Donations

This question had me on the edge of my seat until the very end.

          WHAT is this 200-year-old document?

          WHO is this mysterious lender?

          WHAT does the original loan agreement look like?

          WHO took the 20-year-old photos?

Sadly, it's possible I'll never know the answers to these questions since none of that information is required to answer the member's question.

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?

The answer is: maybe, but no big deal.

Uh...

"No big deal"?

Yep.  Here's why:

For a donor to claim a federal income tax deduction based on the fair market value of a donated object, the donor must back up the claimed amount with a recent[1] appraisal.  But the form the donee must sign to acknowledge the gift expressly says:

This acknowledgment does not represent agreement with the claimed fair market value.

So, unless there are enough circumstances to suggest that things are fishy or outright fraudulent, a donee accepting a gift and signing a tax form to enable a donor to claim a deduction puts the risk of inaccuracy on the donor.

That said...

There are other reasons, aside from concerns from the IRS audit, that merit caution in a scenario like the one described by the member.

When a museum that relies solely on the representation of a donor as to the value of a donated object in their collection, the insurance coverage on that object, which should be based on the value of a collection, is based on third-party information. In a worst-case scenario, that could mean an insurance claim is based on what turns out to be inaccurate information. And of course, clear eyes and scrutiny are warranted when part of a donation's value is because of history and/or provenance.

Assessing value might also be part of a museum’s overall evaluation of whether an object fits within the institution's mission and collection management policy. So even if an independent appraisal isn't possible, having a policy of insisting on one for donations in excess of a certain value might be a good policy...and one that, for special circumstances, could be waived.[2]

As with any transaction, there absolutely could be "legal ramifications" for accepting a document[3] worth $20k+, but in and of themselves, those factors shouldn't pose an impediment to accepting such a gift.

Thanks for a great question.

For more information on gift acceptance, income tax deductions, and appraisals, visit the IRS at: https://www.irs.gov/instructions/i8283#en_US_202112_publink62730rd0e827

---

[1] The appraisal should be done within 6 months of the donation.

[2] Or a donor could be sought to cover the costs

[3] Art and a few other things require the appraisal to be attached.  For more on that, see the IRS guidance linked above.

 

There is no legal authority in New York that denies the ability of a town public library (or any municipally affiliated public library) to solicit donations.

There is no law that bars it.

There is no regulation that bars it.

There is no comptroller opinion that bars it.

There is no attorney general opinion that bars it.

There is no case law that bars it.

Now, despite all that lack of barring, there ARE many reasons why libraries funded by tax dollars, and operating in conjunction with a municipality, may want to avoid the general solicitations of donations (some previous "Ask the Lawyer" RAQs on this issue is here: https://www.wnylrc.org/ask-the-lawyer/raqs/282,  https://www.wnylrc.org/ask-the-lawyer/raqs/68 and here: https://www.wnylrc.org/ask-the-lawyer/raqs/25). For those reasons (and maybe ten more I could name after a strong cup of coffee), I always strongly urge public libraries who wish to solicit donations to have a precise, defined purpose for soliciting donations...something that is distinct and separate from the core operations of the library.

For example, if the library would like to sponsor local artists to create window displays related to new books and programming, a solicitation could be "Donate to our local artist window program!" Or if the library wanted to solicit funds for extra activities, a solicitation could be "Donate to our 'Kids Jumping into Reading' 2023 fitness program!" Or if the library wants to create or grow an endowment, it could be "Assure our future, donate to our endowment fund!"[1]

And of course, regardless of the purpose, any library receiving donations must be set up to receive, track, and expend the donations per proper fiscal controls. If the money is for a specific purpose (as I have suggested it be), the accounting mechanisms to show it was only expended for that purpose must be in place before the money is solicited. If the money is being solicited online via credit card or other electronic means, care should be taken to select a processor that the library's financial institution regards as secure.

Solicitation of donations are how public libraries can grow non-essential programs, amass a capital funds, and plan for long-range strategic objectives. The extra conditions non-association libraries face when it comes to using donated money--controls on procurement, criteria for investment, and the interplay between public and private money--is why many public libraries designate Friends groups to solicit funds for "extras."

But while a public library may determine that such solicitation is best left to an affiliated not-for-profit, so long as they have the right policies and fiscal controls, there is no bar to a public library receiving donated funds, and no bar on asking for them... or enabling such a request by putting a "donate" button on the library website.

Thank you for a great question.

---

[1] DO NOT DO THIS unless the library has an investment policy that meets the requirements of both the General Municipal Law and the Not-for-Profit Education Law, and both the library's accountant and lawyer have reviewed the policy and the fund parameters and have confirmed, IN WRITING, that the policy meets the requirements.

 

The State of New York has very strong feelings about collecting cultural assets and information.  So strong, that such collections are governed by a host of laws, regulations, and policy.

