Recently Asked Questions

A community member hosts a “free with donation” yoga class at our library, and attendees are encouraged to make a donation each class. These donations are collected by the yoga instructor who hands them to the circulation assistant and identifies it as a donation to the Friends of the Library organization. She keeps her receipts and totals the money each year, claiming these donations on her taxes as her contribution to a 501(c)3 organization (the Friends of the Library).

So my question is, does this constitute as fraud in any way? If so, will this be problematic for the yoga instructor, the Friends of the Library, or the Library itself (municipality) for hosting the event? They are collecting money from other people for providing a service and claiming all the donations collected as their own for a tax write off.

Any guidance on this will be appreciated! Perhaps a simple solution would be to re-word how this is done, saying that donations to the yoga instructor will be made to the yoga instructor and not advertised as a fundraiser for the Friends.

Thank you!

[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?

Our museum has an item on long-term loan that is potentially pretty valuable--a 200-yr old document.

We no longer wish to have this item in our custody unless it is gifted to us outright, and no longer on loan.

The gentleman who loaned it to us lives out of state and is considering donating the item to us, but is currently consulting with his attorneys to decide if he should gift the item to us (a non-profit museum) for tax deduction benefits or ask us to return it to sell the item elsewhere.

He is basing this decision on appraisals done by a company that has not seen the object in question in person for nearly 20 years (the length of time it has been on loan to us), and only has photographs to go by. These appraisals were paid for by the potential donor.

Our museum does not do appraisals, nor can we afford one of our own, so we have no way of knowing if the item is worth what he says it is. Is there any potential legal ramification to us if we decide to accept the item into our collection as a donation with the value he has listed (around $20,000)- i.e. in a situation like a tax audit?