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Nonprofit Law/Fundraising profit dispensing


Our nonprofit organization is made up of several age group softball teams and a baseball team. We recently held our annual golf tournament fundraiser and for the first time the profits were not divided equally, they were divided based on what teams brought in monetary value (players and sponsors) none of the teams work getting donations (door prizes, raffles and food) was considered when deciding what teams got funds. I'm just a parent (who amoung many others worked really hard),that has just found out about all this and felt it was handled wrong. After reading many of your answers to other questions, it seems that a lot of it is being handled wrong. Is this allowed when you are 501c(3) organization?


There are no IRS regulations that prohibit a 501(c)(3) organization from giving funds to a particular team based upon what that team arranges to bring into the 501(c)(3) organization unless the team is of only 2 or 3 members or a very low number.  If it was very low then it would be almost like what is prohibited which is that the organization would be giving funds to   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


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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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