IRS

What an interesting set-up! If I started a private club,[1] I would totally want it over a library. Or a museum. Either way, very cool.

While cool, the operation of my private club over a school district public library would not be without concerns, because all non-association libraries have to abide by a bar on inurement[2] (which applies to all “charitable” organizations) and Article VIII Section 1 of the New York State Constitution,[3] which bars use of public assets for private use.[4]

That means that my private club could not pay less than fair market value for occupancy, except under some very particular circumstances:

1. A person deeded the property to the library on the condition that my private club has a permanent right to use it.
2. The library has arranged an in-kind exchange that is demonstrably worth what it would otherwise have to charge for rent and utilities. For instance, if my private club provides lawn maintenance, etc. roughly equal to the fair market value of the rent.[5]
3. If the occupancy creates a library mission-related benefit to the public, such as the club running an ESL program or free computer skills clinic during library hours in the space, and the arrangement is confirmed with an agreement.[6] In that type of example, it helps if the private club is also a type of charity.[7]

In the absence of those factors, there is a strong chance the arrangement could run afoul of the law. But would it, as the member asks, create a danger of the library being regarded as mismanaging funds, or of losing its charter from the New York State Education Department (NYSED)?

That answer would depend on several factors, but I can say this: no attorney for the library, once learning of this, without one of the above-listed reasons to justify the arrangement, would feel comfortable saying (much less putting in writing), “Oh, sure, keep the club upstairs! No harm, no foul.”

Instead, the attorney would be nervous because while the threat of charter revocation would be remote (there are usually warnings and time to correct the situation before a charter is revoked by NYSED[8]), these items are of immediate concern:

1. Violation of bar on inurement (which could be called “financial mismanagement,” among other things).
2. Violation of the State Constitution’s bar on use of public property for private purposes without payment of fair market value (which could also be called “financial mismanagement,” among other things).
3. Risk of denial of insurance coverage if tenant causes fire or other property damage.
4. Risk of denial of insurance coverage if tenant member causes personal injury.
5. Possible zoning issue.[9]

A willful failure to resolve the above-listed problems, if not remedied, could eventually lead to the type of trouble that could jeopardize a charter.[10]

So, what would I do with a situation like this? It is clear that the matter calls for some homework; if there is any reason that justifies the occupancy, there is still a strong motivation to ensure that the proper insurance coverage and indemnification arrangements are in place. At the same time, there is a “human factor;” if the club has been there forever, and everyone is cool with it (even though it’s not legally cool), making things right without causing a fracas will take research, careful planning, and diplomacy.

The most likely resolution to the research, planning, and diplomacy process would be a lease agreement.

Thank you for a great question!

This sounds like a lovely service to both the library and community, so I am going to make this answer as positive as possible.

First, it is clear from the question that the instructor (a “community member”) is not a library employee. So, they are either doing this as a volunteer or as an independent contractor.

Either way, before we delve into the financial/tax/deduction questions, I have to say this:

If the instructor is a volunteer, because yoga can involve some risk in injury, it is wise to have a letter in place confirming the terms of the volunteer service. That letter would address logistics, how the class is promoted, liability considerations (“hold harmless,” indemnification, insurance), and address the financial considerations (the donation arrangement).

If the instructor is an independent contractor who is getting paid to offer the class, it is wise to have a letter in place confirming the terms of the independent contractor service. That letter would address when/where the class takes place, how the class is promoted, liability considerations (“hold harmless,” indemnification, insurance), and finances (the donation arrangement).

For any library (and Friends), although incidents of injury are rare, because of the potential cost, addressing these “liability considerations” is critical. As it so happens, they can be addressed in the same letter that addresses the financial aspects.

Okay, now we can discuss the financial aspects.

The good news is that the member is 100% right: Perhaps a simple solution would be to re-word how this is done…

Exactly.

We won’t go over wording for all the combinations,[1] we’ll just deal with this scenario: a free, donation-accepting class conducted by a volunteer, with the donations turned over to the library, to be turned over to the Friends.

