Filing Public Records Requests Against North Carolina Non-Profits

The following post was written by guest blogger and CLBC student Garin Scollan (JD ’14).

You may download a digital copy of this guide.

Under N.C. Gen. Stat. § 132-1(b), “the public records and public information compiled by the agencies of North Carolina government or its subdivisions are the property of the people. Therefore, it is the policy of this State that the people may obtain copies of their public records and public information free or at minimal cost unless otherwise specifically provided by law.” The term “public record” is defined as “all documents, papers, letters, maps, books, photographs, films, sound recordings, magnetic or other tapes, electronic data-processing records, artifacts, or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina government or its subdivisions.” N.C. Gen. Stat. Ann. § 132(1)(a) (2012).

So while an organization may be a non-profit corporation, in some cases it can be considered an agency of the government for purposes of North Carolina’s public records statute. News & Observer Pub. Co. v. Wake Cnty. Hosp. Sys., Inc., 55 N.C. App. 1, 11 (1981). News & Observer Pub. Co. v. Wake Cnty. Hosp. Sys., Inc. ruled that the nature of the relationship between a non-profit corporation and the County determines if the non-profit corporation is an “agency of North Carolina government.” To prove the County exercises supervisory responsibilities and control, you should look to the non-profit corporation’s Articles of Incorporation and Lease. The Articles of Incorporation are available at the North Carolina Secretary of State website. The Lease is recorded at the County Records Office.

Once you determine that a non-profit corporation or any other entity you want public records from is an agency of the government, you must follow steps to request the public records:

  • Step 1: Send the “custodian” a public records request in the form of a letter. This letter must state how you would like to receive the public records, either by mail or electronically. The letter should also define what records you are actually requesting, rather than just asking for all the records concerning a certain matter. For example, a request could ask for “any and all written communications in any form, including all notes and log entries.”
  • Step 2: If the records request is denied, ask the custodian why it was denied.
  • Step 3: If the custodian is relying on an exemption, ask her to release the nonexempt portions of the record with the exempt portions removed or redacted.
  • Step 4: File a civil action against the agency to compel disclosure. These actions are given priority. “However, in order for the court to have jurisdiction to issue an order compelling the production of public records, the requesting party must initiate mediation of the dispute through the court. See N.C. Gen. Stat 132-9(a); see also N.C. Gen. Stat. 7A-38.3E9(b).


The custodian of the records is the official in charge of an office that holds the public records. When you make a public records request, your letter should be sent to a person in charge of maintaining the public records and the City Clerk’s office. You can Google who the City Clerk is for the County you are making the public records request in.

For more information on making a public records request, visit the following websites:

Posted by Casey Crowley

Nonprofit Essentials – Budget & Financing

It was a pleasure seeing everyone again for the Budget & Financing session of the Nonprofit Essentials series. As we discussed during the session, I have included electronic versions of several documents and links to resources below.

  1. The Powerpoint presentation is electronically accessible. Note that the slides we skipped due to time constraints have been included.
  2. An electronic copy of the financial ratio analysis exercise we did is available.  Recall that standalone ratios are most useful when appropriate sector comparisons are made. Guidestar is a great resource for finding 501(c)(3) organizations’ Form 990 financial data.
  3. We skipped over the business model portion of the presentation, but I think it’s a very useful tool. Steve Blank’s Business Model Canvas can be found online, along with my transcription of the text portions of that document.  Blank’s website, Business Model Generation, is also worth a visit; it includes a good video about applying the Business Model Canvas.
  4. In passing, I referenced a Stanford Social Innovation Review article called 10 Nonprofit Funding Models. The article goes into detail about the basic templates for revenue generation in nonprofits, and is an interesting read.
  5. Lastly, here is a link to Dan Palotta’s TED Talk, The Way We Think About Charity is Dead Wrong. The talk raises interesting questions about the scale and nature of spending in charitable organizations, including the overhead issue we discussed.

