Contact the film distributor and get a license.
USPTO Registered Patent Attorney, Master of Intellectual Property law, MBA I am neither your attorney, nor my answers or comments in AVVO.com create an attorney-client relationship with you. You may accept or disregard my free advice in AVVO.com at your own risk. I am a Patent Attorney, admitted to the USPTO and to the Florida Bar.
There is no such thing as a general "fair use: defense for university-affiliated organizations. If you want to show movies during meetings of your club, you should contact the owners of the copyrights in the films that you want to show and request permission and/or a license.
Is it really unlawful for 12 people to rent a movie and watch it together? If this is a non-profit club, I don't think so and would have to be convinced otherwise. Maybe you would have to rely on a fair use defense, but at the same time how is anyone even going to find out about it in the first place? That said, apparently there is some disagreement on the issue.
A number of colleges and universities have guidelines that cover this type of activity (and I've included links to some of them below). Accordingly, I would strongly suggest that you check to see if your college has its own set of guidelines on this subject.
In the meantime, if you review the guidelines below, you will see that there is a general consensus that if your group is small enough that you can, and do, watch a DVD of the film in a club member's dorm room or home, without any charge of admission, your screening should NOT be deemed a public performance and should NOT require a license.
However, if you intend to screen the actual films (v. DVDs) and/or intend to screen the films outside of a residential context, you will need a license. In such case, some institutions require you to license the film through a particular department. If your college does not make arrangements for its students in this context, you might want to start by contacting the folks at Swank (http://www.swank.com/college/index.html) or Criterion Pictures USA (http://www.criterionpicusa.com/CPLUSA/lcl_about_us.html).
Good luck to you!
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