Kentucky Department for Libraries and Archives

Friends & Foundations

Friends of the Library Groups and Library Foundations

​As governmental entities, libraries are 170(c)(1) tax-exempt entities. With this status, donations to the library may offer tax advantages to the donor. As a governmental entity, a library cannot itself have a 501(c)(3) status. Many libraries, rather than be directly involved in fundraising events, are supported by a local Friends of the Library Group or Library Foundation. Such groups, usually with 501(c)( 3) status, maintain their own funds and use them to assist the library. Some grants require a 501(c)(3) tax-exempt status; having a Friends Group spearheading grant applications can be quite beneficial.

Friends Groups or Foundations should be organized as a completely separate entity from the library. Otherwise, they will be subject to the same laws and regulations as the library. In order to avoid violation of any state or federal laws on soliciting charitable donations, before starting a major fundraising campaign or establishing a Friends of the Library Group or Library Foundation, the library board should consult an attorney to determine the proper procedure.

Friends of the Library Groups

Friends of the Library Groups (aka Friends Groups) are non-profit charitable groups formed to support libraries in their communities. Individuals who join the Friends of the Library Group are interested in providing support for the programs and services of their local public library . They are volunteers working with the library —staff and trustees —to provide grassroots support . A Friends Group is limited only by imagination of the members and by the charge under which the group operates.

Some of the most commonly cited benefits for the library (and the community) include:
  • Increasing appreciation for library personnel and services
  • Heightening understanding of the function and operation of the library
  • Expanding services and programs with the assistance of volunteers
  • Increasing bequests, donations, and gifts
  • Campaigning to fund additional acquisition of library materials and equipment
  • Broadening support for library issues and/or challenges (e.g., referendum, intellectual freedom, funding)
  • Enhancing community involvement

A Friends of the Library Group usually has a 501(c)(3) designation from the IRS (Internal Revenue Service) and is registered with the Secretary of State’s office. The Friends Group may be under the “umbrella” of another group with designation as a charity, such as a local community foundation. A 501(c)(3) designation provides official recognition and enables people to make donations with certain tax advantages. Before a Friends Group is initiated for your library, the primary mission and function should be determined. Involve the library board, staff and committed community members in this important discussion.

The Friends of the Library Group should not be formed based on a vote by the library board, though the board may vote to allow a member of the community to coordinate establishment of the organization. If it were to be created by a library board vote, the Friends Group would always be considered an arm of the library and would be subject to the same laws and regulations of the library. This would limit the ability of the group to raise and expend funds as it may wish, and may keep the group from achieving 501(c) (3) status .

Best practices for Friends of the Library Groups include:

  • Obtain 501(c)(3) status
  • Maintain an arm's-length relationship with the library
  • Considerably easier to create than a Foundation and set up cost is minimal
  • Identify a well-respected community member to oversee formation of the group
  • Create articles of incorporation, bylaws, and appoint or elect officers
  • Contact the Friends of Kentucky Libraries for support and advice
  • Safeguard the library’s name in fundraising and in other areas by agreement with the group regarding the use of the library name and disposition of any funds collected utilizing the library name (or any derivation of that name)
  • When independent from the board, the group is not subject to state purchasing guidelines
  • Do not use library funds to establish the group

Library Foundations

Like Friends Groups, a Library Foundation is a separate legal entity formed for the purpose of enhancing and expanding library programs and services. Library Foundations typically assist large library systems raise large sums of money through ongoing, high-end fundraising efforts. For most libraries, a Friends of the Library Group may be the best way to organize library supporters to increase awareness and to raise funds for library projects. See note on
Tax Exempt Status.​​

 [reviewed 5/5/2021]