Please note: These resources have been prepared by Michigan Community Resources with assistance from pro bono attorneys throughout Michigan as information only and does not constitute legal advice. This information is not intended to create and receipt of the information does not constitute a client-lawyer relationship.
The novel coronavirus (COVID-19) has caused major disruptions in conferences and other in-person events for nonprofits. As of the time of this writing, the Centers for Disease Control (CDC) has promoted a national guidance issued by the White House to avoid gatherings of more than 10 people. On March 23, 2020, Governor Whitmer issued Executive Order 2020-21 to suspend all activities that are not necessary to sustain or protect life.
As a result, nonprofits are weighing important considerations, such as whether to cancel short- to medium-term events and how to navigate relationships with vendors, attendees, and event hosts. The following are FAQs and practical guidance that nonprofits may consider during these challenging times.
AS THE EVENT ATTENDEE
Should I send my employees to an event?
The health of your employees and the containment of the spread of COVID-19 is of paramount importance. With that said, many events have been cancelled in the wake of the spread of COVID-19 and the resulting guidances from national, state, and local authorities. If an event scheduled sometime in April has not been cancelled already, please contact the event host directly for confirmation about the event’s status, as their website and communications may not be current with the latest information. Guidances from the CDC and Michigan are updated regularly.
Should I register for an event?
The CDC has advocated White House guidelines to avoid groups of ten or more people until the end of March and Michigan has enforced temporary suspension of activities until April 13, 2020. Any event scheduled during that time that will exceed this threshold should be avoided. Please follow CDC guidelines for the most up to date policies.
If you decide to register for an event, it is important to check what contingency plans the host organization has in place in the case of cancellation and what their refund policies are. Some organizations are changing their events to virtual meetings conducted online and others are rescheduling for dates later in the year. Your decision may change based on these contingencies and their impact on your schedule and convenience.
Regarding refund policies, you should first contact the event’s host to see what plans they have in place. Please keep in mind that during this time, many event hosts are inundated with requests for more information and may be hard to reach. In the meantime, please check the FAQ section of the event’s website. If there was a registration fee, you may consider checking the terms of the reservation, if available, and look out especially for force majeure clauses, which are explained in further detail at the bottom of this section.
Should I attend an event?
You should avoid any and all events that are not “necessary to sustain or protect life” through April 13, 2020, per Michigan’s Executive Order. COVID-19 is highly contagious and it is important to understand the many ways in which it may be transmitted. Gathering in spaces with a nontrivial level of density increases the risk of potentially spreading the virus.
If you are worried about getting refunds for costs associated with a scheduled event, such as flight or lodging, please refer to each company’s websites as many have instituted generous refund and/or rescheduling policies. For example, reservations made through Airbnb on or before March 14, 2020 for stays and Airbnb Experiences, with a check-in date between March 14, 2020 and April 14, 2020, may be cancelled with a full refund before check-in.
AS THE EVENT HOST
Should I cancel my event?
If you have an event scheduled between now through the end of April, we recommend cancelling or postponing your event. With the uncertainty surrounding the spread of COVID-19 and the constantly changing guidances around large gatherings and travel, it may be better to cancel now than to wait and see what happens. Waiting to cancel an event can make it harder to renegotiate contracts with vendors and more difficult for attendees to change their plans. Providing sufficient time for these parties to make other arrangements is not only beneficial to them, but also gives your organization more time postpone or reimagine the event.
If you do decide to cancel an event, you will most likely need to renegotiate contracts with vendors. While these conversations will differ depending on the details of each event, one of the terms of the agreement that may come up relates to force majeure. Force majeure describes unforeseeable circumstances that prevent a party from fulfilling the terms of a contract. You should first see whether any agreements you have entered with third parties include a force majeure term. A fuller description of force majeure can be found at the bottom of this section.
How do I reschedule an event?
When rescheduling an event, it is important to speak as soon as possible with each stakeholder, such as attendees, sponsors, and vendors, as soon as a decision has been made to reschedule an event. These conversations may require issuing refunds to attendees, negotiating with vendors about postponing the fulfilment of services, and discussing options with event sponsors. There is no one-size-fits all approach to these conversations, each of them will be impacted differently based on the type of event, organization, and stakeholder.
Another important step involves reviewing the insurance policies you have that may be applicable to the event. These may include event cancellation insurance or general business liability insurance. You should speak with your agent and see what outstanding policies you have and which ones may be the best to pursue in the current circumstances.
When should I schedule an event?
Given the uncertainty surrounding COVID-19, there is no clear window of time for when it would be safe to schedule a new event. Any time you are planning on scheduling an event that will host a large number of people, it is important to realize that there is an inherent risk, even without a global pandemic at play.
Therefore, one of the most important actions you can take when scheduling an event in the mid- to long-term is to purchase the right event insurance. Insurance policies are often individually negotiated and will vary from insurer to insurer, so it is important to speak directly with your insurance agent. Please keep in mind that there are multiple types of policies to consider, such as event cancellation insurance, general business liability insurance, and more. For example, event cancellation insurance potentially covers lost revenues, increased expenses, costs to reschedule, and voluntary refunds to participations. However, please pay careful attention to what is covered and what is not covered and make sure to ask specifically if cancellations that may be caused by COVID-19 are included in the coverage.
FORCE MAJEURE: A BRIEF OVERVIEW
With COVID-19 and its far-reaching impact, many parties that had previously entered into contracts are finding themselves unable to perform on their agreed upon responsibilities. In contracts, force majeure clauses allow parties to exit a contract without a penalty when the purpose of the contract has been thwarted by unforeseeable circumstances. These clauses have become especially relevant in light of the current COVID-19 crisis.
There are a number of issues to look for in a force majeure clause related to COVID-19, for both the attendee and the host:
- Does the contract have a special allowance for epidemic/pandemic events or public health emergencies?
- Does the contract list a specific set of circumstances under which force majeure is triggered, or does it state circumstances more broadly?
- Is there a specified threshold that triggers force majeure? For example, the clause may state that force majeure only goes into effect in circumstances where it impossible for 30% to 50% of attendees to attend.
- What are the notice requirements for exercising force majeure? Many contracts give the parties a time window during which notice is required.
If you are the event host and have contracts with vendors, force majeure is an issue that you should be aware of and may potentially encounter. Please make sure to review all your contracts closely and pay attention to this clause and the impact it may have.
For resources on strategically cancelling or postponing your event, please see the resources provided by CharityHowTo.