Nonprofit Use of Intellectual Property: Copyright Infringement or Fair Use?
Many nonprofit organizations are interested in having a welcoming website with images, logos, and education resources. When deciding whether to use a particular graphic, it is important for nonprofit organizations to be aware of the difference between copyright infringement and fair use when they are using material they do not own.
It is a common misconception that nonprofits are not subject to copyright infringement because the materials they use are not for commercial or for-profit purposes. Although the non-commercial use of materials may weigh in favor of a nonprofit to not be subject to copyright infringement, that is not always the case. It is vital that nonprofits keep track of the material they use because there are penalties for copyright infringement that could greatly impact an organization. Below are some common questions a nonprofit might have regarding copyright infringement and fair use.
If you have questions about trademarks and non-profit organizations or would like to begin the process, call a knowledgeable attorney at Abelaj Law, P.C. at 212-328-9568.
An Intention to Commit Copyright Infringement is Not Required for Liability
An organization can be liable for copyright infringement even if it did not know the material was copyrighted or that, in order to use the material, they needed to gain permission from the owner. A nonprofit can be exposed to vicarious copyright infringement even when the organization itself or its employees do not know they are using copyrighted material. This means a nonprofit is responsible for any harmful actions its employee commits, which includes using copyrighted material they do not own.
Fair Use Doctrine Does Not Automatically Protect Nonprofits from Copyright Infringement
Fair use allows a person to use a portion of copyrighted work that they do not own without permission from the owner to use the material. Nonprofit status, on its own, does not give the organization permission to use copyrighted material without permission under the fair use doctrine. However, if the nonprofit is using the copyrighted material for non-commercial use, such as using an image to promote a program or event that the organization is hosting, may weigh in its favor in determining whether fair use is applicable.
Factors Considered to Determine if the Use is Fair Use or Copyright Infringement
Determining whether something is fair use is not a “one size fits all” test. Courts will look at each individual case to evaluate whether an organization committed copyright infringement or if it is fair use. Because each nonprofit is unique and uses materials differently, the courts will review each organization’s circumstances when making its determination.
There are four factors that courts use to evaluate whether something is fair use or not[1]:
- Purpose and Commercial Nature. The purpose and character of the copyrighted material. This includes whether the material was used to commercial nature or is for nonprofit educational purposes.
- Unique or Factual Nature of the Original Work. The nature of the copyrighted work. Here, the court will shift its focus onto the original work (the initial material that the nonprofit used) to see if it has a lot of creative expression, whether it has been published, and if the original work incorporates primarily factually information like a news story.
- Portion of Original Work Used by Nonprofit. The amount of the copyrighted portion the nonprofit used in relation to the original work as a whole. Here, the court will look at how the nonprofit used the material and ask: Did the nonprofit only take a portion of the material? How much of the original material did the nonprofit use? Did the nonprofit take the original material and incorporate it into some of its own material?
- Economic Damages to Original Work. Finally, the Court will consider the effect of the market value of the copyrighted work. Many nonprofits might not think this last factor would apply to them, but that is just a myth. When evaluating this final factor, the court might look whether any economic harm has been done to the copyright owner and if the material the nonprofit is using is a substitute for the original owner of the material’s marketplace. This might be more common for nonprofits that operate in the healthcare, education, or arts sectors because they may be publishing or distributing more informational materials on their website.
Using Small Portion of Copyrighted Work May be Allowed
If a nonprofit takes a small amount of copyrighted work, a court might rule in favor of the nonprofit by stating they had a de minimis taking. This means that the nonprofit took an insignificant amount of the copyrighted material, and that no harm was done, even if it was taken without permission from the owner.
Although using a small portion of a copyrighted work without permission may mean no penalty, it is not a best practice to do so. A nonprofit should not get into the habit of taking small portions of other people’s copyrighted materials without their permission from the owner. Securing permission from the owner, rather than relying on de minimis taking, is the safest option as it will protect the organization from copyright infringement penalties.