Precisely which laws, regulations and policy apply to a collection depends on the type of entity doing the collecting.  Museums, historical societies, archives, and libraries all fall under their different (but overlapping) conditions. And before the law takes the wheel, the formation documents of an entity control what items fall within their mission, and what items don't make the cut.

So, for a simple question like: "Can you review our deed of gift and loan forms?" be ready for this response:

Yes!  We can review your deed of gift and loan forms.  To make sure the review supports your mission, is consistent with your governing documents, and ensures compliance with relevant law and regulation, can you send us:

• Charter or Certificate of Incorporation
• Bylaws
• Collection Management Policy
• Most recent form 990 or CHAR 500
• Insurance Summary (optional, but it helps to know the extent of insurance coverage for both owned and borrowed items)

Now, if your institution needs your forms reviewed, and you can't find these things, don't worry, we can help you find them.  Also be prepared for a quick phone call asking if there are any current disputes involving collection items, and to discuss any specific goals you have for the forms.

When reviewing gift forms, the goal is always to ensure that the contract terms created by the form are consistent with the law and foundation documents that will govern the institution's receipt of the gift.  The makes a form more likely to withstand a challenge from an angry relative, or during an internal dispute.

So, no matter what lawyer reviews your forms, be ready to give them a dossier of documents!

Thanks to the member out there who put up with me while I kept asking questions!

[NOTE:  For some initial background on New York's law governing museums and loaned/donated items, see Special collections not recorded on institution's ledgers]

On its face, NY Education Law 233-aa seems straightforward, but as the member's questions point out, it requires the consideration of a lot of details.

To answer the question while addressing those details, I'm going to use a story to give my answers some focus.

The Story

When I was in third grade,[1] a schoolmate brought her grandfather's shillelagh,[2] a family heirloom from Ireland, into school for "Show & Tell."

Before and after our "Show and Tell," the shillelagh was kept in my classmate's locker.

You probably know where this story is going.  At some point after "Show and Tell," the shillelagh went missing. 

I can still remember my teacher making the announcement, casting a discerning eye at my fellow third-graders, trying to pick out the criminal.[3]

To the best of my knowledge, that family heirloom has never been found.[4]  But because I am the sort of person who is very into both heirlooms and true crime mysteries, every few years, I find myself wondering where it is.[5]

But let's pretend that sometime in 1981, whoever took it that day held onto it for a bit, and then-- realizing they had no need for a hot shillelagh--hastily left it on a museum's doorstep with a note reading: "I thought you could use this, so here you go.  Sincerely, I.M. Purloiner." 

And to make my scenario work, let's further pretend the museum, finding an antique shillelagh to be within the scope of its mission,[6] accessions the item into its collection, and never hears from "I.M.  Purloiner" again.

And with that scenario to work with, let's answer these questions.

How much documentation is required for a donation to have sufficient written proof of legal transfer of ownership?

If a museum has any contemporaneous records showing that an item, when dropped off, was a "donation," unless there are circumstances to the contrary, I am comfortable saying the museum can regard the item as its own property.

In the member's scenario, that record would be a routine practice of recording items as either loans or donations.  In my scenario, there isn't quite enough (nothing shows an intent to transfer the ownership).

Of course, nowadays, there are very precise requirements for ensuring donors are aware of the terms of a gift to a museum.  For example, Education Law 233-aa (3) requires:

Prior to the acquisition of property by gift, a museum shall inform a donor or prospective donor of the provisions of this section and shall provide a donor or prospective donor with a written copy of its mission statement and collections policy, which shall include policies and procedures of the museum related to deaccessioning.

But what about, as the member writes, documentation of items from before the law was in effect?[7]  Again: if a museum can show a customary practice of accepting donations by recording them in a particular way, I believe it can make a compelling case that the title (ownership) of the piece was transferred to the museum at the time of the intake.

I base this conclusion, in part, on the law's definition of a "loan" and a "lender":

The term “loan” means a deposit of property with a museum not accompanied by a transfer to such museum of title to the property.

The term “lender” means a person legally entitled to, or claiming to be legally entitled to, property held by the museum or, if such person is deceased, the legal heirs of such person.

That said, if there is no record of how an item was accepted (as either a donation or loan), the only presumption I can endorse is that the item was a loan.

Which brings us to the member’s next question: In the collections, we have a significant number of donated items which do not appear to have deeds of gift clearly transferring title from the original owner to the museum. ...  In your reading of the Museum Property Law, should we consider such property to be undocumented, and to require similar measures to gain title?

