Nonprofit Law/Grants

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QUESTION: I would like to thank you in advance for taking the time to answer my questions.
We are a newer booster club working through some growing pains.  We have had a really rough start and are trying really hard to get things right but are finding it hard to get answers on the correct way to handle funds. Our original goal was just to be an optional organization for the parents of gymnasts who wanted to fundraise to be able to fundraise to cover the costs of Meet/Coaches fees. We were then told that every child on the team has to be able to "equally" benefit from the booster club whether their parents wanted to join or not. The Gym then made the Boosters responsible for managing all Meet/Coaches Fees.  Since we are so new, we have not been able to cover a whole season yet, which means parents have had to pay the difference between what was fundraised and what was still owed.  We are trying to get everything legal but are stuck on the difference between what's owed and what's raised. And on whether everyone has to join. Are parents able to "opt out" and just give their money as a pass through? The money that is raised, does it have to be given to "equally" to every girl on the team? Or can it be divided based on financial need and cost of the season?  Thank you

ANSWER: 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.

The booster organization may cover part of the meet/coaches fees and the team members would have to cover the rest. No person is required to joint a 501(c)(3) booster organization but still the 501(c)(3) organization must not discriminate in grants against such families.  Parents may opt-out of being in the group.  The grant money may be based on financial need and the cost of the season.

You are welcome.

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.

---------- FOLLOW-UP ----------

QUESTION: As a follow up,  if our team has 100  girls,  and 20  parents choose not to join, just write a check for their portion of the fees and never ask for  any of the fundraising money for grants,  can that be considered discriminating since their parents never joined or helped?  I  think I understand that,  even if they don't join,  but apply  for grants,  they have to be considered just like everyone else.   Again,  thank you for your time.

Answer
Right. Even if the 20 parents choose not to join, the organization should give their family the same benefits (grants) as others. They are considered like every other family even if they don't join.

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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