Penalties for Copyright Infringement are Steep
Penalties for copyright infringement can be significant to a nonprofit. A court may order a nonprofit to pay actual damages, such as any profits the owner lost, statutory damages between $750 – $30,000, or in the case of a nonprofit’s willful copyright infringement, it can be fined up to $150,000. Additionally, a nonprofit that is found to commit copyright infringement may also be subject to paying the owner of the copyright’s legal fees. In extreme cases, a court may issue an injunction, where they will stop the nonprofit’s use of the copyrighted material.
Seeking Permission to Use Copyrighted Material is Best Approach
A work may be copyrighted if a nonprofit uses an image that has already been registered with the United States Copyright Office or if someone has already made it known that they are the creator of a particular image. Although there are some circumstances where a nonprofit may not be liable for copyright infringement, it is best practice to get permission from the copyright owner. It is also important for a nonprofit to keep track of any material on their website, advertisements, pamphlets, cards or donation pages, etc., that they are currently using or have published.
A nonprofit should confirm that all the materials they are using are either something they own or have valid permission to use. Be sure to let anyone who has access to updating the nonprofit’s website, social media, or other digital communication double-check the image they are using before posting. If a nonprofit is not sure if something is copyrighted or if it is unsure about whether the organization has permission, do not post it and/or remove it from your website, donation page, social media or other public documents.
Call an Experienced Attorney About Protecting Your Nonprofit’s Copyrighted Today
For non-profit organizations, consistency in marketing and knowability are critical to maintain its favorable reputation and fundraising success. By knowing the laws of fair use, you can take action to protect your brand awareness if another organization attempts to use it. Federal registration of the business’s trademark is imperative for long-term goals and success. The law does not require that companies operating within the United States retain a lawyer for the trademark application process, however, the United States Patent Trademark Office encourages it. An attorney experienced with trademark law can help you through the complex process. They could ensure no avoidable delays or potentially losing rights to the trademark. To hear more about trademarks and non-profit organizations, call a seasoned lawyer at Abelaj Law, P.C. You can reach them at 212-328-9568.
How Individuals and Charities Can Benefit from Changes to Charitable Deductions Before and After OBBA
The One Big Beautiful Bill Act (“OBBA”) was signed into law on July 4, 2025, which includes many striking changes to charitable deductions that start on January 1, 2026. Donors and donees of charitable gifts must be aware of the new rules to maximize their philanthropic goals. Find out the impact the changes will have on donations and how donors and nonprofits can prepare and respond before and after the changes. If you have questions about charitable giving in New York, please consider scheduling a consultation with the experienced New York philanthropy attorneys at Abelaj Law, P.C. by calling 212-328-9568.
Good: Boost in Charitable Deductions
1) Individual taxpayers who take the standard deduction are allowed an additional charitable deduction of up to $1000 for single filers or up to $2000 for joint filers.
Recipient limitations: Donations to Donor Advised Funds (“DAF”), supporting organizations, or non-operating private foundations are not eligible for the standard charitable deduction.
2) Donations to charities that provide scholarships to K-12 students.
Deduction: Starting in 2027, nonrefundable credit of up to $1700 for gift of cash or marketable securities. Available to both standard and itemized filers, the credit will reduce the other charitable deductions allowed to the taxpayer.
Bad: Reduction in Charitable Deductions
1 – Taxpayers who itemize deductions will only be allowed to deduct charitable contributions exceeding of 0.5% of taxpayer’s AGI.
- For example, if a donor’s AGI is $500,000, they will be allowed to take a charitable deduction on the excess over $2,500. Donations must be to a 501(c)(3) organizations and deductions for gifts to DAFs, private foundations or supporting organizations are allowed.
2 – Corporations will only be allowed to deduct charitable gifts exceeding of 1% of taxable income up to a maximum of 10%.
