers total)
 
Get insurance - that may not help you with contractual liabilities, but if someone gets hurt at the festival, you're going to be named in the lawsuit as the organizer. You may be able to get a rider on your current homeowners policy.

Also, by not being a 501(c)(3) your donors won't get the ability to deduct their donations. Can you align yourself with a local charity?
posted by Sukey Says at 1:21 PM on November 30, 2010


Someone who is organizing a one-off event would do better to have it sponsored by an existing 501(c)(3), then buy insurance to cover the risk.
posted by yclipse at 3:36 PM on November 30, 2010


1. Meet with the local government -- mayor's office, commissioner, etc. and ask what they suggest.

and/or

2. Buy an hour of time with a lawyer to go over your potential liabilities and how best to avoid them in your specific circumstances
posted by freshwater at 7:09 PM on November 30, 2010


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