Special Copyright Provisions for Certain Nonprofits

As discussed in our prior article, use of a copyrighted work by a nonprofit organization will not usually qualify as a fair use. However, several statutory provisions of the Copyright Act (17 U.S.C. § 101 et seq.) allow certain nonprofit organizations to use copyrighted works without obtaining the copyright owner’s permission. Most of those provisions have very technical requirements and apply to limited circumstances. Before relying on one of those provisions, the nonprofit organization should review all statutory requirements to make sure its use qualifies. One of the more useful provisions allows a nonprofit organization to perform a nondramatic literary or musical work at fundraisers. In order to qualify for this provision, no admission fees can be charged at the showing, those performing the work must do so at no charge, and all proceeds from the performance, such as donations, must be used exclusively for charitable purposes. 

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Group Exemption Letters to Become More Restrictive

Proposed changes to IRS group exemption letters could result in organizations needing to re-structure their operations or seek new exemption rulings from the IRS.  In Notice 2020-36 (available here), the IRS announced that as of June 17, 2020, it would no longer accept applications for group rulings under Rev. Proc. 80-27.  All applications for group rulings after that date would be decided under a new final revenue procedure or other IRS guidance.  Exempt organizations covered under a group letter should review the proposed changes and make plans now to comply with the changes once they become final. 

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