- Impact to Matching Gifts Programs. Corporations either reduce or increase the number of available charities that may receive a matching gift. It will be a year or two until we see the outcome.
Take Action: Maximizing the Rules for Your Benefit
1) Standard Filers. Consider whether waiting until 2026 to make a charitable contribution will significantly improve your taxable income or if the result would be nominal as compared to the charity’s loss. Keep in mind that your favorite charities rely on your donations, and they may be more negatively impacted than you can imagine. If you skip the 2025 contribution, increase it in 2026.
2) Itemized Filers. Make your charitable contributions NOW before 12-31-2025 in order to receive the maximum charitable deduction. For 2026, make a larger contribution in one year to front-load the gifts that would have been made over several years (sometimes called “bunching gifts”). Bunching will allow you to receive a charitable deduction while providing the cumulative gift to the charity “in advance.”
3) Charities. Contact donors now to make contributions before 12-31-2025, expressing the benefits of receiving a full charitable deduction this year without being subject to the floor. Coordinate with your fundraising team to identify and segment donors who might fit into the standard deduction filing or the itemized filing.
- Identify donors who make smaller, annual gifts and tailor a fundraising message to highlight the benefit of charitable contributions starting in 2026 that were not previously available.
- For large recurring donors or those at the borderline of the 0.5% floor, communicate with them NOW Before 12-31-2025 and share the benefits of making a charitable contribution before December 31, 2025. For 2026, tailor fundraising messaging to the benefits of “bunching gifts” in one year.
4) Supporting Organizations and Private Foundations. Focus your fundraising efforts on itemized filers who can receive a charitable deduction when making large donations or bunching gifts. If you have a website, consider updating the donation page to provide information and direct the donor to discuss with their tax adviser.
Additional Limitations
- Deduction for cash donations to public charities is capped at 60% of AGI (30% of AGI for appreciated assets). OBBA made the 60% cap permanent.
- Carry-forward for 5 years is still allowed, subject to the same limitations.
Consult with a Philanthropy and Charity Attorney Today
Being aware of the tax changes is critical when making charitable gifts. Whether you are a donor or a donee; an individual giver or a charitable recipient, the new laws will impact your strategy to maximize tax benefits. Discussing the tax changes with a philanthropy attorney may ensure that you take steps to fit your philanthropic goals. If you want to learn more about philanthropy planning in New York, please consider scheduling a consultation with the Abelaj Law, P.C. by calling 212-328-9568 to discuss how we can assist you in this process, including developing policies and procedures to receive large donations in order to avoid jeopardizing tax-exempt status.
Common Risks for Nonprofit Organizations and How to Prevent Them
Nonprofit organizations are essential to the well-being of our communities, delivering critical services to support those in need. While their charitable missions empower them to engage in unique, mission-driven activities, they are not immune to risk. In fact, as tax-exempt entities, nonprofits must navigate an added layer of regulations that for-profit businesses often don’t face. Proactively identifying and managing these risks is crucial for long-term sustainability and mission impact. In this post, we’ll examine some of the most common risks nonprofit organizations encounter and how to prepare for them effectively.
1. Conflicts of Interest Must be Disclosed and Addressed
Unlike for-profit entities, board members, officers, or other key persons involved at a nonprofit organization must disclose when they have conflict of interest or potential conflict of interests when making decisions that can impact the organization. When a conflict of interest or potential conflict of interest is identified, it is best practice for that person to remove themselves from the decision-making process.
If an organization engages in a related-party transaction where a conflict of interest exists, it can be at-risk of violating IRS rules that impose a significant tax and possibly jeopardize its tax-exempt status. This is particularly the case for private foundation, where self-dealing, when a key person benefits from a transaction to the organization’s detriment, can result in a hefty excise tax.
Although the IRS does not require a Conflict of Interest Policy, many States, such as New York, require that the organization have one in place to guide them through the decision-making process.
