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Nonprofit Law/Athletic sponsorship


QUESTION: My daughter is an All Star cheerleader here in Connecticut. Including travel we spend about $6,000 a year on cheerleading and participate in various fundraisers to offset the costs. Each year the gym does a t-shirt sponsorship. Each athlete can get donations from friends/family & businesses to be put in their personal account to be used for their expenses. The company's name is then displayed on a t-shirt the girls wear to the competitions. This year, the gym owners informed us they'd be taking 10% of each child's sponsorship money. Is that legal?

ANSWER: I don't understand whether a 501(c)(3) organization is operating the t-shirt fundraiser or, in the alternative, "the gym", which I assume is a for-profit entity.  After you answer that I will reply again.

Thank you.

Harvey Mechanic
Attorney at Law

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

QUESTION: "The gym" is a for-profit entity. They allow the athletes to get their own sponsors then they are going to take 10% of the funds raised by the athletes. They said the 10% they take from each athlete is going to cover "coach's fees" for the competition season.

The gym may have sales events, but then donations are not deductible. The sales people would also accrue taxable income from the fringe benefits (or compensation) they receive from sales.

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


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.

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