The issue here, of course, is: what is the donated income from the class—a direct donation to the Friends (held briefly by the library) or direct payment to the instructor?

This distinction is important.

If money paid by the attendees is a direct donation to the Friends, the instructor cannot claim a deduction for it (since it was never their income, it was only ever a donation).

If, on the other hand, the money paid by the attendees is a direct payment to the instructor, it can then be a donation from the instructor and to the Library/Friends.[2] That shouldn’t be a problem, unless the income is not declared.[3]

There is no scenario where the donations collected can become the value of the service that was volunteered, and thus the credit is for “in-kind” services. The IRS doesn’t work that way.[4]

The issue presented here is not rare or esoteric. In fact, it is so common, the IRS has a fancy name for it: the “assignment of income doctrine,” which basically says that if you earn money and immediately give it away, it is still taxable income. 

To clear this up, the member’s “re-wording” suggestion is spot-on. However, before changing the publicity, it would be good to focus on the arrangement, so there is clarity between the instructor, the library, and the Friends. After that, the advertisements can be updated to fit the agreement.

Where can you get such a letter? It is best for a final version to be reviewed by your lawyer, but as it turns out, we occasionally get questions about yoga here. So, two places to start are Live streaming a chair yoga program and Liability Waivers for Library Fitness Programs.

In closing: Yoga is a beautiful activity and a library hosting it is providing a valuable community resource; the law and the IRS should never get in its way. With a careful arrangement, that can happen.

Thank you for a thoughtful question!

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.

Picture the mouse: whiskers a-quiver.[2] It can smell the cheese. It sees the maze.

Picture the cheese: it's yellow, made in upstate New York, and sliced just right. It would be delicious with a whole wheat cracker.

Now picture the maze: so tantalizing. So twisty and turny. There are many paths forward, but only one has a tantalizing dairy product[3] at the end.

Except: there is actually no path to the cheese.

That's what this issue is like.

Here's why:

With a "pass-through", a 501(c)(3) agrees to accept the award of a tax-deductible donation; usually, this is done per the terms of a "pass-through agreement"[4] with a non-501(c)(3) individual or group, for a charitable purpose.

Examples of a pass-through include:

• A school district public library and a local artist agree to jointly apply for a grant from a foundation so an unincorporated artists collective can paint a mural at the library, but the grant is solely to the library, who "passes" the money to the artists' group for the project;
• A municipal public library affiliates (in writing) with a newly incorporated not-for-profit refugee assistance group without a 501(c)(3) to accept a grant for a language assistance program;
• An association library agrees to be a pass-through on a per-project basis for any local group offering programming consistent with the mission of the library; per the letter of agreement by which an organization in the area of service can participate, the administrative fee charged by the library is either 5% of the grant or $1500, whichever is smaller. Participants are tied to a strict set of performance criteria and accounting is set up to ensure documentation is immaculate.[5]

While there are a variety of fiscal and operational procedures that each of these written arrangements would have to follow, each of them shares a common feature—an endgame to the purpose of the pass-through (e.g., the mural is painted, the English-language learners program is launched, and the objective of each "per project basis" is met).

The member who submitted the question rightly highlights the crux of the question here: can this approach be used for unspecified purposes, with the 501(c)(3) accepting tax-deductible donations and then giving it to the non-501(c)(3) entity?

The answer is "No." Here is why:

In the three examples, and other defensible pass-throughs, the donation money going to the unincorporated or non-501(c)(3) entity is conditioned on the objectives set by the grant. In other words, the money is not a gratuity or a donation; it is part of a "quid pro quo" transaction, with the "quo"[6] being consistent with the conditions of the donor.

Accepting unconditional donations to then re-gift them to an unincorporated or non-501(c)(3) entity is a totally different situation from the "quid pro quo."[7] For an association library, it would be frowned upon, but with some careful maneuvering (a written agreement making the Friends an offshoot of the association library's operations), it could be done and properly accounted for in the required financial disclosures.[8] But for a municipal library, with its extra conditions and an absolute bar on just giving away money,[9] there is no way to make the otherwise elegant solution suggested by the member work.

