Nonprofit Law/Fundraising mandates...
The Booster Club I belong to recently changed some 'rules' and they have established 'minimum requirements' regarding fundraising events and volunteer hours. And failure to meet the 'requirements'will result in the athlete's/individual's participation/ try out for the next season.
For example: Each member is asked to do a minimum of 10 events (ie: selling raffle tickets, cookie doughs, candies...etcetera...and of course in the course of the season/year).
If the 'minimum' is not met for each 'event' then the members are asked to pay the difference... meaning the profit $$$ in cash or check.
Example: Each athlete/individual (and of course the parents who are members of the booster club) are asked to sell 10 Cookie Dough each but if only 7 were sold then that individual is mandated to 'donate' the profit difference (ie: one cookie dough profit is $5 so the member has to pay $15 more because the member did not sell the minimum 10).
Also, each member is mandated to perform 20 volunteer hours (meaning hours to do car washes or BBQ fundraising events, etcetera) for the season.
Failure to meet these 'minimum requirements' are subject to consequences...
If a member does not meet the minimums (fall short on 'donating' the $$$ profit difference and/or short on the volunteer hours) then this athlete/individual will not be able to try out for the team in the next season.
Is this even legal?
I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Therefore, I am assuming you are referring to such an booster organization. It appears that there is a conspiracy to evade federal income taxes by the 501(c)(3) booster organization and the organization that operates the team that you refer to. The team does not have a non-tax evasion reason for denying try-outs to families that are not even members or associated with the 501(c)(3) organization, what to speak of families that do not contribute time or money to such a so-called 501(c)(3) organization. It does not qualify for 501(c)(3) organization status.
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. http://goo.gl/QS9wCH
If the team is run by a for-profit organization then it is trying to get funding by working with the cooperative to have the cooperative pretend to be qualified as a 501(c)(3) organization. My summary of IRS regulations relating to 501(c)(3) booster organizations is at: http://goo.gl/IdQwML
and you may be interested to read that. I will be off for a long weekend. If you have any follow-up, let me know within the next few hours. Otherwise, you can write a follow up next Tuesday.
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.