Open Meeting Law Complaint filed by Henry Sorett
The Commonwealth of Massachusetts
Office of the Attorney General
One Ashburton Place
Boston, Massachusetts 02108
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OPEN MEETING LAW COMPLAINT FORM
Office of the Attorney General
One Ashburton Place
Boston, MA 02108
Please note that all fields are required unless otherwise noted.
Your Contact Information:
58 Longfellow Road
Sudbury, MA 01776
Are you filing the complaint in your capacity as an individual, representative of an organization, or media?
Public Body that is the subject of this complaint:
Name of Public Body: Board of Trustees of the Goodnow Library
Specific person(s), if any, you allege committed the violation:
The entire board and its chair, Ingrid Mayyasi
Date of alleged violation: 19 January 2021
Description of alleged violation:
Describe the alleged violation that this complaint is about. If you believe the alleged violation was intentional, please say so and include the reasons supporting your belief.
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On January 19, 2021, the Board of Trustees held a meeting via Zoom noticed to consider their relationship with the Friends of the Goodnow Library, Inc. ("Friends") The meeting commenced at approximately 6:30 p.m. Without allowing anyone to comment, the Trustees announced their conclusions, voted to disassociate with the Friends and purported to order the Friends not to use the Goodnow Library name further. There were no deliberations and none of the people who had asked to be heard were permitted to speak until after the vote. I and several others spoke in opposition to the Trustees' action but our comments made no difference to the Trustees who had obviously reached their decision outside of this meeting. The meeting concluded at approximately 7:45 p.m. The Trustees issued a formal written statement at 8:30 p.m. which had obviously been written prior to the meeting. The "public" meeting on January 19, 2021was not the time or place where deliberations over this issue actually occurred and the outcome was a foregone conclusion. The Sudbury Town Clerk advises that the Trustees did not hold a duly convened executive session prior to this meeting.
Before this meeting, the Friends were served with a demand that they surrender their funds and their independence as a separate 501(c)(3) entity and turn over their funds to the Library with a proposed memorandum of understanding ("MOU"). The Friends responded with a counter proposed MOU based on mutual respect, recognizing that the Friends is an independent entity with its own fiduciary obligations. In the "public" meeting, the Trustees did not debate the merits of the Friends' proposal.
The January 19, 2021 "public" meeting's outcome had obviously been discussed amongst the Trustees without compliance with the requirements of the Open Meeting Law.
What action do you want the public body to take in response to your complaint?
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1) The Trustees must admit their violation of the Open Meeting Law and apologize. (2) Void the action taken as to the Friends. (3) Engage in a public process and a mediation to resolve any disagreements that might exist, recognizing the Friends' independent 501(c)(3) status, the work that Friends' volunteers have provided to the Library and the monies that the Friends have donated to the Library. (4) Commit to handling all future discussions in accordance with the Open Meeting Law.
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Cover Letter from the Friends of the Goodnow Library to the Trustees of the Goodnow Library
To: The Trustees of the Goodnow Library
From: The Friends of the Goodnow Library, Inc.
February 9, 2021
Your letter to the officers of the Friends of the Goodnow Library, Inc., dated January 20, 2021, raised a number of issues that needed to be reviewed by our legal counsel, who is a nonprofit attorney. We initially sought out legal advice to ensure that we were interpreting all of our 501(c)(3) obligations correctly, and we have asked our attorney to share her legal opinion so that you can see what our obligations have been and continue to be, regardless of our relationship with the Library. Based on our interactions with the Trustees during the past two years, including the recent public statement following the severing our the relationship with the Friends, it has appeared that the Trustees believe (i) the Trustees, as an elected body, are superior to the Friends and exercise control over the Friends; and (ii) the Friends raise money and merely serve as a conduit for these funds to the Library for use by the Library Director at her sole discretion. Both of these premises have been and continue to be incorrect, as explained in the attached legal opinion.