So, the maze of options has no way to get to the cheese. Is there another way?

There is, but it is largely antithetical to the purpose of having a "Friends" group.[10]

Here is the way: the donations to the public library would go to a "Friends Fund" that is 1) always in the custody of the library; 2) managed and expended per all the fiscal controls of the library; and 3) is only distributed to Friends per an agreement that creates defined conditions (the "quid pro quo") , so it is clear the funds have been used "for the benefit of the library."

For example: The board of the ABC Town Library resolves to create a "Friends Fund" for very well-defined parameters, including that when the fund reaches $50,000.00 dollars, the board meets with the Friends to discuss how it will be used. In 2024, 100 people each donate $500.00 tax-deductible dollars to the ABC Town Library's "Friends Fund." The library’s board of trustees then meets with the Friends and passes a resolution to disperse the money with well-defined deliverables, effectively turning the collected funds into a "grant" or even a "contract for services." The grant or contract is then managed per all the same applicable fiscal, operational, and procurement requirements that the library always has to follow.[11]

Of course, by the time a library and friends group go through all that—only to have a structure that is far less flexible than a traditional Friends group—the Friends might want to just take the time to get 501(c)(3) status.[12]

Thank you for a thoughtful question.[13]

In Greek mythology, the "chimera" is an intact, functioning animal boasting the features of other animals: the head of a lion, the body of a goat, and the tail of a serpent (or a dragon, depending on your source).

Libraries are legal chimeras.

In fact, not only are libraries legal chimeras, but depending on the "type" of library, they are each their own, special type of chimera.

For instance, a village public library/chimera would have: the head of a village, the body of a not-for-profit corporation with municipal fur, and the tail of an education corporation as chartered by the Regents.  An association public library, on the other hand, would have: the head of group of local library-loving people, a furless not-for-profit body...and more options for the shape of the tail.

Why all this chimera imagery?  Once we take the member's question out of the cold, harsh light of logic and throw it into the dappled sunlight of myth, it is easier to unpack the confusion underlying their question.[1]

Following our "hybrid mythical animal" analogy, a special district library has: the head of a three-headed dog[2], and, if the authorities determine that it has the power to tax, the tail of a scorpion, which could render it unable to be regarded as a 501(c)(3).

This "power to tax" part is at the heart of the question.

As set out on page 10 of the "2018 Library Trustee Handbook" posted at https://www.nysl.nysed.gov/libdev/trustees/handbook/handbook.pdf, the mythical creature that is a non-association public library (of any kind) can choose to register as a 501(c)(3):

"Public libraries (municipal, school district and special legislative district) are, by definition, a government entity under IRS code, and therefore tax exempt and not 501(c) (3) corporations. However, public libraries may receive a confirmation of tax exempt status from the Internal Revenue Service to use with grant makers and businesses."

But if a special district created by legislation has a scorpion's tail and can levy a tax, they might not even qualify for the "confirmation."

Why is that?  I'll let the IRS (mostly) do the talking[3]:

Examples of entities that may be considered "separately organized" [and thus able to qualify as a 501(c)(3)] include colleges and universities; hospital, housing, or development authorities; public library boards; water or park districts; public school athletic associations; charitable trusts; and organizations created by inter-governmental agreement.

...[But]..

Under Rev. Rul. 60-384, a government entity will not qualify for exemption if it has powers beyond the scope of section 501(c)(3). For example, where an instrumentality exercises substantial enforcement or regulatory powers in the public interest (such as health, welfare, or safety regulation), it will not qualify.

...[for example...]

Example (3): W is a public library board organized under a state statute authorizing it to determine the tax rate needed to support its operations within specific maximum and minimum rates. W does not impose or levy taxes, but submits the tax rate to the county auditor who certifies it to the county adjustment board. The library tax is collected in the same manner as other taxes by the county treasurer, who transmits to the library board its share of tax revenues. Since W does not itself have the power to levy taxes, but only to determine tax rates, it does not have a prohibited governmental power and may qualify for exemption under section 501(c)(3). Rev. Rul. 74-15, 1974-1 C.B. 126. [emphasis added]

On the flip side, the guidance quoted above confirms that once a "special district" has a substantial government power (like taxation), it does not qualify for exemption as a 501(c)(3).

