Best Practices: Legal Concerns (Part 2)

Today’s post is by Dallas Rising of Small Dog Rescue of Minnesota and Jennifer Misfeldt of MidAmerica Boston Terrier Rescue. It covers more legal concerns of a rescue organization.

b. Adoption contracts

i. Standard language
ii. Important information to include
iii. Return policy

c. Taking donations

d. Disclosures

i. To potential adopters
ii. To volunteers
iii. To donors

First, here’s what Dallas has to say:

1. Legal concerns

Unfortunately, animals are considered property in the eyes of the law, not individuals deserving their own rights. So, whether or not you decide to incorporate your rescue, you will need to take the law into consideration.

I strongly recommend purchasing liability insurance for your rescue, so if a dog bites or a volunteer is injured or you are sued, you have some basic coverage. Consult a lawyer or trusted insurance agency for guidance on a plan that will suit you best.

It’s also a good idea to make sure that any dog coming into your rescue has been reported to local animal control agencies and been available for reclaiming for the minimum number of days required by law. This will also vary by region, so make sure you do your homework. Once you know a dog is clear to legally come into rescue, it’s a good idea to keep documents of where each dog came from, just in case there is a discrepancy in the future. It’s a lot less painful to be organized and take a little extra time and care on the front end than it is to sort out a legal headache later. Better safe than sorry. Your job is to save animals, and if you get lazy or sloppy and end up getting sued or prosecuted or audited, you will not only be kicking yourself, but you will be tangled in an ugly mess that will make it a lot harder for you to fulfill your rescue’s mission. The legal end of things is critical, and if you’re not ready to take the responsibility, you may want to just sick with volunteering for another local rescue or seeing if you can piggyback on an already established rescue and simply have a chapter, which would require less paperwork.

Get a legal advisor. This person should have knowledge of non-profit law if you’re a non-profit, as well as law pertaining to animals in your state. This person should be able to read contracts before you sign them, review waiver forms before events and for all volunteers, as well as connect you with a reputable person regarding any kind of taxes or financial guidance you may need.

Our rescue has a legally binding contract we have every foster home sign, acknowledging that our rescue won’t be held liable for damage a dog does to any person or their home, that the dog is legally in SDR’s care and makes final decisions regarding that dog’s future, and that any rescue property will be returned in good condition when that person no longer wishes to or is dismissed from volunteering with our rescue. We want them to have insurance of their own as well. We do criminal background checks on every person who would be alone with a dog at any point and they have to have a satisfactory record in order to qualify to volunteer with us. We have waiver forms for minors who want to volunteer. It’s all basic, but again, it is a lot better to have all of these expectations laid out up front and get everything signed so your rescue is protected in the long run. It’s also helpful to refer to the contract during any disputes. All contracts should be scanned and filed electronically as well as hard copy records be kept, generally the BOD secretary would be responsible for this.

b. Adoption contracts

In terms of adoption contracts, it’s important to lay out expectations for care and treatment of the dog. Always make sure you include that the rescue has a right to visit and check up at any point and to reclaim the dog if the rescue determines the dog is not being cared for to the contract’s standards. It’s important that those standards be measurable. “Adopter promises to love the dog” is not measurable. “Adopter agrees to yearly vet check ups, providing adequate nutrition, water, shelter, and exercise” is a bit better. We also require adopters to agree to never leave the dog unattended outside of the home (in the yard, in a car, tied outside of a store) and many cat rescues require that cats be indoor only and that the adopter never declaw the cat. It is standard to require that the animal come back to your rescue if the adopter is not going to fulfill their lifetime commitment to the animal. However, we have recently started having people explain what would happen if they outlive the animal, and the agreed upon plan at time of adoption would be an exemption from that rule. We do ask adopters to make their families aware of the requirement to return the dog to our rescue should the plan not be executable.

Our return policy is that if the adopter wants to return the dog within one week of adoption, we return all but $100 of the adoption fee. After that, there will be no money returned to the adopter.

Oh, and it’s a major bummer, but adoption fees are viewed as animal sales in the eye of the IRS. We explain that while we are philosophically and morally opposed to treating animals as property to be bought and sold, we have to comply with the law and charge sales tax. Sales tax is determined based on where the adopter lives, not where the rescue is based, so it will change from adoption to adoption. It’s important that clear and accurate records are kept on this in case of an audit.

c. Taking donations

In terms of taking donations, if you are a non-profit, you will need to generate an annual financial report when you file taxes. Always shoot for at least 94% of revenue to be spent on programs. Using Quickbooks is a great way to keep track of all of that. Make sure your donors get acknowledgements for their taxes as well. Make sure you know the laws about raffles or other fundraisers in your area. depending on what you do, it may require a license, so be smart and, again, do your homework.

d. Disclosures

You can never be too transparent when it comes to what you disclose to adopters, volunteers, and donors. With adopters and volunteers, it never pays to be misleading because it increases the likelihood of a dog being returned or a volunteer quitting and leaving you with an emergency or a mess to deal with. So, be direct and upfront from the beginning. If it’s not a good match, it’s better to let it go.