Building on the idea that if there is clear evidence that the property was accepted as a gift--even if not through a "deed of gift" or other typical instrument--I would regard it not as "undocumented" (which means there is no reliable information as to the lender or donor), but as a donation.  On the flip side, if accepted as a loan, I would again not regard it as "undocumented," but rather, as "unclaimed" property, as contemplated by Section 7 of the Education Law 233-aa:

Unless there is a written loan agreement to the contrary, and notwithstanding any other provision of law regarding abandoned or lost property, a museum that has made a good faith and reasonable search for the identity and last known address of the lender from the museum records and other records reasonably available to museum staff may terminate a loan for unclaimed property in its possession in accordance with the provisions of this subdivision. [emphasis added]

Which brings us to the member's next question:  Regarding “unclaimed property”: How much of an effort is considered “good faith” in seeking lenders of very old loans?

There is no magic formula for "good faith" (in this context), but in general, if a museum feels it can show it has used all available resources, without undo time and expense, it should be able to demonstrate it.

The trick to "good faith" is being able to show a meaningful, genuine effort.  Does it mean a museum has to hire a private investigator to establish the identity of a person who left a shillelagh on its porch in 1981? No. But if a known lender with a known address is recently deceased, and a list of heirs can be obtained from the Surrogate’s Court in their county (for free or a nominal copying fee), should that be done? Yes.

This brings us to these final questions:

If we know that a lender is deceased, are we still required to send them certified letters?

If it is known that the lender is deceased, the letter should be addressed to their heir, if possible. 

Are we required to seek out their next of kin, and if so, are we required to continue seeking next of kin until we find a living relative?

It is not the next-of-kin, but the "heir" who should be sought (the terms are not synonymous[8]). 

How does a museum identify a deceased lender’s heir?  That information can "reasonably" be sought in the Surrogate's Court in the county of the lenders' last known residence.  And if the information isn't there, I feel comfortable saying that a documented attempt to locate it there is all that is needed to show "good faith."

Is seeking permission from next of kin actually counterproductive, in that it could open us up to a lawsuit from a non-next-of-kin heir?

As I say, because of how 233-aa defines "lender," it is not the next-of-kin who should be sought, but the "heir."   Of course, doing the right thing is never a guarantee that a museum won't be sued...but if there is a legal action, or threat of one, efforts to find the "heir" will establish a "good faith" attempt to follow the law, which will position a museum to legally defend its actions.

All of which brings me back to my classmate's missing shillelagh.  If the museum in my scenario decided it wasn't comfortable with the manner in which it was acquired, and wanted to firm up its claim to the item (or return it to its owner), that is when a museum can follow the process for "undocumented property" and publish a notice meeting the requirements of 233-aa.

I hope this walk through the details (with a shillelagh), has been helpful.

---

[1] Circa 1981.

[2] What's a shillelagh (pronounced "shill-lay-lee")?  It's an Irish walking stick; for more info, see https://en.wikipedia.org/wiki/Shillelagh_(club).

[3] It was not me.

[4] I resisted the urge to jump on Facebook and find my former classmate to ask.  What a random, creepy question to ask after 30 years of silence.

[5] If by any chance you are reading this in the Central New York area and happen to know, please send me a note at adams@losapllc.com.

[6] The Museum of Wooden Tools?  The Museum of Walking Sticks?  The Museum of Irish Implements?

[7] 2008.

[8] This is why it is important to try and get the information from the Surrogate's Court.  A person may die and deliberately disinherit their next-of-kin, while designating other heirs.

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.  

What risks are managed by this "never" rule?  All the risks that come with handling funds, including:

• The risk that cash is not properly counted;
• The risk that the cash is misplaced or stolen;
• The risk that cash is from sales requiring sales tax;
• Accusations (even if unfounded) of mis-handling or theft;
• Improper attribution of income to the library;
• Consumer or regulatory agency confusion about who transactions were with.

None of these are risks that can be totally eliminated, but they can be mitigated.  Sometimes, there may be very compelling reasons to break the "never" rule so the library can help another entity (including Friends) and mitigate the risk as best as possible.

So my answer to the question "...is it allowable for libraries to collect Friends membership dues and donations then pay it back to the Friends?" is: YES, but it should only be done for the right purpose, with the right preparation, and per the right policy.

What is "the right purpose?"  That is up to your library and its policies.  But certainly, helping Friends or other affiliated organizations support the mission of the library can qualify.

What is "the right preparation?"  It starts with the "right policy."

If the limited capacity of the Friends (or another allied organization) means the library must help with cash handling (facilitating sales, accepting donations, forwarding the monies to the Friends), there should be a policy at both organizations addressing this approach.

A sample policy for the library is:

Fiscal Controls When Collaborating with Another Entity

To reduce costs and avoid risk, whenever possible, the Library will not support or serve as the agent for collecting donations or revenue for another entity with which it is jointly providing programming.