Pursuant to our charter, it is still our mission to support the Library, and we intend to continue this effort. We will continue to act as a fiduciary for the funds donated to us and will dispense them as we see fit. We have and will continue to be transparent with our donors as we navigate the aftermath of the Trustee’s unilateral decision.
cc: Henry Hayes, Town Manager
Jonathan Silverstein, Town Counsel
Janie Dretler, Chairman, Select Board
Dan Carty, Library Liaison, Select Board
Esme Green, Library Director
Legal Opinion of Status of the Friends of the Goodnow Library
February 02, 2021
To the Board of Directors of the Friends of the Goodnow Library, Inc.:
This letter provides a legal opinion regarding the independent status of the Friends of the Goodnow Library, Inc. (the “Friends”) under relevant law, both generally and, specifically, in its relationship to the Goodnow Library (the “Library”), the public library of the town of Sudbury, Massachusetts. The letter also addresses certain points made in a letter dated January 20, 2021 (the “January 20 letter”), from the Library Board of Trustees (the “Trustees”) to Alice Levine, President of the Friends.
Corporate Status; Fiduciary Duties of Directors and Officers
The Friends was incorporated in 1988 as a nonprofit corporation under Mass. Gen. Laws Chapter 180, the primary statute governing nonprofit corporations in Massachusetts. As a nonprofit corporation, the Friends has an independent legal existence with all the rights and powers afforded to a corporation by law and provided for under the Friends’ Articles of Organization. The Friends is not a subsidiary of, or under the control of, any corporation, government instrumentality or other entity. In contrast to the Goodnow Library Foundation, Inc., which was created by the Library and whose board of directors is elected by the Trustees, the Friends was incorporated by a private individual and is governed by an independent, self-perpetuating board of directors.
The Friends’ corporate form creates responsibilities in its governing body. As members of its governing board, the Friends’ directors are required to act prudently and in good faith, in a manner they reasonably believe to be in the best interests of the organization. Not only the directors but also the officers of the Friends have fiduciary duties to the organization as prescribed by the law of corporations. The duty of loyalty requires directors and officers to act with undivided loyalty in the best interest of the Friends. The duty of care obliges directors and officers to act with reasonable prudence, exercising independent judgment, making careful and informed decisions and assuming an active role throughout the decision-making process.
One of the main areas in which directors and officers exercise the duties of loyalty and care is the stewardship of funds. The Friends’ board must carefully maintain and invest the organization’s assets and may expend the assets only in a way that is consistent with the Friends’ charitable purposes, as set forth in its Articles of Organization. As you know, in its simplest form, the Friends’ charitable purpose is to benefit the Library. But, in fact, as stated in its Articles of Organization, the Friends’ purpose is broad and multi-faceted, including stimulating “public interest in the Goodnow Library,” promoting “increased knowledge and understanding of its resources, services and needs,” soliciting “contributions, endowments and bequests,” and undertaking related activities that are consistent with its status as a tax-exempt 501(c)(3) organization. Only one of the Friends’ stated purposes, “undertaking purchases of non-budgeted library equipment,” expressly involves direct financial assistance to the Library. A careful reading of the Friends’ legal statement of purpose suggests that the Friends exists more to stimulate public interest in and increase knowledge of the Goodnow Library in Sudbury and beyond than to raise funds and give them to the Library. The Friends seems to have been formed to serve as the public face of the Library, not merely its fundraising arm.
The duty of the Friends’ directors and officers, then, is to steward the organization’s funds and spend them in furtherance of the Friends’ charitable purposes, which may include a broad array of programs and activities that support and promote the Library. Exercising their duty of loyalty, the Friends’ officers and directors are required to make decisions about expenditures out of loyalty to the Friends, not to the Library or the community, although the Library and the community will benefit from the Friends’ expenditures. The duty of care also requires the directors and officers to participate actively, exercise independent judgment and make careful and informed decision in spending the Friends’ funds, not to simply disburse the funds to the Library.
