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Nonprofit Law/Contributions benifitting teams and not the League


Thank you, Mr. Mechanic for this forum.  I have recently joined the Board of my child's Recreation Football League.  We are a 501(c)(3).  I am perplexed about the structure allowed for sponsorship contibutions.  Currently, one can contribute if solicited from the VP of Fundraising and the proceeds go 100% to support all activities and all children of the league. But, there is also a structure in place that dictates if a member of the association (a Mom, a Dad, a Coach) solicits the sponsor that the funds are earmarked and go to that solicitor's team. It is agreed, the solicitor allows the League a 60/40% split to be used for League activities, while again the team of the solicitor retains the larger (60%) to support the activities of the solicitor's team.    I want to know if the latter model of splitting the sponsorship is  placing the 501c3 status in jeopardy?  I have read previous posts about funds not being earmarked for individuals but how does earmarking apply to teams in a League?   Thank you.

You are welcome.

The IRS does not prohibit the split of donated funds, some going to the team of the solicitor's family member and some to a league as long as the teams are using the same entity EIN (Employer Identification Number, also known as the taxpayer identification number) as the league is.  That activity would not be called "earmarking" unless the sponsor knew of the split. But, in any case, there is only a problem if the grant went to an individual or to a non-exempt entity.  For example, see on page 3 of an IRS Private Letter ruling from 2006:
--- Start of Excerpt ---

 Another question that arises in the context of charitable
contributions is whether the contribution is really to the charity,
or to another person.  If a contribution made to a charity is
earmarked for the benefit of a particular person or non-charitable
organization under an express or implied agreement, then the
contribution is not deductible as a charitable contribution to the
charity.  The charity must have discretion and control over the use
of the funds.
---End of Excerpt---

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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