However, from time to time, the Library may help present an event that requires the coordinated payment, acceptance, and transfer of money or in-kind donations between the Library and the collaborating party.  When that is the case, to ensure adherence to all relevant laws, regulations, and policies, every such event shall be governed by written, signed terms for the handling of such monies.  Such written, signed terms shall be tailored to the specific circumstances of the event and shall set out the manner in which the parties will abide by all relevant policies, including but not limited to:

• Conflict of Interest
• Fiscal Controls (including those governing cash handling, acceptance of payment, payments, approved credit card use, acceptance of credit cards/PCI compliance, deposit, remission of funds, and accounting)
• Bar on political activity
• Relevant tax considerations

The written agreement shall be reviewed and approved by the Treasurer before being signed by the Director, no less than two weeks before the event.

For entities that frequently collaborate with the Library (local charities, Friends, etc.), a standing agreement reviewed once per year by the respective organizations may be used, so long as it contemplates all forms of accepting and remitting money and confirms the process for the sharing or remission of the same.

 

A sample Letter Agreement is:

RE:  [NAME OF EVENT]

Dear [Treasurer of Friends]:

The Library is looking forward to the event on DATE at the Library.

At the event, the Friends will be accepting donations via cash, credit card, and check.  While the credit card transactions will be completed via a service maintained by the Friends, the Library staff will be assisting with the acceptance of cash and checks by providing a secure location to store them until deposit per the Library's process for securely holding cash.

Per Library policy, at no point will one Library employee be responsible for receiving, counting, and securing cash on site (all transactions must include two Library employees). 

The Treasurer of the Friends will sign an acknowledgement confirming the amount of cash and number of checks turned over to the Friend's Treasurer for deposit.  The receipt will be retained by the Library for a minimum of 6 years.

If such sales are made as part of the event, the Friends will be responsible for collecting and remitting any sales tax owed for any sales of retail items.

 

All of this being said, it is the sign of a strong "Friends"—or any type of not-for-profit organization—for the organization to have its own fiscal control policies and to be ready to competently receive and account for donations.

While it is not the "sexy" part of a charitable mission, fiscal controls (and the ability to security accept money) is a critical infrastructure. So, when recruiting leadership for "Friends," taking the time to find a few volunteers who are familiar with accounting is a worthwhile investment!

Thank you for an important and nuanced question.

Before I answer this, I am going to share a story.  Trust me, it’s relevant.

When the workforce restrictions and ban on large gatherings due to COVID-19 started impacting libraries, the first wave of questions to “Ask the Lawyer” were about continuity of operations.  Specifically, they were about continuing payroll and still offering programs, even though staff would need to work from home.

Because Executive Orders and public health restrictions were happening at a rapid pace, answers needed to be developed quickly. 

If there is one thing the lawyers hate, it is quick decision-making.  We like precedent, we like time for research, and we like ample time to reflect on the implications of our client’s decisions.   In a world moving ever-faster, this is one of the things I cherish about my profession: it demands reflection.

But with libraries waiting for input, I didn’t have the luxury of time.  My research indicated that—barring a union contract provision or other express intervening factor—job expectations could be temporarily altered and library programs could continue, re-tooled to meet social distancing requirements (a/k/a “online”) while ensuring legal compliance and limiting liability.  But I couldn’t take a week or two to decide.

So I did what lawyers do when we don’t have time to let advice ferment—I turned to another lawyer.

I called an attorney I knew would appreciate the nuances of a question involving municipal law, Education law, taxpayer money, and the all-seeing eye of the NYS Comptroller.  I laid out the thinking that would eventually form my answers, and asked him to poke any holes he could see (I think I said “Pretend you’re the attorney for an angry taxpayer”). 

He asked a few well-informed, testing questions, and when my legal analysis held up, I felt good. 

But then he asked:

“Cole, do you actually think when this thing is all over, the Comptroller is going to organize a posse and hunt down libraries for trying to help their communities? I mean come on…people are in real need here.  Who would do that?”

I laughed, and it felt good.[1]  I thanked him and said I owed him one (in my world that means he gets to ask me a similar favor, any time, night or day, and I have to deliver).

Here’s the truth, though: although I laughed, my secret answer to his question was: Yes.  Yes, I do think that when this is all over, the Comptroller could audit and expose fiscal mis-steps by well-meaning libraries.  And I am also concerned that frightened tax payers and municipalities, searching for a way to “solve” fiscal panic, could use any small lapses in compliance or transparency to try and reduce budgets next fiscal year (just when they’ll be needing their libraries to assist with ongoing community recovery).  That is why the member’s question is so important.

That said, I got into this business because I believe that law, when well-developed and thoughtfully applied, can ensure justice and create the conditions for a happy society.  And I think the law—even as construed by the Comptroller—will allow for the actions proposed by the member, without the concern that a prohibited gift[2] or shady transaction was engaged in.

How?

I’ll give you three solutions.

But first…

Some Necessary Background

As a primer to each solution, just in case you haven’t checked in on fiscal controls for public libraries, every reader should visit NYLA’s excellent “Handbook for Library Trustees” (2018 edition), pages 50-58.[3]  This section sets forth all the routine requirements for properly accepting, retaining, spending, and accounting for both public and privately sourced funding. 