Now, here's where I go out on a limb: most[4] special district libraries do not have the power to tax directly.  That said, there certainly are "districts" in New York that have the power to sting--I mean, to tax--or other powers the IRS has determined disqualifies the entity from qualifying as a 501(c)(3), so a library should assess this issue before deciding what it qualifies for.[5] But generally,[6] special district public libraries rely on municipalities and school districts (and perhaps other taxing authorities) to collect their annual levy...and per IRS guidance, that means they can qualify as a 501(c)(3), just like the Handbook says.

What is the magical formula by which a library can assess what type of chimera it is for tax purposes?  As of this writing[7], the IRS posts that at:

https://www.irs.gov/government-entities/federal-state-local-governments/governmental-information-letter

And since this ATL is all about the IRS, we'll give them the last word (taken from the link above):

As a special service to government entities, IRS will issue a “governmental information letter” free of charge. This letter describes government entity exemption from Federal income tax and cites applicable Internal Revenue Code sections pertaining to deductible contributions and income exclusion.  Most organizations and individuals will accept the governmental information letter as the substantiation they need.  

Government entities can request a governmental information letter by calling 877-829-5500.

So, you can call Charon[8]--uh, the IRS--and ask them to ferry you across into 501(c)(3)land, for free. 

Good luck crossing over the Styx...I mean, conferring with the IRS on your tax-exempt status!

[1] I am not saying the member is confused.  In fact, the question shows they are quite lucid; it's the legal picture that is muddy.

[2] Since it is usually comprised of a combination of other districts and/or municipalities.

[3] The full document is here: https://www.irs.gov/pub/irs-tege/eotopice90.pdf.  If you think I am off the rails with this "chimera" stuff, wait until you see how they distinguish an "entity" from an "instrumentality"!

[4] All?? I want to say all.  But I have learned to avoid absolutes in libraryworld.

[5] The IRS guidance cited states "There are three generally acknowledged sovereign powers: the power to tax, the power of eminent domain, and the police power. An entity is a "political subdivision" only if it has a substantial sovereign power. It need not have all three sovereign powers, but possessing only an insubstantial amount of any or all of the sovereign powers is insufficient."

[6] And by generally, I mean, "insofar as I know" because if there is one thing I have learned about libraries, it is to NEVER assume an absolute.

[7] July 6, 2022.

[8] Why yes...I have been re-reading "D'Aulaire's Book of Greek Myths" with my 8-year-old.

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.

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

Parties
Craft fairs
A charity auction
But being a "Friend" is not all book sales and giant thermometers.  Get out your Excel spreadsheets and prepare to take good notes; for a "Friends" group, raising "charitable" money[1] comes with detailed record-keeping and government oversight.

The "CHAR-500"[2] referenced in the question, an annual filing required of many not-for-profit organizations in New York State, is a major part of state oversight.[3]

A companion requirement—also referenced by the member—is that a not-for-profit register with the New York State Attorney General's Office.

But does every not-for-profit in New York State have to fulfill these requirements?

The answer, which does depend on some of the factors listed in the question, is:

"No.  BUT—." 

Let's review.

There are several factors that can exempt a not-for-profit operating in New York State from having to register and file the CHAR500. 

Of relevance to the member's question is Article 7-A of New York State's Executive Law, which provides:

§ 172-a. Certain persons[4] exempted.

...

2. The following persons shall not be required to register with the attorney general:

...

(d) Any charitable organization which solicits or receives gross contributions of less than twenty-five thousand dollars during a fiscal year of such organization, provided none of its fund raising is carried on by professional fund raisers or fund raising counsel. However, if the gross contributions received by such charitable organization during any fiscal year of such organization shall be in excess of twenty-five thousand dollars, it shall within thirty days after the date it shall have received gross contributions in excess of twenty-five thousand dollars register with the attorney general as required by section one hundred seventy-two of this article.

