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Nonprofit Law/Gymnastics Booster Club and Sponsorships


Good morning and thank you in advance for the help with this question and all the questions you have helped others with.

The booster club figures out at the beginning of the year how much money needs to be raised and projects what will be raised by the booster club as a whole. We then let the parents know what portion of the fundraising they need to come up with. In this case it is $300 for the year. All of the money raised goes into the general fund and is used to pay for gymnast competitions, camps, gear, etc. We are planning on soliciting for sponsors and would like to give parents a credit of 10% of the sponsorship money towards the $300 fundraising commitment. All of the money will still go into the general fund to be used for all gymnasts. The parents will only get the credit on paper since we don't have individual accounts. Can you advise if there is anything wrong with this? Thank you.

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 organization. My summary of IRS regulations relating to 501(c)(3) booster organizations is at: and you may be interested to read that. There you can see that such an organization may require its members to raise funds by some sort of work, but it can not require families to become members or work for the organization as a prerequisite for the family to get the benefits of the 501(c)(3) organization's grants for the youth. Otherwise the organization would be what the IRS calls a cooperative.

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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