The solutions below, and the steps to set them in motion, build off the assumption that a library is following the fiscal practices laid out in those pages.

And just one more thing…

 

Safety First

Okay.  Let’s say your board is ready to assess and approve budget adjustments to initiate the acquisition and distribution of food and PPE.  Your staff and some volunteers are rarin’ to go.[4]   All you need to do is sort out the legal stuff.

But before worrying about how to fund it, or how to characterize the initiative in the budget, the first thing to consider is safety.

No matter what situation the library is in, a written safety plan, informed by OSHA and CDC guidelines, and ideally, confirmed with the local County Health Department, is the first priority for any such initiative.  Before approving funds, a board should review the plan for safety, and be assured that it is as well-developed as it can be (and again, if at all possible, confirmed by experts).[5]

So with that “safety first” caveat, here are the three solutions:

 

Solution 1: Acquisition and Distribution Only (No programming)

Objective: The library will acquire and distribute food and PPE, without any educational programming component or further conditions for participation (people can just stop by and pick up what they need).

Action Steps:

Step 1: Organizers (who could be board members, or staff, or volunteers…any combination is fine) develop and, with a county health official, affirm a safety plan for the distribution of the resources.  This plan should include how the items will be acquired, transported, and picked up, and what staff and volunteer resources will be used. 

NOTE: to ensure the safety of employees and protect the library from any liability, changes to routine job duties should be confirmed in a short letter referencing the safety plan.

Step 2:  Considering the need they hope to fill, and safety parameters, organizers develop a procurement plan, consistent with library policy and pages 50-58 of the Trustee Handbook, for the supplies to be acquired.  This plan should consider the appropriate sourcing and selection of supplies (PPE meeting CDC guidelines, food suited to re-distribution), and the need to follow relevant procurement laws.

NOTE:  On March 27, the Governor issued Executive Order 202.11, which suspends the public bid opening requirements of General Municipal Law Section 103(2) (of course, 103 only applies to purchases exceeding $20k…that would be a lot of PPE!).

Step 3: The Treasurer develops a budget recommendation for a budget change that will fund the procurement plan, and confirms to the board that any private funds to be used are not barred by donor terms (if all of the steps in this solution are followed, it will be a legal use of tax levy funds).

Step 4:  The board looks through its mission and plan of service and selects the language in those guiding resources consistent with a distribution for the goods to promote the health or general well-being of the community.

Step 5:  The board verifies the above steps, verifies consistency with bylaws and library policies, and sets a meeting under the modified procedures of the Open Meetings Law to adopt a customized version of the following resolution:

WHEREAS it is the mission of the [NAME] Library to [insert] and the plan of service for the library includes [insert];and

WHEREAS the state is currently in a state of emergency as a result of the ongoing COVID-19 pandemic; and

WHEREAS owing to the pandemic and state of emergency, the library’s area of service is in an unprecedented state of need with regard to fundamentals and supplies for personal safety; and

WHEREAS, owing to travel restrictions and the need of essential workers to serve our community, some people within our area of service may not be card-holding members of the community, but still be in need of supplies that will protect the their well-being, as therefore the general health of our area of service; and

WHEREAS the board finds it consistent with the mission and plan of service to adjust the current budget of the library to allocate resources to assist those within our community by supplying fundamental resources to enable the promotion of health and safety during a time of emergency; and

WHEREAS because the library is uniquely situated and widely regarded as a trustworthy and centrally located institution whose resources are freely accessible to all, and regards it as mission-critical to continue that role at this time; and

WHEREAS the library staff has identified a written plan for the safe allocation of such fundamental resources, and such plan has been reviewed by appropriate health officials; and

WHEREAS the library staff has identified and the board has duly reviewed a proposed plan for the responsible and compliant procurement of such resources, which is attached to this resolution and included in the minutes of this meeting; and

WHEREAS the Treasurer has verified that any private sources of funding do not bar the proposed procurement;

BE IT RESOLVED that the current budget be amended to direct [$amount] from [insert] to the acquisition and free distribution of food and personal protective equipment during the state of emergency, and during any period of recovery (the “Community Health Initiative Plan”); and

BE IT FURTHER RESOLVED that the acquisition of such resources listed in the Procurement Plan shall be conducted and accounted for per all the required provisions for procurement; and

BE IT FURTHER RESOLVED that the library shall effect the distribution of the resources only as set forth in the attached Safety Plan.

 

Solution 2: A Public Health Program

Objective: the library develops a program, consistent with its plan of service, to educate participants on PPE and the importance of good nutrition during a pandemic, and after a short educational program, makes supplies available.  This could even include innovative and fun ideas, like a recipe from a local chef, or instructions for canning food.