So, the member is right to point out the relevance of the Friends' annual income (although the trigger amount is $25,000.00, not $50,000.00).

That said, it is important to keep in mind that the reporting requirements of a not-for-profit are not just governed by the Executive Law.[5]  Further, even the Executive Law comes with exceptions: if the organization is using a professional fund-raiser, they will need to register (no matter how much money they take in).

Trying to figure out what to do?  For Friends, this is a good one to confirm with both your attorney and accountant, but in general, it is important to remember the difference between registering, which per Executive Law 172 and 7s-a is triggered when the $25,000 dollar annual income threshold is reached, and annual filing, which per Executive Law 172-b (2-s) is triggered either by registration, or when the first $25,000 dollar annual income is reached, after which a filing is due even in years with smaller income.

Despite this exemption for annual revenue of under $25k, many organizations will register and file the CHAR500 registration because: 1) they aspire to raise more than $25k; 2) they know that potential donors often use the Charities Bureau registration to conduct "due diligence" on potential donees;[6] 3) it is a way to model transparency (and inspire trust).

But to answer the question, in this instance, unless a pro is being used... no, registration is not required.

Thank you for an important question.

[1] Meaning money being raised by a charity, for a charitable purpose.

[2] Which is what I would call my BBQ-themed bar for not-for-profit sector workers, if I were to go into the niche restaurant business.

[3] Found here as of March 14, 2023: https://www.charitiesnys.com/pdfs/statute_booklet.pdf.

[4] As used in this section of the Not-for-profit Corporation law, a "person" is a not-for-profit organization.  I know, it's weird.

[5] The IRS allows certain charitable organizations with under 500K in assets and 200k in annual revenue to file an "EZ" form, rather that the full form 990.  For more on that, visit the IRS at https://www.irs.gov/instructions/i990ez.

[6] That said, not filing when it is not required can signal a commitment to economy and conservation of resources.

This answer comes with many disclaimers, because the legal parameters of room access and rental at chartered libraries in New York is variable territory.  In other words: the answer can depend on the library’s “type” (set by its charter), its fundamental rules (found in the bylaws), its IRS status (the “501 (c)(3) mentioned by the member”), its day-to-day rules (controlled by policies), its lease (not all libraries own the space they occupy), and any deed restrictions (although deed restrictions on the basis of speech would bring concerns).

That’s right: education law, not-for-profit corporation law, tax law, real property law…this question has it all!

That being said, the member’s question centers on federal tax law; specifically, the library’s 501(c)(3) status, which not only makes the library tax-exempt, but allows it to receive tax-deductible donations.  This status is an important fund-raising asset, and its many conditions (including not engaging in politics) cannot be taken lightly.

Here is what IRS Publication 557, the go-to for creating a tax-exempt entity, has to say about political activity:

If any of the activities (whether or not substantial) of your [501(c)(3)] organization consist of participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for public office, your organization won't qualify for tax-exempt status under section 501(c)(3). Such participation or intervention includes the publishing or distributing of statements. Whether your organization is participating or intervening, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Certain voter education activities or public forums conducted in a nonpartisan manner may not be prohibited political activity under section 501(c) (3), while other so-called voter education activities may be prohibited. [emphasis added]

Like many guides from taxing agencies, this one is superficially helpful (I put that part in bold), but upon examination, employs a disclaim that gives very little concrete guidance (I underlined that part).  So, what’s a library with a spare room to do? 

As alluded to in both the member’s question and my opening paragraph, this question doesn’t turn solely on the IRS.  Any 501(c)(3) library that rents or allows free use of space should have a robust “Facility Use Policy”[1] that considers not only IRS regulations, but safety, equal access, and operational priorities (requiring users to clean up after their meeting, to not be noisy, to respect the space).  For a library in a municipally-owned building, care must be taken to ensure use fees are applied in a way that does not violation the NYS Constitution.  And for a library that rents, the Facility Use Policy must harmonize with the lease.