Restricted vs. Earmarked Gifts
An additional legal consideration in the Friends board’s stewardship of the organization’s funds is the intent of donors who contributed the funds. Many, if not most, of the funds raised by the Friends, including funds raised through book sales and trivia nights as well as from membership dues, are contributed for the Friends’ general purposes. These funds must be used for the Friends’ stated charitable purposes, but within those purposes can be expended in a variety of ways. Permissible uses of these funds would include maintaining the Friends’ website, hiring independent contractors or even staff, and funding further fundraising activities. Using donated funds to promote “public interest in the Goodnow Library” and “increased knowledge and understanding” of the Library is also squarely within the Friends’ charitable purposes and benefits the Library. The Trustees are not incorrect in asserting in their January 20 letter that funds contributed to the Friends are solicited and donated for the purpose of benefiting the Library. However, the January 20 letter also asserts that the only use consistent with the intent of donors is to transfer the funds immediately to the Library. Not only are there many ways of using donated funds to benefit the Library that are consistent with the intent of the Friends’ donors, but, as discussed further below, to simply hand over the funds would be inconsistent with the Friends’ independent corporate and 501(c)(3) status and with its board’s fiduciary duty to steward the funds prudently. Benefitting the Library is at the core of the Friends’ charitable purposes, but since these purposes allow for a variety of ways of benefitting the Library, the Friends can further these purposes without being compelled to simply release its funds to the Library.
In addition to funds given to the Friends for its general purposes, the Friends may occasionally accept donations that are for restricted purposes. To date, the Friends has not received any restricted gifts. If it held restricted gifts, the restrictions attached to such donations would be enforceable under Massachusetts law. However, it is important to distinguish between donations that are restricted and donations that are earmarked. Donations may be restricted, for example, to supporting children’s programs or landscaping at the Library. Such gifts must be expended by the Friends for the designated purpose in accordance with the donor’s intent. However, the Friends’ board of directors still exercises discretion and control over aspects of a restricted gift that do not carry a restriction. For example, a gift restricted for supporting children’s programming at the Library is restricted as to purpose but may be unrestricted as to the timing of its expenditure. The Friends must expend the gift to support the Library’s children’s programming, but the Friends’ board retains discretion not only over which children’s programs to fund but also over the timing of the funding. Conversely, a gift may be restricted as to timing, requiring for example that the funds be expended during the current fiscal year, but it may carry only a broad purpose restriction, such as “for expenses of the Library that will enable it to operate during the current pandemic.” For such a gift, the Friends would be obligated to spend the funds within the current fiscal year but could exercise discretion regarding the specific Library expenses to fund.
The reason that the Friends retains some discretion and control in spending even a restricted gift is that this discretion and control are the right and responsibility of an independent nonprofit corporation. A gift over which the Friends does not exercise discretion and control is an earmarked gift, not a restricted gift. The Friends may not and does not accept earmarked gifts. To accept earmarked gifts, simply passing funds along to the Library, would be to allow itself to be treated as a mere conduit, a status that is inconsistent with the independent legal status of the Friends as a nonprofit corporation with its own charitable purposes. Further, in allowing the Friends to be treated as a conduit, the board of directors would be abrogating its fiduciary duties to the organization. The duty of care requires the directors to be deliberate and to exercise independent judgment in spending the organization’s funds, and the duty of loyalty requires them to maintain undivided loyalty to the Friends as an independent organization benefitting the Library. Thus, the Friends board of directors not only has the right to exercise discretion and control over any aspect of the expenditure of funds that is not legally restricted, but it also has the responsibility to exercise this discretion and control. To allow itself to be treated as a mere conduit would be contrary to the responsibilities of the board and to the independent legal status of the organization.
In addition to its legal status as a Massachusetts nonprofit corporation, the Friends is also a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code. Under the 501(c)(3) rules, the Friends is required to exercise the same level of discretion and control as under Massachusetts law governing nonprofit corporations. A 501(c)(3) organization may not act as a mere conduit, and in fact the IRS has in some cases revoked the tax-exempt status of organizations that allowed themselves to be treated as conduits. Beyond this general rule, there are two specific considerations that underline the Friends’ independent status.
