Category Archives: Friends of the Library

Acquiring 501(c)(3) Status

Friends of the Library and Library Foundations are excellent groups to help raise money for your library. In order for these organizations to function optimally and to assist with the procurement of grants, it is encouraged for them to obtain a 501(c)(3) status. This means that they are viewed as a tax-exempt nonprofit organization that qualifies as a public charity under IRS Code, Section 501(c)(3). Please seek the aid of an attorney or CPA to assist in the process of obtaining 501(c)(3) status as laws and common practices are subject to change.

The process to achieve 501(c)(3) status can take over 6 months to complete. The IRS has created a guide outlining the Life Cycle of a Public Charity that can help lead you through this process. In order to achieve 501(c)(3) status, the group must do the following:

  1. Create an organizing document that contains the following provisions. More information and sample documents can be found here.
    • Limit the organization’s purpose to one of the exempt purposes listed in Section 501(c)(3) of the Code.
    • State that the organization cannot engage in activities that don’t advance the exempt purpose.
    • State that the assets of the organization (money, property, etc.), will be dedicated permanently to the exempt purpose listed.
  2. Establish a Board of Directors and create bylaws for the group.
  3. Once the organization is legally established (see page 9 of IRS Publication 4220), obtain an Employer Identification Number (EIN) from the IRS online, by mail, or by phone (1-800-829-4933). Applying for an EIN triggers filing requirements, so do not complete this step until you are prepared to move forward with your other forms.
  4. File Articles of Incorporation for the group with the State of North Dakota as per NDCC 10-33. The paperwork can be found here. There is a $40 filing fee that must accompany the completed form. The ND Secretary of State Office and other state agencies created a guide to beginning and maintaining a nonprofit corporation in ND that can be found here.
  5. Submit the IRS Form 1023-EZ or Form 1023 depending on your eligibility. Eligibility can be determined using the worksheet in the 1023-EZ directions. Directions for the forms can be found here (1023-EZ) or here (1023).

**You may be exempt from this requirement if your organization has gross receipts in each taxable year that are normally not more than $5,000. Please see http://bit.ly/2REnkD0 for more details.**

  1. Before the group can solicit contributions, it may need to be registered as a charitable organization through the North Dakota Secretary of State’s office as per NDCC 50-22. That process can be found here.
  2. The organization will need to follow the tax-code for a 501(c)(3) during the time that their application is in processing. See the IRS page “Tax Law Compliance before Exempt Status is Recognized” for more information. All bank accounts, books, and records for the group need to be separate from the library’s records.

 

Once the group has acquired 501(c)(3) status, they will need to follow all state and federal filing guidelines to maintain that status. This includes the annual filing of Form 990 and other, unrelated income tax filings, state filings, charitable solicitations reporting, donation substantiation reporting, etc. Additionally, records should be kept for things such as executive compensation, transactions with board members, sources of revenue, accomplishments, expense allocations, details of investments, and organization structure. These things help assure that the group will maintain annual compliance. Most records of the 501(c)(3) group will be subject to public disclosure requirements.

 

Helpful Links:

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Friends of the Library Resources:

Friends of the Library help support libraries in many ways including volunteer services, fund raising, programming, and advocating for their library. The following resources are helpful whether your library is starting a Friends group, restructuring, or looking to grow.

Resources:

Nebraska Public Libraries Friends and Foundations: https://bit.ly/2IqzT0d

Nebraska Public Libraries Friends of the Library Groups: https://bit.ly/2GpGGpa

United for Libraries Toolkits for Friends Groups and Foundations (use your library’s access credentials to log in): https://bit.ly/2wQNCw5

Sample Memorandum of Understanding from ALTAFF: https://bit.ly/2rPTG2I

Tool Kit for Building a Library Friends Group by Friends of Tennessee Libraries: https://bit.ly/2k41s4T

Wisconsin Department of Public Instruction—Library Friends and Library Foundations: https://bit.ly/2wNDzYx

Connecticut State Library Roles and Responsibilities of Library Director, Board, and Friends: http://bit.ly/2RwMvah

 

Examples of Friends Bylaws:

Friends of the West Fargo Public Library: https://bit.ly/2yUoB3R

Friends of the Bismarck Public Library: https://bit.ly/2InJTLD

Starting a Friends of the Library Group

friend

Let’s face it – life is better when we have good friends to enjoy it with. Friends are always there to help us when we need a hand, and to support the many endeavors we may take on. In the same way, friends are a great asset to libraries. Many libraries have established Friends of the Library groups to support their activities and services. Friends groups exist to provide support to libraries in a variety of ways, from fundraising and volunteer services, to program support and advocating for the library in the community. Friends groups make a huge difference for libraries of all types, though they are most common in public libraries. If your library has an active, helpful friends group, good for you! It’s great to know that you have a built-in group of supporters who are ready to pitch in to help and to raise their voices in support of the library when the need arises.  If you’re interested in getting a friends group started at your library in North Dakota, we’re here to help!  Continue reading

Thank You for Being a Friend

Friends of the Library groups are a great benefit to libraries through their fundraising projects, volunteer support, and advocacy efforts in the community. Friends can be a voice for the library in the community, as well as extra brains and hands to help with programs, projects, and other efforts at the library. Whether your library is considering starting a friends group, or already has a thriving group of friends working on its behalf, you may find that your group needs a hand, information, or good advice from time to time.

United for Libraries

United for Libraries, ALA’s Association of Library Trustees, Advocates, Friends and Foundations, provides support for citizens who promote, advocate, and fundraise for libraries of all types. One of the  many great resources on their site is a collection of Friends and Foundation Fact Sheets. The Fact Sheets cover such topics as:

United For Libraries’ Fact Sheets can be a great help for friends groups and libraries as they work together to build a great working relationship and build support for the library in the community.