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Nonprofit Law/Member Forfeited Funds


Hi Harvey! Thank you for your assistance! We are a 501c3 sports related booster club. One of our previous members lost eligibility when her daughter left the team during the last fiscal year. Any funds that would have been directed toward her daughters expenses were forfeited to the general fund. She has now returned to the team and rejoined the booster club. But the member is now asking that those funds that were forfeited last year be allocated back to her daughter for future expenses. Is there any basis that this would be acceptable? And for future reference, what if she had left and returned in the same fiscal year? Thanks!

Certainly it is acceptable for a 501(c)(3) organization to grant funds to a youth gymnast, notwithstanding that she left the team last year or was not even on the team.  The only issue now is about this year.

As to both of your questions, a youth team member must be given grants and benefits equal to those other youth who are similarly situated on the team.  Membership or work for the booster organization is not to be a factor in that. My summary of IRS regulations relating to 501(c)(3) booster organizations is at and you may be interested to read that.

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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