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Nonprofit Law/Changes in 501(c)(3) laws


I have read the 1993 article titled "Athletic Booster Clubs:  Are They Exempt" by Debra Cowen and Gerald Sack, which seems widely cited and so I assume you are familiar with it.  Are the basic priciples discussed in the article still accurate under any changes in 501(c)(3) law/regs that have occurred since 1993?  Asked differently, have there been any significant changes/guidelines since 1993 that change the analysis?  Thanks

There is nothing new in the code or regs.  You may interested to know that the IRS recently reaffirmed the basic principals.  For example in June of 2011 the IRS wrote:
---Start of Excerpt--
If a booster club confers a benefit on a participant in return for
their fundraising activities, such as by crediting amounts raised
by a participant toward that participant's dues requirement, or by
crediting amounts raised against the cost of a trip, the booster
club is providing a private benefit to that participant.
Consequently, such practices could result in the organization
failing to be described in 501(c)(3).
---End of Excerpt---

The IRS continued in the next paragraph,

"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."

My summary of IRS regulations relating to 501c3 booster organizations is at: you may be interested to read that.

Harvey Mechanic, Attorney at Law -

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


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 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 "" without the quotes and then add your search terms before hitting enter.


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.


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

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

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