Legal Topics

Positive Signs For Reimbursement Of Overhead Costs

by

You may remember back in January that I wrote about the new rules promulgated by Office of Management and Budget (OMB) requiring that any entity receiving federal funds much cover at least 10% of a non-profit’s overhead costs.

Don’t worry, its okay if you don’t remember. But this is relatively important and bears repeating.

One of the concerns at the time was that state and local governments and other funders might pressure non-profits with whom they contract or provide grants to waive a their right to receive overhead costs. The OMB rules prohibit this, but if a non-profit isn’t aware of the rules or are afraid to advocate for themselves, the problem may continue.

Given this context, it was a positive sign when the L.A. County Board of Supervisors voted to adopt the OMB guidelines and to write a letter to the state government to do the same.

It may not seem significant for a governing body to agree to adhere to the conditions under which federal funding was allocated, but as Non-Profit Quarterly notes there are “rob Peter to pay Paul” concerns about how funding may be manipulated.

Rules do not implement themselves without strong nonprofit monitoring and oversight—hopefully, as in this case, in partnership with government authorities. In this case, not only are the supervisors talking to state officials, but they will also be developing an implementation strategy in consultation with Los Angeles nonprofits, which we presume, based on what we have seen as policy statements from CalNonprofits, ought to address how to ensure that higher indirect cost reimbursements do not occur at the cost of lessening service delivery.

As I had noted in my earlier post, the National Council of Non Profits created a guide to educate organizations about the rules and provide responses to assertions from funding entities that the rules don’t apply.

One thing I had mentioned was that arts organizations should note that these rules likely apply to the funding you receive through your state or regional arts organization:

One- it doesn’t matter whether it is called a contract or grant or any other term, the rules are based on the substance of the transaction.

Two – Sub-recipient non-profits who are required to acknowledge part of the funding is received from the federal government are covered under these rules.

Have You Gotten To The Point You Care When People Steal Your Work?

by

You know how you are supposed to check the batteries in your smoke detectors every time we go on or off daylight savings time? It may be worth having a similar rule for checking your intellectual property licenses for your online presences. Maybe every time you renew your domain name?

There was a recent story about a photographer who had set his Creative Commons License to allow commercial use with attribution.

When a map company used his image on one of their publications giving him full attribution, he sued them for their use of the image and lost.

The tone of the article is that it was sort of silly of him to be protesting the use of his work in a way explicitly allowed.

But it occurred to me that it would be very easy for many artists and organizations to accidentally find themselves in a similar situation as their online presence evolved.

For example, maybe your website or blog just starts out as a source of information for people about what you are doing. You set your license to require people to quote you with attribution or a link. You aren’t trying to monetize anything and you would be happy if people quoted you all over the Internet.

Later, your organization starts a new exciting program where you are producing all sorts of interesting stuff (or if you are an individual, you take up a hobby/refine your skills and get really good).

You start putting images and examples of your work online, forgetting your license is so permissive and the next thing you know you are seeing your work appearing all over social media, people are selling tshirts and tote bags with your images and are using your video and audio tracks in their own videos.

If you have been publicizing/bragging about achievements and have realized ambitions much greater than when you first established your blog, website, Pinterest, Flickr, etc, presence you may want to go back and review how much permission people have to utilize the content of those pages.

A similar issue may arise if you are featuring other people’s work and their more stringent use requirements aren’t clearly discernible.

Upon review, you may be surprised by how lax your settings are. Or maybe you will despair that no one wants to steal your stuff despite how lax your settings are.

You Are Now Free To Exploit Your Interns

by

For the last year or so, non-profit arts organizations have been somewhat nervously wondering whether the criteria being used to define what constituted an internship might be applied to the non-profit industry as well.

The concern arose over a ruling against Fox Searchlight pictures in a case where interns on the film Black Swan where the court found the interns should have been classified as employees instead under the six points of criteria set down by the U.S. Labor Department.

Earlier this month, an appeals panel vacated the decision of the lower court saying the Labor Department criteria was out of date and providing a different criteria.

He argued that the proper way to determine workers’ status was to apply a “primary beneficiary test” — a concept proposed by Fox in which the worker can be considered an employee only if the employer benefits more from the relationship than the intern.

Judge Walker wrote that he and his fellow judges on the panel “agree with defendants that the proper question is whether the intern or the employer is the primary beneficiary of the relationship.”

He further argued that the test should hinge largely on the internship’s educational benefits: for example, whether the internship was tied to the intern’s formal schooling and whether it occurred in an educational setting.

