Nonprofit Law/Youth Sports


QUESTION: My husband is on the board for a non profit youth sports organization.  We believe that they are operating unethically.  Our end of year financial report shows expenses paid for the funeral of a former coaches infant child.  Expenses for meals for families that had illness or deaths.  Our purpose is stated as being an organization to promote sports and sportsmanship.  These things were never brought before the board or the members for approval and from what I have read, wouldn't be legal for us to do anyway.  We have also been told that hidden somewhere in these supposed yearly expenses was the cost of rebuilding the President's transmission.  He claimed he tore it up hauling our league trailer.  They list part of our incoming funds as being from a yard sale, which we did have.  However, they list the profits from the yard sale as being only half of what was taken in??  They changed the by laws from one year terms to 2 without previous notice or a 2/3 vote of membership.  We are very upset and want to be sure we are right before arguing with them or pursuing legal action.

ANSWER: I would first need to know whether the entity is a North Carolina nonprofit corporation and also whether the members can vote for the board. After you answerI wi,, reply again.

Harvey Mechanic

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

QUESTION: Yes, this is an NC non profit corporation.  The members can vote for board members.  However, I believe that none of our elections the past 3 yrs have been legal because they have not formed any of the committees required in our bylaws (nominating committee, balloting committee etc).

You and some other voting members can make a written demand to the officers and Board that they immediately schedule a proper election.  If the board does not comply with the procedures as in the articles of incorporation and bylaws, the the voting members would have a cause of action to request a county court to order the corporation to follow proper procedures.

Chapter 55A of the North Carolina Code, the North Carolina
Nonprofit Corporation Act, on the site is available
at and you would especially read   55A-7-40 which is available at about court action (derivative proceedings).

As for the issues of financial irregularities, complaints could go to your State's Attorney General's Office as that office generally oversees charities within the state. If the
action is criminal then your local district attorney may be
interested in prosecuting as at:
which is a pdf file of 4 different news stories.

Complaints to the IRS regarding Exempt Organizations are discussed
A referral of an exempt organization may be made by submitting Form
13909, Tax-Exempt Organization Complaint

Nonprofit Law

All Answers

Answers by Expert:

Ask Experts


Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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.

©2017 All rights reserved.