Action Steps:

Step 1: Organizers develop and, with a county health official, affirm the content of a short educational program, as well as the safety plan for distribution of the resources. 

Step 2:  Follow all the steps in “Solution 1,” but add this “whereas” clause to your resolution:

WHEREAS the library staff has [developed/identified] a short informational program on personal protective equipment and the important of good nutrition, and such program has been [reviewed by/endorsed by] appropriate health officials;

And add this further action to the resolution:

BE IT FURTHER RESOLVED that in conjunction with the distribution of fundamental resources the library shall promote the short informational program identified in the Safety Plan.

And finally…

 

Solution 3: The Partnered Program

Objective: together with another entity, and per a written agreement, the library allocates financial, and perhaps other, resources to a joint public health initiative to acquire and distribute supplies.

This one I can’t provide a template for: the permutations are just too diverse.  I can only say, when working with another entity, the library will need to consider every element listed in the above solutions: safety (first, always), mission alignment, employee needs, budget, and proper vetting of the plan by appropriate health officials.

Because of the risks related to compliance, a collaborative approach (unless it is just a donation to one of the above efforts…with that, take the money and get it done!) should be only through a written agreement that has been reviewed by the library's lawyer.  For this reason, it could be more cumbersome than other approaches, but in the event of a worst-case scenario, confirming all those details will be worth it.

 

For All Solutions

For any of the solutions I have outlined above, a critical contributor may be the library's insurance carrier. Right after the organizers start developing the plan for safety, someone should give your carrier a call, just to make sure there are no “exclusions” from the policy or conditions for your library to consider.

How do you check in with a carrier on this?  Just tell them: “Some lawyer who writes about library legal issues said we should check in with you before we do this.”

While your insurance carrier is probably used to the library developing innovative programming and serving a wide swathe of the population, the distribution of food and PPE during a pandemic is something they might want to weigh in on.  That said, in my experience, most carriers will encourage your initiative.  They might ask questions about where the distribution will take place, who is offering the programming, and how you are sourcing the supplies. 

Since the answers might impact your planning, it is better to call them early in the process, rather than just before the board meets (telephonically, as allowed by Executive Order 202.6[6]) to vote.

And who knows?  They might even have some helpful hints for you as you undertake to support your community.   This whole thing is keeping agents and adjusters awake at night, just like the rest of us.

 

Thank you

Okay, once I start waxing on about insurance, it’s time to pack it in.  I hope this was helpful, and I hope it can contribute to your library meeting the needs of your community.

Thank you for a great question, for your determination, and your dauntless innovation.

---

[1] This image his rhetoric inspired in my head--an army of GAGAS-wielding accountants, riding horses across libraryland, handing out fiscal frontier justice—makes me laugh now, too (but also cringe).

[2] In violation of Article VIII, Section 8 of the NY Constitution.

[3] One cardinal rule at “Ask the Lawyer” is “don’t reinvent the wheel.”  If library resources have already been used to develop solid guidance on a topic, we simply refer the member to that answer.  Lucky for me, librarians are innovators, so there are always new topics to address.

[4] Some libraries and library systems may have determined that, because they are regarded as a subdivision of government, the current workforce reduction orders do not apply to them.  Others will be organizing a program with the restriction that employees must (as of April 28, 2020) 100% work from home.  Still others will be coordinating terms of employment with a union.  This answer presumes your library is working within its own, unique parameters.

[5] By stressing this, I don’t mean to imply that the member is not thinking about safety (in fact, the care the member is taking about legal compliance suggests to me that they place a high priority on safety).  I just want to make sure that in any initiative to assist during this time of emergency, safety is the first consideration on the table.  At all times.

[6] As discussed in [2020 Pandemic Date Specific] Executive Order 202 and NY Open Meetings Law.

 

To answer the member’s questions, we must start with the fundamentals.

When accepting a donation of culturally significant photos, an archive should have a donor agreement or other documentation that addresses the following things:

Does the donor solely own the physical photos?

Is physical ownership being given to your institution?

Who authored the pictures?  If not a company, what is their name and birthdate?

Does the donor solely own the copyrights?

Is copyright ownership being given to your institution? If not, what permission comes with the physical donation?

May the receiving institution license use by others (a “transferable license”)?

Were the copyrights registered?

Are there any reservations or conditions on this gift?

If donated as part of a will, obtain a copy of the will.

What is the value of the gift? (for tax purposes, if the donor wants to claim a deduction)

Confirming the scope of the donation, the conditions, and value of the gift creates a firm basis for future decisions, including how to address the potential risks of posting pictures of minors.

It is also helpful to get as much additional information as you can at the time of the donation:

To the best of the donor’s ability, what is the date, place, and identity of those in the pictures?  What else of significance is being depicted?

What type of equipment was used to product the images?

Why were the images gathered?

Who collected the images?

Why is this collection significant; why should it be preserved and made available to the public?