Posted by Casey Crowley

Essentials of Business for Nonprofits – Budgeting and Finance

Thanks to all who attended the Essentials of Business for Nonprofits – Budgeting and Finance session on October 17, 2013 at the Wake Forest Charlotte Center. A couple of quick notes:

  1. The Powerpoint slides are available online.
  2. The financial ratio analysis exercise can also be found online, for those that did not pick up a copy. Additional useful resources on nonprofit financial ratio analysis are available from the Nonprofits Assistance Fund. Especially useful are a) a list of common ratios and b) an Excel spreadsheet for calculating them.
  3. Since business models are covered in another segment of the program, we did not cover them in detail. However, I did reference a Stanford Social Innovation Review article called 10 Nonprofit Funding Models that I wanted to provide a link to.
  4. Lastly, I mentioned the Community Law & Business Clinic, a legal clinic at Wake Forest School of Law that offers pro bono work for–among others–nonprofit organizations. Several people asked for more information on areas of practice and how to apply, all of which can be found at the CLBC website.

We look forward to seeing you at the next session.

Posted by Casey Crowley

Simple Contracts for Small Businesses

I recently led a workshop in Winston Salem on how micro and small businesses should think about and use contracts. This is an important issue for a business, and a clear understanding of when contracts can best be used to secure a business relationship is important for the business’ long-term growth. Here are some of the points from the workshop:

Contracts come in many forms and with many names, but in the end, they are agreements between parties that promise one party will do something and the other will do something else in exchange. Parties to a contract are generally looking to the future to assure an act will occur and they build their expectations around the performance of this act. Because a business is always looking to the future, contracts play a significant role in just about everything the business does.

1. Understand the stage your business is in. A business will move along a series of several stages during its life. It may seek to have more or less formal agreements with other parties depending on where a business finds itself along this continuum. Generally, the continuum can be described to several stages from existence to maturity. (See Churchill and Lewis, The Five Stages of Small Business Growth). At the start when the business first comes into existence, business owners face the challenge of balancing their need for certainty in relationships against the need to move forward as quickly as possible. It is important at this point for the owner to identify those relationships that will be most important to the business’s launch and early growth, this includes things like the partnership agreement, non-disclosure agreements, employment agreements with key people and supplier agreements. While careful thought should be put into all contractual relationships, these early agreements should rise to the top of the list.

As the business grows, new relationships emerge that will look different from those faced earlier. For example, a business owner may find that one client or customer accounts for a large amount of revenue, in fact, so much revenue that the health of the business is linked to this client relationship. The owner will want to consider how to formalize the relationship for the future, perhaps through a long-term agreement. Similarly, as the business grows and takes on new partners, existing agreements should be reviewed and revised.

In the end, the contracts that are needed for a business will depend in part on the stage the business is in.

2. Know what you want from any contract. Contracts memorialize relationships between people, but they are not the only mechanism for doing this. If the business owner wants a formal relationship that may be enforced by a court in a proceeding, then a contract will be useful. But this is not always what is wanted. I often tell my students of the client who was a church and who wanted to rent a space to a nonprofit food pantry. The pastor came to me with a lease he had been given by a member of the parish. The lease contained three pages of detail on defaults and remedies, including clauses on punitive damages and shifting of attorney’s fees. While the lease reflected a bundle of legal rights that would be available following a default by the food pantry, the church really did not want to sue the people who were trying to feed the poor or exact punitive damages following a breach. After some thought, the lease was reduced to one simply page that better reflected the relationship between the parties and the values of the church and its members.

3. Use standard form contracts for standard things. Many, perhaps most, businesses regularly work in a few areas. Think of a general contractor who works with homeowners. The contractor will spend most days pricing bids and preparing work contracts that reflect the work to be done. This involves a standard range of work, price and time. As such, it is easy to use a standard form contract that is edited for each customer to include work, price and time.
While form contracts are good at saving time and effort, it is important to keep in mind that they have been prepared with a set type of work in mind from the start. A formwork contract for a general contractor doing home remodeling will contain provisions that will not make sense for a business consultant working with farmers. Moreover, a form contract works as a whole, any changes or edits may have unintended consequences.

When developing and using form contracts the business owner should remember to use the appropriate form for the particular matter. A lawyer can add tremendous value to a business by developing form contracts that are tailored to the business’ needs.

4. Think about how you will enforce a contract. While contracts may create rights for a party, these rights will still need to be enforced, which may mean filing a lawsuit. The costs of litigation can be very high, in both financial and personal terms. Some lawyers advise clients that litigation is not worth pursuing if the controversy involves less than $75-100,000. In addition, the time spent on discovery and other trial matters is time taken from the business, as well as stress created for the owner and the owner’s family.