With donors, it’s important to be transparent to gain their trust and loyalty. Would you rather give your money to an organization that is clear about exactly where your donation goes and how they operate, or one that just absorbs your money and you’re not quite sure how much of it went to the animals and how much of it went to other overhead? earn the trust of your donors. You can’t survive without them.

Here’s Jennifer’s Feedback:

1.   Legal concerns

It is very important that you have documentation for all processes and procedures with every aspect of the organization from volunteers, foster parents and adoptors.

Some organization will hire legal help while others may reach out asking for advice from other groups.  Either way, as long as it gets done, how is up to you.  It is all about protecting yourself and the organization

b.   Adoption contracts

  • i.    Some Standard language
    • 1.   I fully and completely release (Organization Name) and its agents/volunteers harmless from any claim, cause or demand as a result of my adoption, ownership, care, maintenance or retention of the dog.
    • 2.   By signing below, I acknowledge that I have read and fully understand the terms and conditions of the adoption agreement and accept this document as a contractual agreement, which I will comply with.
  • ii.    Important information to include
    • 1.   The care the owner is responsible for once the adoption is finalized
    • 2.   Fencing requirement/leash requirements
    • 3.   Licensing/Identification tags
    • 4.   Reporting dogs that are lost or stolen
    • 5.   Notifying the microchip company and the Rescue Organization of new contact information
    • 6.   Liability waiver once the adoption is finalized
    • 7.   Giving the dog adequate time to adjust
    • 8.   Rules around leaving the dog outside while unattended
    • 9.   Listing special requirements and information about the adopted dog
    • 10. Listing what medical treatment the dog has received in the care of the rescue organization.
    • 11.Additional information: there should always be room for the foster parent of the dog to write in special instructions about the dog that are important for an adoptor to be aware of (i.e. not completely potty trained, had luxatting patella repair, had an eye removed, has allergies and requires medication, on-going medical care required, etc.)
  • iii.    Return policy
    • 1.   A reputable rescue will always require that a dog they adopted out be returned to the organization should the adoption not be satisfactory with the adoption or the adoptor can no longer care for the dog.
    • 2.   Make sure to address the refund, if one exist, of the adoption fee in association to a return.
    • 3.   Verbiage Example
      • i. “ If for any reason, the adoption is not found to be satisfactory for the dog and/or the ADOPTER, the dog must be returned to (Organization Name).
      • ii.    “Not sell, abandon, or give the dog away to anyone else. If the owners can no longer keep the dog (Organization Name) must contacted.”

c.    Taking donations

i.    It is important for the public to be made aware that a ‘tax deductible’ donation is one that is made to the Organization and the donor receives nothing in return.

  • 1.   For example the following are not eligible for a tax deduction:
    • a.    Adoption Fees
    • b.   Purchase of raffle tickets/chances
    • c.    Auction items
      • 2.   Examples of items that are eligible
  • a.    Donation of an items (used or new) of which the value of the item is eligible
  • b.   Gift certificate for the value amount
  • c.    Monetary donation
  • d.    Gas value when transporting a dog

ii.    Donations should not be turned down.

  • 1.   If you come across a donation that you know you cannot use accept it and donate it to another group.
  • 2.   People and companies are turned off when they are offering you something for free and you deny it.  Next the item may be just what you needed.

iii.    Donation Receipts

  • 1.   Everyone appreciates a receipt confirming their donation
    • 2.   Make sure to include the following on the receipt:
      • a.    Description and name of the donated item or dollar amount
        • i.    If it is a item that is being donated leave a blank line for the donor to fill in the market value.
      • b.   Write what the donation is going to be used for or towards
      • c.    Rescue Organization contact information and ENI number.
      • d.    Foster Disclosures

i.    Foster parents should be required to complete a foster application that includes the foster’s responsibility as well as the organization’s responsibilities.

  • 1.   Items to address:
    • a.    Food supply
    • b.   Crate/bedding
    • c.    Transport/gas to and from the vet
    • d.    Medical cost (reimbursement or organization pays the vet directly)
    • e.    Training requirements that the foster parent is to conduct
    • f.     Emergency plan
    • g.    Vacations/time off
    • h.   Other supplies: grooming, toys, belly bands/diapers, harness/collar, leash
  • 2.   Liability with foster parents
    • a.    Lost or stolen
    • b.   Death of the pet
    • c.    Attacks and bites of personal dogs and people
    • d.    Inspections of the foster home
    • e.    Termination on what grounds
  • 3.   How to handle an adoption of a foster parent adopting a foster dog

ii.    Disclosure verbiage

1.   “This Agreement is made and entered into on (DATE) by and between (Organization Name) and the following individuals(s) (Foster Parent Names), (hereinafter “Foster”).