Why does this collection fit into the mission of your institution?

Knowing as much as possible about the provenance and purpose of a collection makes it easier to access the protections built into the law for journalism and scholarship.  And with that background, it is easier to assess the risks when the collection involves human subjects.[1]

Those risks include:

Will this content be used by the institution in a way that violates New York’s bar on use of names and likenesses for commercial use? [2]

Are there any ethical considerations that bar including these images in the collection?

Is this depicting any personal health information?

Are there special sensitivities we must consider and plan for?[3]

Will the names of those depicted be included in the metadata of the digital archive?  If so, why is that necessary?

When it comes to minors (those under 18), additional risks are:

Will this reveal a minor’s youthful offender status?

Will this reveal participation in the social services system?

Does this depict an illegal act?

If the answer to any of the last eight questions is “yes,” a consultation with a lawyer, and perhaps an an image-by-image review, may be warranted.  But while that may time time and resources, it may be worth it, since there still may be a way to digitize the photos and make them available via the internet…especially if they have sentimental, cultural, historical and academic value to our region and beyond.

 

---

[1] At an academic institution, if the images depict human subjects (of any age) consult the Institutional Review Board (“IRB”).  Depending on how you design your project, it could be important.

[2] Here is the actual text of the law: “§  50.  Right  of privacy. A person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the  name,  portrait or  picture  of  any  living  person  without  having first obtained the written consent of such person, or if a minor of his or  her  parent  or guardian, is guilty of a misdemeanor.”

[3] Depictions of exploitation, enslavement, abuse, or images that could be considered an “illegal sex act” (as defined by §130 the penal law) for instance.  From the sound of it, that is not the case here, but at “Ask the Lawyer!” we try to be thorough.

This sounds like a great project…a public page providing a guided tour of art throughout the campus, with maps, information, and pictures to help the viewer find the works.

But you’re right, if they haven’t expired, the rights are still the property of the artist—or their heirs, or any third party they were sold to.  And the digital image you create could infringe those rights.

There is no one catch-all “exception” to copyright that completely avoids this, but there are some steps you can take to keep your institution on the safer side of the law. 

Here they are, in descending order of strength and certainty:

1.  Verify that the works are actually still protected by copyright.  Anything from before 1923, for instance, is no longer protected.  If you want to showcase 50 works, and 25 of them are from before 1923 [1], you’ve just reduced your concerns by half!

2.  If your campus has an art registrar (a position distinct from an admissions registrar, but with a similar flair for detailed record-keeping), ask them if the donation came with any assignment or license of copyrights.  Sometimes, the donor—especially if they were the artist—will give limited duplication and display rights for purposes of promoting the work.  While by no means a certainly, it is worth checking out.

3.  If the rights are still valid and no license has been obtained previously, it is possible to ask for permission now.  A simple letter—perhaps sent in coordination with your department for Institutional Advancement—could ask:

Your lovely work, TITLE, was donated to our university in YEAR.  We are hoping to secure your permission to duplicate the work so we can show a full-color reproduction on our website.  The image would be used to illustrate an online and print guided tour that showcases our more valued works of art, including TITLE (the “Work”). 

If you still own the copyrights and can give permission, please check one of the circles below, sign in the space below, and return this letter in the accompanying self-addressed, pre-stamped envelope:

o   I hereby license the university to use the Work without any restrictions, in any medium whatsoever, for any purpose whatsoever.

o   I hereby license the university to duplicate, publish and display the Work solely for the use described in this letter, in both print and via the internet, with no further restrictions or conditions.

o   I hereby license the university to duplicate, publish and display the Work per the following terms:_________________________________________________ ______________________________________________________________.

Thank you for considering this courtesy to our university.

Very truly yours,

 

[YOUR NAME]

ACCEPTED AND SIGNED:________________________      

                                                            [ARTIST NAME]

on __________________

               DATE    

4.  “Claiming Fair Use,” version 1: This takes advantage of the formula for using a copyrighted work without permission, created by Section 107 of the Copyright Act.  Here’s what you do: carefully write out a description of your initiative, and why it is important that the public know of and have a visual cue be able to find these works.  Then take a photo of each artwork…not head-on and alone, but at an angle and with a live person—perhaps a student—interacting with the work.  Make sure the art is not duplicable from the digital image, and make sure that image is more about the person viewing the work, and its location, than the art itself.  Generate a description of this image that speaks to what is happening in the photo, including how people interact with the work.  Include not only the image, but these observations in your guide, letting people know they can see the actual work in person.  Have a lawyer review it, and then retain the documentation, because even if it is later found that your use is infringing, a not-for-profit educational institution’s good-faith belief that is was fair use can mitigate damages [2].

