AboutHarvey Mechanic Expertise US Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation.
To search my previous answers you can do a Google search: site:allexperts.com/q/nonprofit [with your other search terms appended].
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Education/Credentials B.S. Columbia University in New York City, 1970
J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude
Question QUESTION: My daughter has been in competitive gymnastics for 16 years. She has been
in different gyms over the years. Our current booster club is having difficulty
getting parents to help fundraise to support our gymnast. Our budget is
increasing as the gym grows and soon I believe the small amount of parents
fundraising will be discourage to continue to do so. We are a 501(c) (3) non
profit organization. I know there are families who are hardship cases,but
there are families who say they do not want to fundraise or they do not have
time for it. There are families that say they want to opt out and just pay an
assessment. Are they allowed to opt out and pay their children's share of the
coaches expenses? Also I have seen gyms who compete at the Olympic and
National level come up with practices that they believe are fair to all the
parents. One gym has what they call a flex plan where the parents are in
groups according to their fundraising efforts. Each group may have different
levels of gymnast and they share their fundraise dollars. Each group has a
projected budget and they try to fundraise to bring the cost down or pay the
difference out of pocket. Every group is the same way. Can we do this
grouping of gymnast so that our parents are not discouraged because of the
lack of participation of so many parents. Would this be any different from
grouping gymnast by level and gender? Lower level gymnast have less cost
than a higher level gymnast and they do not want to have to support a higher
level gymnast. Also, our boy's parents do not want to support our girl
gymnast. They also have group fundraisers that go into the general fund and
the money is distributed to all gymnast competition expenses. How can we
make this work,be fair to the few that work hard for the parents who refuse
to support their children and help those who are in true need? Thank You so
much for time !!
Sharon
ANSWER: Unless your daughter started really young, she would be over 18 years of age. Let me know if almost all of the families have a child under the age of 19 or not and then I will reply further.
Also, if many are over the age of 18, you should review your 501(c)(3) organization's application for exemption to see if there was any indication as to the age of the beneficiaries and advise me of that also.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
---------- FOLLOW-UP ----------
QUESTION: Hello Mr. Mechanic,
I'm sorry she has been in gymnastics for over 15 years. She started
gymnastics when she was two years old. All the gymnast at her gym are
almost 18 years old
or younger.
Thanks Again,
Sharon
Answer http://snipurl.com/boosterinf
is my summary of IRS regulations relating to 501(c)(3) booster organizations
You may be interested to read that.
Having groups formed because of fundraising efforts seems to be against the spirit of the IRS rules that indicates that IRS may have a problem with a 501(c)(3) organization allowing individuals to collect funds for go for their own or small group's private benefit. See: www.irs.gov/pub/irs-tege/eotopica93.pdf (Example one on page 5),
where they determined that the resulting "private benefit to the
individual members was substantial and negated the charitable
intent of the organization precluding exemption under section
501(c)(3) of the Code".
As for the particular plan, you would need to clear it with the IRS as I have not seen any published ruling as to the particular schemes you propose.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
