When the Helpers Become the Vulnerable Ones: Introducing Reverse Fiduciary Risk in Nonprofits

An opinion piece by

Sushil K. Jain

“We speak of fiduciaries protecting organizations, but rarely of organizations protecting the people who hold them up.”

Nonprofits love to celebrate their volunteers — and rightly so. Volunteers are the heartbeat of the sector, the people who show up, pitch in, and keep community organizations alive. But there is a side of volunteerism we rarely talk about, and it’s time we did.

Across Canada, thousands of small nonprofits rely not just on volunteers, but on volunteer directors who quietly perform the work of paid staff. They run offices, manage finances, write grants, clean facilities, organize events, and keep the doors open. They do this without pay, often without reimbursement, and usually without recognition.

And when things go wrong, these same volunteers can find themselves blamed for “mismanagement,” pushed aside by new board members, or left carrying the emotional and financial burden of keeping the organization afloat.

This is more than burnout. It’s a structural problem. And it needs a name.

What Is Reverse Fiduciary Risk?

In nonprofit governance, we usually assume the organization is the vulnerable party and the directors are the ones who must be monitored. But in many small, under resourced nonprofits, the reality is the opposite.

Reverse Fiduciary Risk occurs when a nonprofit becomes dependent on the unpaid labour, personal resources, and managerial capacity of its fiduciaries — the very people who are supposed to be overseeing the organization, not running it.

Instead of the organization being at risk from the fiduciary, the fiduciary becomes at risk from the organization.

It’s an inversion of the usual governance model, and it’s surprisingly common.

How It Happens

Reverse fiduciary risk tends to emerge in nonprofits that:

• have no paid staff,
• operate on shoestring budgets,
• rely on a single dedicated volunteer to “keep things going,”
• lack clear role descriptions,
• or experience rapid turnover on the board.

In these settings, a volunteer director often becomes the de facto executive director, office manager, bookkeeper, fundraiser, and janitor — all at once. They do it because someone has to. They do it because the mission matters. They do it because no one else will.

But the organization becomes dependent on this unpaid labour. And dependence creates vulnerability — not for the organization, but for the volunteer.

The Unspoken Cost: Unjust Enrichment

There’s also a legal dimension we rarely acknowledge. When a volunteer director provides essential labour or pays expenses out of pocket, the organization receives a measurable benefit. The volunteer experiences a corresponding loss. And often, there is no legal justification for the organization to retain that benefit without compensation.

In other words, the organization may be unjustly enriched — not through wrongdoing, but through structural reliance on unpaid fiduciaries.

This is an angle the nonprofit sector has not explored, and it deserves attention.

Why This Matters for the Sector

Reverse fiduciary risk isn’t about blaming nonprofits. It’s about recognizing a blind spot that affects governance, sustainability, and fairness.

When we ignore this risk:

• volunteers burn out,
• founders feel pushed aside,
• boards inherit organizations built on invisible labour,
• and disputes escalate unnecessarily.

When we name it, we can start to address it.

What Needs to Change

Nonprofits can reduce reverse fiduciary risk by:

• clarifying the difference between governance and operations,
• budgeting for administrative support,
• acknowledging the economic value of volunteer labour,
• reimbursing expenses promptly,
• and ensuring that no single volunteer carries the organization on their back.

Funders and regulators also have a role to play in recognizing the hidden labour that sustains small nonprofits.

A Call for a More Honest Conversation

The nonprofit sector depends on generosity — but generosity should not be exploited. Volunteers who give their time, skills, and even their own money to keep organizations alive deserve more than gratitude. They deserve structures that protect them, not expose them.

By naming Reverse Fiduciary Risk, we can finally talk about the uncomfortable truth: sometimes, the people who give the most are the ones most at risk.

And once we see it, we can start to fix it.