State laws generally provide some protection for directors, employees, and volunteers against liability. One type of law includes volunteer protection statutes, which limit liability that may be incurred by volunteers of a nonprofit entity. Congress also enacted the Volunteer Protection Act of 1997 to provide additional protection. However, several commentators have noted that these statutes have largely failed in their purpose because the statutes generally do not prohibit lawsuits against volunteers but rather merely limit liability in some circumstances.
Other state laws limit liability for directors and officers of nonprofit organizations. These laws restrict the amount that someone can recover for damages stemming from the activities of an officer or director of a nonprofit entity. Much like volunteer protection acts, however, commentators often note that these statutes that limit liability are fairly weak.