Loan or rental of YMCA Vehicles

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The desire to be a good, cooperative neighbor, especially to other non-profit organizations, is an admirable part of YMCA culture. This generosity causes Ys to receive numerous requests to borrow or rent their vehicles which results in our receiving frequent questions about proper protocols and procedures for loaning or renting of vehicles to other entities. Sadly, none exist that adequately protect the YMCA…the practice of loaning is imprudent at best and inadequate control of the borrower’s actions may make it negligent. Renting may violate local laws or the Y’s non-profit charter.

Loaning a vehicle entails relinquishing control while retaining responsibility…never a truly wise decision. Car rental agencies make it work by using waivers and transfer mechanisms, but those are beyond most YMCA’s expertise and comfort range. The receipt of money actually complicates the situation because the revenues received need to be reported as taxable income separate from program income to prevent a violation of the non-profit charter. Other complications that may arise include specific business licenses and permits for entities that rent motor vehicles, collection and remittance of sales tax, and insurance coverage problems because the auto garage coverage form normally used for rental of vehicles is not used.

Appropriate use of motor vehicles is a complex issue. With a rented or loaned vehicle the YMCA usually has neither knowledge nor control of the primary factors that lead to vehicular negligence: specifically, inadequate driver age or credentials and insufficient or unacceptable driver experience. They also do not have significant input or control of destination, route, or passenger supervision, which are major factors in accidents involving youth transportation. Without proper behavioral and seatbelt controls passenger number, placement, and actions can greatly affect both the probability of an accident and the severity of loss. Thus, the extent and quality of the other entity’s training and the supervision of and subsequent action or inaction they provide can greatly affect both the YMCA's reputation and financial security.

Because of vehicle markings, any discourteous driving will be attributed to the YMCA. If there is an incident, the vehicle seen on the evening news will clearly be the YMCA's; the fact that it was neither a YMCA excursion nor driver may not be quite so clear. If those who are transported in the vehicle are harmed by a mechanical problem you may be liable to them. Any damage or injury arising out of the vehicle's use is the YMCA's responsibility even if done by an organization with its own insurance. That insurance will not activate until the YMCA's is depleted and will come into force then only if hired and/or non-owned coverage (depending on whether a use-charge was made) was purchased by the entity borrowing the vehicle.

The loan of a vehicle with driver may avoid many of the above pitfalls but requires the YMCA to donate vehicle use and employee payroll to the other entity, as any reimbursement creates a hired-car scenario. It may also confuse and complicate the insurance issue.

The best protocol regarding loaning or renting of your vehicles to others is JUST SAY NO!

Please call us at 800-463-8546 to discuss this or any other risk management safety tip, or visit our web site at www.redwoodsgroup.com to learn more about YMCA risk management issues.

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