But the member’s question is about 501(c)(3).  So, having established that this consideration is but one of many when giving access to or renting space, here are the three things to consider when a 501(c)(3) rents or gives access to space:

1)  Rental income needs to be a very small percentage of the library’s revenue. 

Section 501(c)(3) requires that income from renting space can’t outweigh donations and other sources of income related to the library’s tax-exempt purpose.  This is something to discuss with the library’s accountant; while rental income isn’t barred, it can bring funding ration and tax consequences that warrant the attention of a professional.

2) The use of the space can’t “inure” to the benefit of any one company or individual.

Section 501(c)(3) also requires that a qualifying organization’s resources can’t directly benefit any one person or entity more than the general public.  For example, free use of the spare room by a person conducting a stained-glass workshop with an admission fee (even a nominal one), can be considered an “inurement.” [2]

3)  As raised by the member’s trustee, the use of the space cannot violate the bar on lobbying (influencing legislation) and political activity (supporting a particular candidate for office).

And as reviewed, Section 501(c)(3) bars political activity (as further defined in the excerpt from 557, above).

“Ask the Lawyer,” has had some fairly large answers, but I don’t have space to address every occurrence that could run afoul of the bar on “political activity.” But what about renting space, on the same terms as to any other entity, to an event like the one described by the member?

Here is what the IRS has to say:[3]

Can a section 501(c)(3) organization conduct business activities with a candidate for public office?

A business activity such as selling or renting of mailing lists, the leasing of office space or the acceptance of paid political advertising may constitute prohibited political campaign activity. Some factors to consider in determining whether an organization is engaged in prohibited political activity campaign include:

a. Whether the good, service or facility is available to candidates in the same election on an equal basis,

b. Whether the good, service or facility is available only to candidates and not to the general public,

c. Whether the fees charged to candidates are at the organization’s customary and usual rates, and

 d. Whether the activity is an ongoing activity of the organization or whether it is conducted only for a particular candidate.

When developing a Facility Use Policy, if a library is a 501(c)(3) charitable organization, and wishes to be able to rent space to (among others) political organizations for event, the above-listed factors should be built right into the policy.

Here is some sample language (some of it will sound familiar):

As a 501(c)(3) organization, the NAME library does not participate or intervene, directly or indirectly, in any political campaign on behalf of (or in opposition to) any candidate for public office depends upon all of the facts and circumstances of each case. Therefore, the use of space in our facility by political organizations or for partisan political events is only available on the same rental terms as for the general public, and is subject to a rental fee that is charged equally to any political group or other individual or group.   NOTE: Certain voter education activities or public forums conducted in a nonpartisan manner may qualify for a fee waiver, just as do other free and open events conducted by a charitable entity for the benefit of the public.

So, what about the member’s scenario?   In the absence of a spot-on facility use policy, I suggest the following process:

1. Using the appropriate tax guidance, the library needs to decide if this particular “Meet the Candidates” event complies with 501(c)(3); in particular, is to be a “public forum conducted in a nonpartisan manner?”  Or is it skewed to benefit one candidate over the other? 

2. Is the sponsoring organization a charitable entity, or is there any risk that the terms for using the room would be an “inurement?”  Will donations be solicited?  Is money charged to enter?

3. If the answer to either shows a risk of violating 501(c)(3), then the library needs to consider if it wants to follow the formula to “do business” with a candidate for public office.  This would mean charging for the use as you would any other use.

If the library’s past practices make following those three steps too blurry, it is best to take a pass on this precise event, and take the time to develop an up-to-date and thorough Facility Use Policy that considers the types of uses the library will allow, and how and when it will charge for them. There are many good models out there to draw inspiration from, but before the board passes such a policy, it would be good to have it reviewed by a lawyer (who has ready the charter, bylaws, other policies, lease, deed, and any other relevant documents).

The member’s library is fortunate to have leadership that is thinking about both the first amendment and safeguarding the organization’s tax status.  Good work.  No matter what the final decision, awareness and commitment to these values serves your community.