As a party to a contract, the business owner should always consider how to address failure or breach on the other party’s part. To do so, the business owner may want to decide early on whether there are informal enforcement methods that will be useful. Such methods include mediation or other non-litigation approaches, but also include referral networks for clients/customers and long-term relationships. When litigation is unavoidable, the business owner will want to assure that all contracts contain provisions that reduce the burden of going to court. Typically, these provisions will include choice of law, choice of venue and fee shifting provisions. In some cases, such as a nondisclosure agreement, provisions allowing for injunctive relief may be included.

In the end, contracts provide a business owner with a degree of certainty about the future. The business owner, however, must be sure to work with contracts that are crafted to the needs of their business and to recognize that types of contracts and value of the relationships they memorialize will grow and develop over time.

Posted by Steve Virgil

Nonprofit Essentials – Governance Slides

Participants in the NPE class for September 24, 2013 can find the Powerpoint slides here:

- Part 1 – Introduction and Board Governance
- Part 2 – Governance Best Practices

During the session, several people asked about the role of high-income executives in the nonprofit sector. The TED talk that was referenced during our discussion is called The way we think about charity is dead wrong, presented by Dan Pallotta.

Thanks to everyone who attended; we look forward to seeing you at the next session.

Posted by Casey Crowley

CLBC Holding Community Outreach Hours this Fall

The Community Law & Business Clinic, in conjunction with community partners, is holding regularly-scheduled sessions in the community. Meetings are structured as client interviews, where potential clients can meet with a law student, learn more about the services of the CLBC, discuss their business or nonprofit, and ask questions.

Typical questions can include:
- what type of entity to form – along with tax and filing implications
- how to protect IP, including trademark, trade secrets and copyright
- how to protect equity
- contract formation and partnership agreements
- employment issues, including use of contractors and 1099 employees
- liability and risk management
- Transfer of ownership and selling a business
- other issues that arise

Following the initial meeting, law students will meet with Prof. Virgil to discuss the matter and decide whether the Clinic will take the engagement. Legal advice will not be given to the client during the meeting, but the client will hear from us on how we will proceed within 3 business days. All information gathered during the meeting will be kept as confidential.

Hours will be held at the following locations and times:

SG Atkins CDC, Thursdays from 10am-noon
Dates: 9/12, 9/19, 9/26, 10/3, 10/17, 10/24

Wake Forest University’s Reynolda Hall, Fridays from 10am-noon
Dates: 9/13, 9/20, 9/27, 10/4, 10/18, 10/25

Winston-Salem Urban League’s Quality of Life Institute, Fridays from 2-4pm
Dates: 9/13, 9/20, 9/27, 10/4, 10/18, 10/25

Posted by Casey Crowley

Community Law & Business Clinic Starts 2013-2014 Year

The Community Law & Business Clinic has started the 2013-2014 academic year with a new cohort of students and clients. This week, 19 students from the Wake Forest University School of Law and Schools of Business started working with Clinic clients. During the fall 2013 semester more than 50 clients will be assisted through the Clinic, representing some 3,700 hours and over a half million dollars of pro bono professional assistance to clients.

Since the Clinic’s founding in January 2009, more than 57,000 hours of pro bono legal assistance has been delivered to more than 800 clients in our community and the region.

Clients are drawn from small business owners, nonprofit agencies and families facing legal consumer law issues. Clinic clients receive targeted services that assist with building businesses, developing nonprofit endeavors and protecting assets.

New for this semester, the Community Law & Business Clinic has launched a practice area focused on Arts & Entertainment Law. Winston-Salem is known for its involvement in and commitment to the arts, which it has incorporated into a broad-based economic development effort. Any visitor to Trade Street will see concrete examples of these efforts. In our new Arts & Entertainment practice area, nonprofit arts organizations, artists and entertainers can receive assistance with legal and business development questions as they start or grow their businesses. Look for more on the Arts & Entertainment Law practice group in future posts and on our website.

The start of the academic year is a continuation—and extension—the Community Law & Business Clinic’s intentional engagement with the community. We look forward to a great year that benefits both our students and the community.

Posted by Steve Virgil

Good Governance Leads to Great Organizations

Good governance leads to great organizations. Whether for-profit or nonprofit, organizations require efficient and effective governing boards to accomplish mission. In the nonprofit context, boards play several distinct roles. It is the board that is responsible for assuring that the organization serves its charitable purpose. It does this by defining a long-term plan, stating a course of action around that plan and holding the executive and staff, and itself, accountable. The nonprofit board is also responsible for allocating resources, which implies that the board has a deep appreciation of the nonprofit’s financial condition, income and expenses. And for many nonprofit organizations, board members are crucial to accomplishing the organization’s work. In many cases, nonprofit board members commit significant volunteer hours to the organization outside of the time spent with governance and board duties.