The first consideration is the 501(c)(3) sub-category under which the IRS has classified the Friends. The Friends’ letter of determination, issued by the IRS in 1989, grants 501(c)(3) status to the Friends and also categorizes it as a “supporting organization.” This categorization is the result of the Friends’ mission to benefit the Library as expressed in its Articles of Organization, but it is also associated with a particular funding pattern. Supporting organizations, like private foundations, typically receive most of their funds from a small number of sources, and for this reason they are subject to special rules within the framework of the 501(c)(3) rules. Because the Friends is funded by many donations from the general public, it does not fit this category and, in fact, qualifies as a “publicly-supported” organization, the broadest and most independent category under the 501(c)(3) classification. The IRS does not require a formal ruling in order for an organization to transition from supporting organization to publicly-supported charity status; this change can simply be made by demonstrating that the organization meets the “public support test,” which the Friends did on its most recently filed Form 990. As you know, we have nevertheless applied to the IRS for a new determination letter categorizing the Friends as a publicly-supported organization. The application has been delayed because of a backlog at the IRS, but there is little doubt that the IRS will issue the letter. Once this letter has been issued, the Friends will be officially recognized in publicly available sources as an independent publicly-supported organization. The Friends’ mission will still be tied to the Library, but the organization will no longer carry the label “supporting organization.”
The second consideration related to the Friends’ 501(c)(3) status is the deductibility of your donors’ contributions. Many donors to the Friends undoubtedly deduct their contributions on their income tax returns; individual as well as corporate donors are permitted to take these deductions. Some contributions come in the form of charitable bequests, which are deductible for estate tax purposes. In making their gifts, your donors rely on your 501(c)(3) status as well as on the well-known requirements – familiar not only to donors but to their accountants and other advisors – for making tax-deductible contributions. In order for donors to receive this financial benefit, however, the 501(c)(3) organization to which the contributions are made must exercise discretion and control over the donated funds and, again, may not be a mere conduit. The IRS has established this clearly and repeatedly:
“[A] deduction will be allowed if it is established that the gift is intended by the donor for the use of the charitable organization. The test is whether the organization has full control of the donated funds, and discretion as to their use, to ensure that they will be used to carry out the charitable organization's functions and purposes.” (See Rev. Rul. 62-113, 1962-1 C.B. 10.)
If a 501(c)(3) organization merely collects funds and transfers them to another entity, donors to that organization are not permitted to deduct their contributions. Once again, it is not only the right but the responsibility of the Friends and its fiduciaries to ensure that the organization exercises the requisite control over its assets to ensure that its donors’ contributions continue to be tax-deductible.
The January 20 letter also requests that the Friends “cease and desist from any and all fundraising efforts in the name of or for the stated basis of benefitting the Library.” Anyone can raise funds to support the Goodnow Library or any other public institution. Just as it can continue to conduct activities and expend funds to further its charitable purposes of benefitting and supporting the Library, the Friends can also continue to raise funds for this purpose – its own charitable purpose. This is fully within the board’s discretion and control. The only basis for the Trustees’ request would seem to be that the Friends’ activities are carried out “in the name” of the Library – a name the Friends has shared since its incorporation more than thirty years ago. The Friends does not raise funds “in the name of” the Library. It raises funds in its own name.
In sum, the Friends is an independent nonprofit corporation and 501(c)(3) publicly-supported charity, and its board of directors has sole discretion and control in conducting activities and expending funds consistent with its donors’ intent and in furtherance of its own charitable purposes, which are – in a whole host of ways – to benefit and support the Goodnow Library. That benefit and support cannot be delegated to the Library director or anyone else.
Shocked in California
I'm with the Friends of the Sebastopol Library in California, and I was shocked to read of your experience with library administration! We received a similar demand letter from OUR administration last year, and while they backed away (for now), I was incensed that anyone could even THINK about invading a 501 (c) (3) nonprofit, seizing control of it and stealing their hard-earned money.