2. Governance and Compliance Risks from Internal and External Sources
Governance and Compliance risks cover a host of issues that nonprofit organizations may face. It is critical that board members, officers, and other key persons at an organization be familiar with the organization’s internal policies and aware of external laws. This includes complying with state, local, and federal tax rules to ensure the organization is only engaging in activities that carry out its charitable purpose in order to maintain its tax-exempt status.
A nonprofit organization must ensure that it is complying with its internal policies (Bylaws, Conflict of Interest Policy, Grant Policy, OFAC Policy, etc.) in order to maintain seamless and reliable operations. It is recommended to review internal policies every 3-5 years and ensure new board members get familiar with the organization’s governing documents before joining the organization.
Organizations must ensure compliance with external laws and requirements. This includes changes to nonprofit corporation laws, tax laws that impact the organization and applicable agency laws. By having ongoing communications with its general counsel, an organization can be nimble in responding to sudden changes in the law in order to avoid jeopardizing its legal standing.
3. Communication Risks to External Parties May Harm Organization’s Reputation
A nonprofit organization must be mindful of its communications. This includes social media posts, emails, and when members of the organization speak in public settings.
A nonprofit should have a procedure in place to review its communications prior to publication to confirm they accurately describe its charitable mission in a transparent manner. If a nonprofit organization does not, it may be at risk misrepresenting itself in contract negotiations, grant applications, or donor engagements. The result may be catastrophic if funding is lost or the resulting reputational harm is irreversible.
When advocating for or informing the public about its charitable goals, nonprofits must avoid engaging in partisan political activity and must not have a substantial part of their activities be lobbying. Organizations are allowed to advocate for supporting their charitable causes, but they cannot engage in prohibited political activity as there is a high risk of potentially losing 501(c)(3) tax-exempt status.
Adopting a policy and process for external communications will help create parameters on the type of language that can be used, the authorized platforms, and the individual responsible for reviewing the final products.
4. Financial Responsibility Cannot Be Abdicated
Nonprofit organizations rely on donations, grants, and fundraising events to support its operations and activities. It is the Board’s responsibility, both collectively and individually, to oversee the financial health of the organization.
The organization’s financials must be handled in a transparent manner and ensure the majority of funds are used to carry out the organization’s charitable mission.
The organization should reiterate to its Board that financial compliance and responsibility remains with the Board at all times and is not a responsibility that can be transferred to someone else, whether a committee, CPA, attorney, or outside consultant. There should be checks and balances in place to ensure that filings are submitted to the IRS on a timely basis and that the finances are properly invested to meet the organization’s overall goals. Failure to do so may result in loss of tax-exempt status, which requires significant cost and time to regain from the IRS.
5. Reputational Risks May Result from Internal or External Events
Reputational risks usually refer to the potential loss of public trust and credibility due to actions, behaviors, or external perceptions of an organization. A “bad reputation” can cause a ripple effect through the organization and impact its internal structure and external partners. This is because nonprofits rely on their reputation in order to receive donations, grants, and enter into contracts. Reputational risks can cause internal disruption and cause a stagnant Board not be able to make important decisions for the organization. It can also cause community backlash, loss of funding and opportunities, and may even prompt an investigation from the Attorney General.
Contact Our Experienced Nonprofit Lawyer Today
Risk is an inevitable part of running an organization, but it doesn’t have to hinder a nonprofit organization’s activities. Recognizing risk is the first step to resolving it. By taking proactive approach to risk management, board members, officers, and other key persons can help set up the organization for long-term success to make a lasting difference in their communities.
At Abelaj Law, P.C., we understand the various risks nonprofit organizations face and work with them to mitigate and resolve current or potential issues. Our work is about giving the tools and resources an organization needs in order to succeed. To hear more about our services, call a seasoned lawyer at Abelaj Law, P.C. You can reach them at 212-328-9568.
Also, check out or Board Member Training: How to prevent Disruptions Before They Occur https://www.abelajlaw.com/elevate-your-nonprofit-governance/