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Nonprofit Law/Gymnastics Booster Club Information


Hey I found you. I just sent you another email just an hour or so ago.

I read one of your articles in regards to purchasing gym eqp for gymnastic gyms. It wasnít what I was looking for however was very informative. I appreciated you taking your time to explain it. I also wanted to know if you could point me to your other articles. I would love to read them.

Iím interested in finding out, and what I was originally looking for information on:

1.   Can a booster charge new gymnasts a booster start-up fee for a booster that started up prior to their existence? If so how long can they charge new gymnasts? I didnít realize it cost money to start a nonprofit booster.
2.   What are booster clubs allowed to charge other than meet fees and training for the coaches?
3.   Are boosters allowed to purchase eqp for the gym for donation?

I appreciate your appreciations, Daniele.

To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter. My summary of IRS regulations relating to 501(c)(3) booster organizations is at: and you may be interested to read that.

1. As I have explained in my summary of IRS regulations, a 501(c)(3) booster organization may not base any decisions on its granting of benefits to families on their membership or fee payments to the organization. Otherwise,  such an operation would be what the IRS calls a cooperative.  A cooperative is not qualified as a 501(c)(3) organization.  A 501(c)(3) booster organization is to be a charitable, not a cooperative, organization. A charitable organization, like the Red Cross, does not require beneficiaries to work for the Red Cross in order to receive benefits.

In August, 2013 the U.S. Tax Court supported the revocation of 501(c)(3) organization status of a formerly exempt organization and noted that a parent's fundraising was earmarked to reduce what otherwise could be a $1,400 payment the parent would have to pay out of his/her pocket. The direct linkage of a parent's fundraising resulted with paying expenses for that parent's child and was a
very specific benefit obtained by the insider.  While the parent may not have been paid cash, the parent nevertheless ended up escaping having to write a check for the amount of the benefit. Families who did not fundraise did not receive any benefits from the purported a 501(c)(3) organization.

But, if a family wants to joint a new booster organization the organization can certainly require them to pay a fee, including start-up fees. If they use an attorney the costs in the set up would be substantial.  

2. They can charge for anything directly or indirectly relating to gymnastics to the persons who have agreed to join such an organization but the membership agreement should notify what the types of charges would be so that potential members know what they are getting involved in.

3. A 501(c)(3) organization is not allowed, under IRS rules, to purchase equipment and give that equipment to a for-profit gym.  The gym is not a charitable beneficiary and, therefore, grants to them, are prohibited. The grants would result in what the IRS calls, substantial private benefit to the for-profit gym. An extensive discussion by the IRS of the private benefit issue relating to 501(c)(3) organizations is found at
Especially note page 8 about a private school benefiting the insiders.

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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