5.  “Claiming Fair Use” Version 2: This is also an approach under 107.  Generate very low-resolution, watermarked images as described in the member’s question, and again, document the value of being able to use a limited visual element to help people find that specific work.  Have a lawyer review it, and then retain the documentation, because even if it is later found that your use is infringing, a not-for-profit educational institution’s good-faith belief that is was fair use can mitigate damages.

And there you have it: no magic bullet, but some options that, if combined, can help you create an infringement-free, beautiful guide to the art on your campus.  Of the five options, “1,” “2,” and “3” are by far the most prudent, so try those first, and then, only if you need to, consider options “4” and “5.”

I hope fate is kind, and some of your artworks pre-date 1923, or their owners are generous and easy to find.  Good luck!

---

[1] When "Ask the Lawyer" started in 2016, the author was not thinking about how, just a few years later, the "Public Domain" date would change.  To preserve this shameful lack of foresight, but also ensure accurate information, as part of the "2021 ATL Audit" we are adding this footnote:  Please substitute "1923" with [whatever year it is minus 95].   For instance, if it is 2021, the year should be 1926. When in doubt, visit the excellent chart at https://copyright.cornell.edu/publicdomain.

[2] 17 U.S.C. 504(c)(2)

 

Before I wrote this answer, I stopped to ponder the fact that there are over 20 library systems in New York, each with its own policy and approach to managing the information in its "ILS" (integrated library system).

The beauty of library law in New York--and it is beautiful--is that it uses a firm structure of laws and regulation to enable a sturdy but flexible array of unique library institutions.

All of which is to say: there is no single right answer to this question.

Every library system managing an ILS has the responsibility and right to set the terms for participation in that system. Among other things, that means every library system sets the terms for the use of the information access the system provides.

So, with that, can a library use the email addresses of its patrons from an ILS patron database to send a donation request for its annual fundraising drive?

The answer will vary from system to system. However, unless specific provisions have been made otherwise, the answer is most likely "no."

Here is why.

First, as always, we'll start with ethics.

The ALA and NYLA Code of Ethics provides: "We protect each library user's right to privacy and confidentiality with respect to information sought or received and resources consulted, borrowed, acquired or transmitted."

While using the patron information in the ILS to populate a donor solicitation list does not in and of itself reveal "information sought" by the patron, it does raise the issue of how the patron's confidential library records are being used.

Second, we'll look at the law, [1] which requires: "Library records, which contain names or other personally identifying details regarding the users of public, free association, school, college and university libraries and library systems of this state...shall be confidential and shall not be disclosed except that such records may be disclosed to the extent necessary for the proper operation of such library...."

While sending a late notice to a patron via email is certainly necessary for the proper operation of the library, using library records to solicit donations, without further consent by the patron, is again a dubious disclosure of patron information. I am not saying it is outright barred by law...but it gives me an icky feeling.

An "icky feeling," of course, is not admissible in court. So, let's dig a little deeper.

An ILS is a service each library participates in. The laws that govern ILS use are Education Law 255 and 8 NYCRR 90.3, and the bylaws of the particular system that library is a member of. Although a member library contributes information to an ILS, unless system bylaws or policies say otherwise, that information belongs to the system, who is just as ethically and legally bound to protect the information as a member library.

The default position for a library system to adopt is that patron information should only be used in furtherance of a patron's use of services from the system. This is the best way to stay on the right side of the law.

The "special position" a library system could adopt, if it wanted to facilitate special mailings based on library membership and use (not just for fundraising, but perhaps based on demographics or interest) could be to enable patron consent to such information use, perhaps by using an opt-in or express waiver. This too would ensure adherence to the law regarding confidentiality.

For a library whose system takes the "default" position of not allowing ILS information to be exported for fundraising purposes, the library also has a few options, including:

1. Creating a passive sign-up sheet for library news and fundraising efforts and maintain a spreadsheet outside of the ILS with personal information. Here is some sample language:

Do you want to sign up for newsletter information, event notifications, and fund-raising? We won't supply your information to any third party, and our mailings will come straight from the library! Please enter your name and contact information below.

2. Proactively asking patrons to voluntarily consent to the disclosure of their information for fundraising purposes during sign up and create your own list outside of the ILS.  Here is some sample language:

Per our patron confidentiality policy, the library considers records of your patronage confidential. Do you consent to the library using your name and address for newsletter information, event notification, and fund-raising? If so, please sign the agreement below. We won't supply your information to any third party, and our mailings will come straight from the library!

NOTE: This permission can be revoked upon request.

I agree for my information to be added to the library's newsletter, event, and donation solicitation list.

 

NAME:______________________________________

 

Signature:_____________________ DATE:_______________

 

3. Asking the cooperative library system to add a "library event notice and fundraising information disclosure checkbox" so the information can be exported from the ILS. Of course, such "checkbox" would depend on the ILS technology (and might be impossible to add). But it would be work exploring.

Thank you for a thought-provoking question.

---

[1] New York State Civil Practice Law and Rules Section 4509.