2.   For each line item one may want to consider the foster parent initial so that they have read each bullet that is asked of them with a clear understanding of the responsibilities of a foster.

e.    Owner Surrenders Disclosures

i.    It is important that the owner(s) are aware of the rescue organization’s rehoming program as well as their evaluation process.

  • 1.   Items to on a surrender form:
  • a.    Validation that the person surrendering the dog is the legal guardian of the animal
  • b.   That contact information the current owner surrendering and the new adopting family will not be shared among one another.
  • c.    Notification by the current owner if they want to be informed if you find the dog unadoptable and/or plan to euthanize the animal.
  • d.    Statement that the current owners have fully informed the organization that all known or suspected problems and concerns about this animal are disclosed.   Medical cost (reimbursement or organization pays the vet directly)

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6 Responses to Best Practices: Legal Concerns (Part 2)

  1. Kristine says:

    After many years of working in non-profit, I don’t think the importance of donor relationships can be stressed enough. Find as many ways to publicly thank people as possible. The effort is amazingly well worth it. You just never know who will leave a little something in their will.

  2. I agree – however, some people do not want to be publicly recognized, so it’s nice to be able to figure out which camp your donors fall into. We have several donors who wish to remain anonymous. You don’t want to inadvertently upset a donor when trying to recognize them.

  3. I’m in charge of Events and Fundraising for HBHR. I send out a Newsletter every quarter telling everyone I can how many adoptions we’ve done that quarter and since the first of the year. The only time I recognize a specific person for a donation is when it’s a child – we’ve had two in the past year that requested donations to us in lieu of gifts to them.
    I also disclose how much money we raise at each fund raiser, all the upcoming events, etc.

  4. I forwarded some of the information above to our Treasurer and her response is below:

    The IRS is a federal revenue authority, and does not deal with sales taxes, which are assessed at state and local levels. We are a 501(c)(3) organization, and adoption fees are considered to be program service revenue which is exempt from federal income tax.

    Whether or not an adoption fee is subject to sales tax is determined on a state by state basis. Some states assess sales tax on adoption fees of animals adopted out through non-profit rescue groups, while other states do not. Minnesota adoption fees are subject to sales tax, while in Texas, adoption fees are exempt transactions. If rescue organizations engage in other activities, they may be liable for collecting sales tax depending on the activity. For example, if the organization sells items for fundraising (e.g., cookbooks, dog supplies such as leashes and collars, crates, etc.), those sales are quite likely subject to sales tax. Again, the rules apply on a state by state basis and the laws of each state must be reviewed individually.

    In order to be required to collect sales tax in a state, an organization has to have nexus in that state. For sales tax purposes, nexus requires physical presence. Our organization has no ties in any state other than Texas that would establish nexus and would therefore not be required to collect and remit sales tax in states that do assess tax on adoption fees. The adopter might be subject to use tax, but we have no responsibility.

    Texas does not have a state income tax, so there is no concern with that tax for our organization. For other states with a state income tax, organizations must again review, on a state by state basis, whether the adoption fees are exempt from state income tax. Most states follow the federal 501(c)(3) guidelines, and the adoption fees should be exempt from state income tax; however, there may be exceptions and each group should examine its own state consequences.

    Each state’s department of revenue has a comprehensive website and there is good, reliable, accurate tax information available for non-profits.

  5. Kat says:

    I am wondering if it is legal to “require” that an adopted pet be returned to the rescue if the adopter cannot keep it. If the law says that the animal is property, can’t the adopter give the pet away at a later date? How would the court uphold such a return requirement?
    I’m just curious as a rescue I work with is dealing with this language right now and wondered how others handle this.

  6. Kat, thanks for commenting. So far as I know, there is no state law requiring a person who adopts a dog to return him or her to a rescue. When a person adopts an animal, I believe that animal becomes his or her property (ick – I hate thinking of dogs as property). Having said that, all reputable rescues write into their contracts that dogs are to be returned if the adopter can no longer care for them. If the contract is written carefully, it should be enforceable by law. I know that the rescue I work with just added a blank on the adoption application that asks what people will do if they become unable to care for the dogs they adopt from us. This question really helps us determine people’s ability to care for their dogs, especially when it comes to seniors. What we look for is that a family member or close friend will be committed to the dog. It seems to me that returning a dog to rescue should be the second best choice to rehoming the dog with a responsible close family member or friend who he or she becomes familiar with.

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