Friends of the Library

Question

[This question about Friends of the Library and $$$ is from a municipal public library]

We have a newly re-organized Friends group that does not have 501(c)(3) status but would like to accept donations. I know that the library can act as a pass-through for grants but I was wondering if this also applies to undesignated monetary donations?

Answer

This issue—the question of a public library acting as a pass-through on an ongoing and open-ended basis for its Friends—is like a mouse seeking cheddar[1] cheese in a maze.


Question

I have always been under the impression that it is illegal for public libraries to fundraise on their own, aside from 2 book sales per year. If a school district public library no longer has a Friends Group, can it host fundraisers? For example, could the library itself host a bingo night and raise money? Can a school district public library send out a fundraising letter?

Answer

There are a lot of questions packed into this submission!

Let's take them one at a time.

First question: "I have always been under the impression that it is illegal for public libraries to fundraise on their own, aside from 2 book sales per year." [1]


Question

There seems to be a trend for libraries that have Friends groups to hold fundraisers, donations, and membership drives at the library. In some instances, the library collects money for the Friends and pays it to them at a later date.

Answer

Ideally, a public library does NOT handle the money of another entity, even for "Friends."  Ever.

That said, there is no law barring a library from helping out a partner or organization with cash handling for events; this "never" rule comes from risk management, not the law.  


Question

Are incorporated "Friends", who do not receive over $50 thousand, do not have paid staff, and are only able to provide the funds to the library, required to register [with the New York Attorney General] and submit the CHAR500 form?

Answer

When one considers becoming a "Friend" of a library, several activities spring to mind:


Question

There are so many ways the relationship between a library and their Friends can get "complicated."

Can you provide a template for an agreement between a library and their Friends?

Answer

NOTE: As a primer to this answer, which mostly consists of the requested template, I suggest reviewing the materials in the ever-excellent "NYLA Handbook for Library Trustees,"[1] particularly the guidance and links on page 85.


Question

Is it legal for a Friends of the Library group to hold their funds and not to use those funds to support the library's mission? OR refuse to pay for library program and services when ask by library staff?
Can they lose their 501c3 status, if it is proven that the funds are not being used to benefit the library?

Answer

Before we address what may be the clear signs of a dysfunctional relationship between a library and its "Friends," let's explore the basis for the Library-Friends arrangement.