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Nonprofit Law/Mandatory Fundraising

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Question
Can an youth sports association mandate fundraising?  The association has three categories of payment.  I pay ice fees and registration fees. There is a volunteer requirement of 10 hours and they offer a buyout of $200 dollars.  (infact we have to submit a check for this which they give back when we have completed the 10 hours of volunteer time) and now they have a mandatory fundraiser.  The mandated fundraiser is to sell Ice Fishing tournament tickets.  I do not ice fish, the lake is relatively unknown, there is no set list of prizes so it is really hard to sell these to other people.  The association is telling me that I have to pay the money regardless of whether I use the tickets.   Can they mandate this?

Answer
I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. Therefore, I am assuming that you are referring to a 501(c)(3) organization.

A youth sporting organization may mandate fees.  It may not, however, require people to raise funds, indicating that the funds are a charitable donation, for they are not, if the funds are going to benefit the individual fundraiser.

As to charitable deductions, see IRS Publication 526 "Charitable
Donations"  which is available at:
http://www.irs.gov/pub/irs-pdf/p526.pdf
on page 6 where the IRS lists as not deductible "Contributions to
individuals who are needy or worthy. This includes contributions to
a qualified organization if you indicate that your contribution is
for a specific person."

"It is also possible that amounts credited to a participant's
account due to fundraising would constitute income from services,
and could result in employment taxes."
www.irs.gov/pub/irs-tege/booster_club_field_directive_6-27.pdf

By the way, the word "volunteer" is not proper when benefits are sought for work. The IRS explains  at:
www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf on page 72-73
(takes a while to load as it is a 91 page pdf file):
--start of excerpt  ---

The use of the term "volunteer" generally has no significance in
applying the tax law....

A volunteer is an employee if an entity has the right to direct and
control the volunteer's performance, not only as to the results to
be accomplished, but also as to the methods by which the results
are accomplished.  It is the "right" to control, even if the entity
does not exercise the right, that is important. Many factors in an
employment relationship have to be considered before a decision can
be made as to whether the entity has the right to direct and
control.

If an entity does not retain the right to direct and control the
details and means of performing the work, the volunteer worker is
not an employee [would be an independent contractor].
--end of excerpt  ---

But, if the organization does not have the sales people indicate that the funds are charitable donations, then there is no law that I know about that prohibits the organization from mandating a certain kind of work for benefits.  Note, however that if you have already a contract for services with the youth sports organization, they can not, after that contract has been agreed to (whether oral or written), enforce extra work or extra payment.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 possible 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. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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