Summer is the high season for internship and apprenticeships in the arts since so many students are out of school. It is fortunate that this ruling came out when it did. Now arts organizations can squeeze more labor out of their interns in the remaining weeks of the summer without any concerns.

Everyone knows that the arts are good for you and that you must suffer for your art. Ergo, any task an intern performs must be more beneficial to them than it is to the employer. Misery and lack of pay constitute authentic experiences for arts practitioners after all.

Yeah well, be that as it may, this is more a case of just because you CAN do it, doesn’t mean you SHOULD. Just because the environment is potentially more relaxed than it was last month doesn’t mean proper standards don’t need to be developed for internships to make the experiences more valuable.

Schools like the Ringling College of Art and Design have clear standards (no more than 20% clerical work) and a series of evaluation forms.

There are a good number of people who don’t enter internships under the auspices of a formal training program. In either case, the success of the internship heavily depends on the type of experience the work site provides/creates.

If anything, an internship should be viewed as an additional responsibility the organization is taking on, not a solution to a lack of labor. Even beyond the consideration that staff members will need to take additional time to train an unskilled individual, time and effort to regularly evaluate and provide feedback to the intern needs to be factored in.

Having informal discussions over lunch or at the bar after hours still constitutes work for staff, especially if the need to address problems arises. Of necessity, intern assessment and evaluation needs to be a much more rigorous process than periodic evaluation of employees. (Not that many arts organizations do that very well, but that is a different post.)

Diego Rivera and the Paintbrush of Destiny

by

As part of our website revamp, I am in the process of adding content about the various murals located around the building. One of the best pieces is a little removed from the lobby and spans a couple floors so I have made a video and map to help guide people to it.

So it was with great interest that I read a recent piece on NPR about the rights visual artists, especially muralists, can exert to determine the disposition of the buildings in/on which they are painted.

As I started reading, I began to worry that more people might refuse to allow murals to appear on the sides of their buildings if they were aware of these issues. However, the story notes that Philadelphia, which has a robust, formal mural program, has found ways to strike a balance and work with both the artist and building owner to find some sort of accommodation. They are likely a good source for advice on these matters.

Only works created after 1990 enjoy this protection under the Visual Artists Rights Act (VARA). So Diego Rivera’s paintbrush technically hasn’t altered the destiny of any buildings as far as the Act is concerned.

This piece from the National Endowment for the Arts and this one from the Arts & Business Council of Greater Philadelphia do a pretty good job of explaining various aspects of the law.

One thing I think bears emphasizing since many of the commenters on the NPR story get it wrong is that while works for hire are not covered under the VARA, that does not mean that only works created for free are covered. If you are commissioned to create a work as an independent contractor and get paid for it, your work is covered. This is clearly stated in the Arts and Business Council flyer, but I wanted to reinforce that.

The reason I think it is particularly important to be aware of this law is because so many communities are utilizing murals to help spruce up the neighborhood. Often these murals are on abandoned buildings that are good candidates for destruction should those murals generate the the desired positive ambiance and attract new residents and businesses.

Since the rights are retained until the death of the last surviving creator, it might be good to form a general agreement that the work is being created with the expectation (and perhaps hope) that someone will eventually destroy it.

The other thing to note is that the VARA deals with the artist’s moral rights to the work which can never be given away. The artist can transfer ownership, but can’t give up their moral rights. Per the NEA Office of General Counsel article:

“VARA restricts the exercise of the rights of attribution and integrity to the author or joint authors of the artwork, regardless of whether he/they hold title either to the copyright or the artwork itself. Thus while both copyright and physical ownership are property rights which may be transferred, moral rights may not be transferred. Moral rights may, however, be waived. The waiver instrument must be very specific: the creator must consent in a written and signed instrument specifically identifying the artwork, the uses of that work, and with a clause limiting the waiver to both aspects.”

So even if a mural was presented as a birthday present to someone, the next owner of the building can’t immediately bulldoze it as the new owner of the mural. Notice of 90 days must provided to the artist(s) during which period of time they can take whatever action they decide is necessary from a final visit to take pictures before it is destroyed to seeking a court injunction against the demolition.

The one issue that isn’t really addressed is what protections exist for art that someone produces uninvited. People go out and paint over unwanted graffiti everyday….unless it is a Banksy in which case they may chisel out the section of the wall and sell it at auction.

If someone cares enough to chisel it out and keep it, aren’t they admitting it is valuable and not a nuance? So if Banksy (or Banksy’s lawyer) shows up and says the art is site specific (which many clearly are) and may not be moved/destroyed/defaced per VARA, who has the right to determine what happens with the work?