I absolutely support your stand, and am convinced Friends groups who WON'T sign MOUs need to organize and FIGHT!
Stand Your Ground
Hello Friends of the Goodnow library.
I am a past president of the Friends of the Bigelow library in Clinton MA. I have read everything you posted and am appalled at the actions the trustees have taken. You seem to have everything you need for anyone to understand who the Friends are and what the Friends do.
Stand your ground. This whole debacle sounds like a takeover which is absurd. And of course money has reared its ugly head.
You have my support and I am sure many other Friends groups will feel the same.
Dear Members of the Board of Trustees and Director Esme Green,
I attended the recent Trustees meeting and spoke during the public comment period. Since then, I have reviewed the past meetings that are available on SudburyTV. I have also reviewed the role of a 501c3 organization.
After watching your meeting from December 1st, I was hopeful that you wanted to resolve the situation. At that meeting, various members discussed getting the full board of the Trustees and the full board of the Friends together for a meeting and discuss the issues. Some of you asked for specifics. One of you mentioned that Alice Levine was in attendance. You could have asked her then to have a conversation, but you didn't. The next meeting was January 19th and there was no discussion with the Friends. There were statements made, but that is not a discussion. The contents of the MOUs are not public so I can't comment on the discrepancies. According to the Friends, after reaching out to other library friends groups in MA, only 3 of the 24 responses indicated they have MOUs. According to the Trustees, all libraries have MOUs with their Friends organization. MOUs aren't the beginning of repairing a relationship, it is the result of a repaired relationship.
The Friends is a 501c3 independent private organization. By this, they are governed by state and federal tax laws. They have the following requirements:
- Have one public meeting a year - all other meetings can be private for members only.
- Elected board members are publicly known and they have fiduciary responsibilities for how the money is used.
- Publish annual financial statement (IRS Form 990).
- All donations must be used, after expenses, to the ultimate benefit of the Goodnow Library.
- Receive grant requests and respond to these requests.
- Grantees should expect to submit requests, followed by grant reports to show how the money was used and potentially return any unused money. This process could take many forms.
- Goodnow Library is the only allowed grantee for the Friends group.
I have heard several demands from the Director and the Trustees that are not appropriate:
- the Director should be an ex-officio member of the Friends board. This would be a conflict of interest. The Friends is an independent organization.
- Members of the Trustees demanded to attend Friends private meetings. This is also inappropriate. The private meetings are for members of the Friends only. The public can only attend their public meetings.
- The Director/Trustees demand monthly financial statements from the Friends. This is inappropriate also. As grantees, the Director/Trustees can request funds, but the Friends are ultimately responsible for the decision to fund any grant request. The Director/Trustees have no right to know detailed finances other than what's publicly released. The Friends don't report to the Director.
- The Friends should pay to use the Library space. This seems counterproductive. Any fee that the Friends incurs to do their work would count as an expense and therefore would limit the funds available to respond to grant requests from the Library. The Library would receive the rental revenue, but that couldn't then be used for programs. You would literally be taking money from yourself.
- The Friends are subordinate to the Trustees. This is not true. The Friends is independent of the Trustees and the Director.
- The Friends should turn over all their money to the Library. This is not appropriate. By law, a 501c3 can not simply be a conduit to give money to a public organization. The Friends have fiduciary responsibility and this demand would violate their responsibility.
- The Friends should not use the Goodnow Library name and should stop fundraising. This is inappropriate. The name of the Friends is their incorporated name. They are responsible for their own fundraising. Any money they raise, must be used, after expenses, to the ultimate benefit of Goodnow Library. The Trustees don't control the Friends.
The Goodnow Library is lucky to have two 501c3 organizations focused on supporting their mission. Based on what I can see from the public meetings, the lines have been blurred between the Library/Trustees and the Friends. I suggest everyone step back, revisit those lines and start from there. The Director/Trustees can't control the Friends, but they can recreate a working relationship that is based on the joint mission of supporting the Library.
