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Nonprofit Law/If the Supported Club is not completely open to the public, can the Booster Cllub be non-profit?


Our summer swim team is comprised (by community regulation) of swimmers who must be members of an HOA of the pool at which all meets and practices are held, or a resident of a sister development immediate proximate to the HOA pool neoghborhood by means of an established waiver. Due to liability concerns, the HOA Pool community will not permit any persons outside these two areas to have access to the pool, and by extension, members of the swim team. We recently established a Booster Club to try and help fundraise for team coaching costs primarily, as well as equipment repairs and replacements, and potentially to start a scholarship fund for swimmers who have been with the team and exemplify the best in sportsmanship and team spirit.

The membership in the club is 100% voluntary for any team member, and we are truly trying to collect funds from the non-team affiliated neighborhood retirees and friends and relatives of the team as well as local businesses, and the hope is to make contributions fully tax deductible for them.

Just wondering if because we are not 100% open to the public for membership on the team, whether this would render our booster club incapable of obtaining 501(3c) status under IRS code?

Thanks in advance for any assistance or advice you can provide in this matter!

Jeff Sullivan, President
Stonehouse Splash Swim Team

See pdf  page 13 of under the heading
"Charitable Class
--start of excerpt  ---
The group of individuals that may properly receive
assistance from a charitable organization is called a charitable
class. A charitable class must be large or sufficiently indefinite
enough that  the community as a whole, rather than a pre-selected
group of people, benefits when a charity provides assistance.
--end of excerpt  ---
More details are found starting at pdf page 6 of

A 501(c)(3) organization needs to serve public, not private
interests. Section 1.501(c)(3)-1(d)(1)(ii) of the regulations
provides that an organization is not organized or operated
exclusively for one or more exempt purposes unless it serves a
public rather than a private interest. To meet the requirement of
this subsection, the burden of proof is on the organization to show
that it is not organized or operated for the benefit of private
interests, such as designated individuals, the creator or his
family, shareholders of the organization, or persons controlled,
directly or indirectly, by such private interests.

For example, the IRS cited to a Revenue Ruling:
--- Start of Excerpt ---
In contrast, Rev. Rul. 75-286, 1975-2 C.B. 210, describes an organization formed by
the residents of a city block to preserve and beautify that block, to improve all public
facilities within the block, and to prevent physical deterioration of the block.  Its activities
consist of paying the city government to plant trees on public property within the block,
organizing residents to pick up litter and refuse in the public streets and on public
sidewalks within the block, and encouraging residents to take an active part in
beautifying the block by placing shrubbery in public areas within the block. Membership
in the organization is restricted to residents of the block and those owning property or
operating businesses there.  The organization's support is derived from receipts from
block parties and voluntary contributions from members.  The revenue ruling concluded
that the organization did not qualify for 501(c)(3) exemption because it operated to serve
private interests by enhancing membersí property rights as evidenced by its restricted
membership and area served.
---End of Excerpt--- (on page 3)

Therefore, the fact that your group is only benefiting members of two private housing developments, would preclude it qualifying as a 501(c)(3) organization, unless those two developments was almost the same size of the "community".

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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