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Nonprofit Law/Mandatory Fundraising Commitments

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QUESTION: Our non-profit sports league is requiring each player in the association to purhase a book of raffle tickets for $150.  If raffle books is not pickup or payment received by a certain date, then the player will not be allowed to participate in activities until payment received.  This is not an additional fees required, but a mandatory fundraising commitment of each player.  Each player can either sell them to earn cash back to defray costs of the program or other expenses, or can simply put player name on the tickets and be entered into the drawing.  Is this legal?

ANSWER: In effect the sports league is requiring the player to pay $150 and gives them the option to sell raffle tickets. A sports league is allowed to assess $150 unless there is some agreement or contract between the league and family that provided otherwise, such as an agreement that, if the family paid certain fees at the start of the year then the player would be allowed to participate in activities.

I am assuming the raffle is authorized by law. You may want to check at
http://www.gambling-law-us.com/Charitable-Gaming/District-Columbia/

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.    




---------- FOLLOW-UP ----------

QUESTION: Each player already paid a set fee to start the activity, then two months later the mandatory fundraiser is required each player to purchase the raffle tickets in addition to the set fee paid, then each player can sell them to earn cash back to recover their cost.  Is this in violation of Section 501 (c) (3)?

Answer
Ok. Each player paid a set fee to start the activity.  It appears that you are conceding that there was no agreement that the particular set fee would be all that the players would need to pay for the season. Therefore, there is no federal law violation by the $150 additional requirement.

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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