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Nonprofit Law/Gymnastics Booster club assessment fees

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Question
I have read several pieces on your site about gymnastics booster clubs.  I understand the money raised must benefit the entire team and exclude no one, regardless of whether they have met the volunteer commitment.  The money we raise throughout the year only covers a portion of the costs and for the remainder we charge "assessments".  These assessments are an estimate of the coaches fee's for the season.  We have level 3-10 gymnasts competing and not all attend the same meets. An example would be our level 3-5 compete in 5 meets in the fall and our level 6-10 compete in 5 meets in the spring.  In the past our treasurer has broken down every meet expense for each and every meet.  She then charged an assessment based on what meets your daughter was attending.  By doing this it created a great deal of complicated calculations and paperwork.  Because this is considered one team we now are estimating the entire team (10 meets total) and coming up with an equal assessment for every girl, regardless of what meets they are attending.  We have a lot of backlash from the parents because they do not feel it is fair to pay the same assessment as a girl who attends meets much farther away, increasing that specific meets cost.  I was accused of being unethical by not simply charging assessments based on which meets your daughter attends.  This would create a different assessment for the level 3-5 group and 6-10 group.  Because of the time it would take to break it all down per each individual girl we simply too the estimated cost for the entire year and divided it by how many girls were competing regardless of their level.  Am I being unethical or am I in accordance with the law to charge an equal assessment across the board.  I almost feel as though charging each girl a different amount is in direct violation of law because you are treating, and charging, each member differently.  Thanks

Answer
A 501(c)(3) organization may charge fees to pass through to another entity, like a meet or a coach and those fees may be equally divided among the participants or charged on the basis of individual use. Note that the 501(c)(3) organization may not allow, in either case, the participants to raise those funds, representing that they are raising funds for the 501(c)(3) organization or that those funders would receive a tax deduction for such funding. My summary of IRS regulations relating to 501c3 booster organizations is at:
http://goo.gl/ULw6f6
and you may be interested to read that.

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.  

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Harvey Mechanic

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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.


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