Too often, organizations fail to take the time to develop a solid understanding of board duties and roles. For many nonprofits the board role is not well defined, and bleeds across the line between governance to operations. In other instances board members see their role as volunteer service for a few hours a month, without an understanding of the duties board members have as they serve on a nonprofit board. The results are predictable: board meetings that are organized around ‘reporting’ from key staff with little time for, or interest in, deliberation leading to decisions that are then implemented by the staff.

As part of the Community Law Clinic’s ongoing work with nonprofit organizations, I presented a one-day workshop for nonprofit leaders in Charlotte on August 22, 2013. The first in the Wake Forest University Charlotte Center’s “Essentials of Business for Nonprofit Leaders” series, the workshop explored the role of governance in building organizational strength for impact.

The presentation was divided into two parts. View the presentation slides: Part I, Part II

Posted by Steve Virgil

Paperless Legal Clinic

Clinical programs have become such an integral part of so many law schools that it’s easy to forget that, at its core, a law clinic is essentially a standalone law firm. It’s no surprise, then, that clinics face similar challenges. Among them is electronic case and document management.

Additional challenges in a clinical setting are the 100% turnover every few months, and the fact that law students have other stuff to do. Having a hard copy document in the office is useless to a student writing a memo in the evening at home.

Enter the paperless (well, low-paper) legal clinic.

The three main components:

  1. Clio. All of the clinics at WFU School of Law use Clio, an online case management software. While it takes some legwork to restrict student access to certain cases, it is accessible from anywhere, and is actually pretty user-friendly.
  2. Fujitsu ScanSnap s1500 scanner. It’s fast, doesn’t jam and creates readable PDFs that can be uploaded straight into Clio. While the integration platform is relatively basic, it works fine…and the convenience factor makes this a no-brainer. Update: the Clinic has added additional scanning capacity in the form of a Fujitsu ScanSnap iX500.
  3. A robust document security and archiving plan. The crux of the system described herein is implementing good document security practices in the office. For a paperless setup, this includes logging out of Clio, keeping all documents and drafts on Clio (instead of on one’s local hard drive), choosing good passwords, proper scanning and naming of files, etc.

Two shortcomings of Clio hinder this paperless office setup. The first is the inability to search within documents once they have been uploaded to the Clio database. For a single matter, it’s not a huge deal (although it does render searchable PDF files way less useful), since you are generally familiar with the matter. For archiving purposes, however, it is a not inconsiderable problem. Force majeure language from a two-year-old contract can be a valuable time-saver. If you can find it.

The second Clio shortcoming is the inability to batch download files from a matter. While it seems like a minor quibble, it is in fact quite frustrating to archive a legal matter One. File. At. A. Time. And, for reasons already stated, archiving is essential. Plus, when and if Clio is phased out, having an archive can mean the difference between a smooth transition and a total, unmitigated disaster.

Are there other ways to do this? Absolutely. Better ways? Perhaps. But for the CLBC (and other law clinics trying to go paperless), this setup definitely checks all the boxes.

Posted by Casey Crowley

Community Law & Business Clinic offers capacity-building programs for nonprofits in Charlotte and Winston-Salem

The Community Law Clinic will once again offer capacity building programs for nonprofit organizations during the 2013-2014 academic year. The Essentials of Business for Nonprofit Organizations program, offered in Charlotte, provides nonprofit leaders with targeted seminars on key issues facing today’s nonprofits. More details and registration information for the Essentials of Business for Nonprofit Organizations are available.

The Nonprofit Essentials program, offered in Winston-Salem, also provides nonprofit leaders with seminars on vital aspects of operating successful nonprofits. Details and registration information for the Winston-Salem sessions are available.

Both series include courses on board governance, human resources, strategic planning, fund development and program evaluation. Courses are taught in a seminar format over an afternoon and are designed to provide participants with core skills during a 3-hour session.

The nonprofit sector plays a vital role in establishing and maintaining our quality of life. Through the Essentials of Business for Nonprofit Leaders and Nonprofit Essentials Programs, the Community Law Clinic strives to add the resources of Wake Forest University to the missions of the many organizations that make our community a better place to live.

Posted by Steve Virgil