You are here:

Nonprofit Law/Concession stand workers

Advertisement


Question
Mr Mechanic, we are a 501c3 baseball organization. Some questions have come up as side bars on how we run the business end.  We are a volunteer run organization.
1) parents volunteer to work shifts in the concession stand, when they can't perform their shift we pay some one to fill in. The concession manager assigns who works these shifts and most are assigned to herself and a select group of individuals, however, some individuals are excluded from getting paid shifts for personal dislike by the concession manager. Can this cause a problem for us? We do not send out 1099's and the penalty for not working your assigned shift of $30 is simply passed thru our funds, we collect the $30 from the parent and we pay out the $30 in cash from our concession funds to the worker, is this a problem?
2) we have a mom that volunteers to order the uniforms for 500-600 kids ranging in age from 4-15. She coordinates with the individual manager on what team name he wants and how he wants the uniform to look and then with the individual team mom's to get them handed out to the kids. She also has a service where she can put names and numbers on the jerseys. She ask each team manager if he wants her to do this or take the uniforms somewhere else to have this work performed. Each team raises money to pay for this and pay her directly.  No funds run thru our account, is this a problem?

Answer
1. First I suggest that you do not use the word "volunteer" in discussions of such issues as it tends to confuse things. A person who is required to work and, if that person does not work is required to pay $30 is an employee or independent contractor.  In your situation, it appears those workers are not independent contractors because the concession stand is run by a boss, the concession manager, who wants things to operate and proceed in a certain way. The IRS explains at http://www.irs.gov/pub/irs-pdf/p5137.pdf on page 87. "A volunteer is an employee under common law if an entity has the right to direct and control the volunteer's performance,
not only as to the results to be accomplished, but also as to the methods by which the results are accomplished."

It is not clear from what you wrote whether the concession business is part of your 501(c)(3) organization.  If it is, then the workers have employment income that is treated like normal employment income by both the employer and the employee.

2.  Your board of directors should decide by resolution if they want to allow the uniform manager to operate in part for her own benefit.  If they do have such a resolution, then there is no problem as long as each team manager is notified in advance of the order that her side business is her own business, not part of the 501(c)(3) organization.

Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com

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.  

Nonprofit Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Harvey Mechanic

Expertise

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 Harvey108@hotmail.com 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 "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

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.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


©2016 About.com. All rights reserved.