The Goodnow Library is a cornerstone of our community and the Friends of Goodnow Library have been part of the fabric of Sudbury for over 30 years. Severing the ties with the Friends is completely unacceptable.
578 Peakham Road
A Tear in the Community
What really happened that ended up with the Goodnow Library Board of Trustees severing their relationship with the Friends of the Goodnow Library on January 19, 2021?
Here are the facts: In February 2020, the Trustees asked the Friends to sign a Memorandum of Understanding (MoU) “as the minimum requirement for the Friends to continue to have the support of the (Library) Director and Trustees”. The MoU was drafted by the Trustees without input from the Friends. It would have changed the Friends into a mere conduit for private money to flow to the Library, and drastically changed the way the Friends had operated for more than 30 years. It would have effectively given control over financial and administrative operation to the Trustees and the Library Director, and ended their status as a tax-exempt charity. The Friends declined to sign the MoU as drafted.
Mediation was proposed to attempt to reach common ground. A mediation session in March, 2020, was a helpful first step. Further mediation sessions were contemplated, but Covid-19 intervened.
In October the Trustees sent the same MoU to the Friends insisting that it be signed promptly “as the minimum requirement for the friends to continue to have the support of the Director and Trustees”. The Friends proposed resuming mediation, virtually. I know. I was the mediator. The Trustees refused to resume mediation, until after the Friends signed the MoU, something the Trustees knew the Friends could not do.
The Friends proposed a modified MoU, one that would not have destroyed their independence and their charitable status, however, the Trustees rejected it, without consulting the Friends.
The Trustees then used the Friends’ refusal to sign the Trustee-proposed MoU as a pretext for claiming the Friends were not cooperative, and then severed relations.
Until this recent action by the Trustees, most Sudbury residents were the beneficiaries of a working relationship among the Trustees, the Friends, and the Library. There is now a tear in the fabric of our community. Such tears are hard to heal, and I suspect many readers of this letter may feel similarly.
I urge the Trustees to reverse their decision and return to mediation, with me or someone else. With the benefits the Friends have provided in mind, and a full measure of accommodation brought to bear, the Town’s reputation as a unified community can be renewed.
Restore the relationship between the Friends Board and the Library Trustees
On behalf of the Board of Directors of the Friends of Sudbury Senior Citizens, Inc., I am writing to express our outrage at the unprecedented actions taken by the Goodnow Library Trustees and staff regarding the termination of relationship with the Friends of the Goodnow Library and attempting to confiscate their funds.
The Friends of both town entities, the library and the senior center, are independent 501(c)(3) charitable organizations whose mission is to support their respective beneficiary organizations and thus play a vital role in raising money to support the programs and activities in both these fine institutions.
Friends groups throughout the nation work closely with the staff of the supported organizations to raise and allocate funds for uses consistent with the Friends’ missions.
Friends groups raise these funds from community members with the understanding that the money will be applied to the needs of the supported organization as each Friends’ Board determines. Friends groups operate as fiduciaries to ensure that the money they raise will be properly applied by the supported organization pursuant to the Friends’ mission.
The Trustees statement that the Friends are somehow the beneficiaries of the library is patently false. It is the Library Trustees that is the beneficiary of the work of the Friends. The beneficiaries are always the supported organizations. This is true in Sudbury and throughout the country.
Therefore, it is simply astonishing that the Library Trustees would summarily terminate its relationship with their own Friends for no clearly apparent reason. The Library Friends have consistently demonstrated their commitment to programs and activities at the library, and to conclude the library is better off without their support is short-sighted and highly suspect of poor judgement on the part of the Trustees.
We urge the Library Trustees to reconsider their decision to terminate their relationship with the Friends of the Library and make a better, good faith effort to restore the relationship between the Friends Board and the Library Trustees and staff.
Robert H. Diefenbacher
President, Friends of Sudbury Senior Citizens Inc.
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