Is your nonprofit a dram shop?

Today we are celebrating the Jewish holiday of Purim, a celebration that is mostly associated with dressing up in costumes, but which in some circles leads to quite a bit of drinking.  Therefore, I think today presents a timely opportunity to touch on some issues that can arise when nonprofits (e.g. synagogues) decide to either serve alcohol or allow it to be brought in and consumed on-site.

  • “Dram Shop” Liability:  The server of alcohol may in some circumstances be held liable for damages if a visibly intoxicated drinker goes out and hurts himself or someone else.  Not applicable everywhere.
  • Providing Alcohol to Minors:  While it may be tempting to say that a tiny drink is OK “just this once” for a celebration, it is illegal and can result in liability under certain conditions.
  • Liquor License:  In Pennsylvania, various types of nonprofits can obtain multi-day special occasion permits once annually in order to serve alcohol at fundraisers or similar events.
  • Space Rental:  When renting out space for wedding receptions or other events at which alcohol will be served, nonprofits should manage risks by, for example, requiring the renters to use bartenders rather than setting out bottles for self-service.  It is a good idea to consult a lawyer to ensure that the language in the contract protects the nonprofit from renters’ actions as much as possible.
  • Insurance:  Planning a special event can be fun and exciting, so it’s easy to get carried away and forget about less interesting things, like reviewing the nonprofit’s insurance policy to rule out any prohibitions against serving alcohol.  You don’t want to wait until you’ve already had an incident to find out that you aren’t covered.

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Please note:  This blog is intended as general educational information only, and should not be considered legal advice or a substitute for consulting a lawyer.