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Nonprofit Law/gymnastic booster clubs


I am a member of a gymnastics booster club and am on the by-laws committee.  We are reviewing some new policies and I am concerned about a few of the potential new by-law proposals.

1)  There is a proposal on the table that would require parents to participate in working our most profitable fundraiser starting when their child was a level 4.  If the family opts not to do so at a level 4, but wishes to do so when the child enters the optional levels (with higher costs associated), the family would then buy into the club at a cost of $500.  (or whatever amount they determine.)

Is this pay for play?  

This is some of the specific wording of the topic:

"What should the penalty be for those who opt out of the booster club and then want to rejoin (most often the case is parents who opt out during the compulsory years and then want in when their child starts traveling)?  And how about the penalty for those who breech their contract (actually join booster club and then quit) and then opt in again in a future competitive year?  And when should the new rules be effective?  Should those who opted out this year have to "pay" the penalty (or buy-in) or should everyone be given a mulligan since they did not know?"

2) The booster club as it stands now has 2 levels of membership:  a) inactive:  they are required to perform 25 hours of volunteer service and receive some funds for costs such as USAG fees, uniforms etc (these fees are not paid directly to the parents.)  b) active status:  this involves that families do 25 hours of volunteer work and then participate in our primary fundraiser for a specified amount of time each month.  Those who have volunteer positions that require more training in our fundraiser, are required to work less sessions.

Those who do not complete their required hours are billed at the end of the club's fiscal year.  ($20 per hour not fulfilled.)

Is it acceptable to have multiple "levels" of participation in a club?  Active members in our club receive more benefit.

3) Consideration is being given to excluding parents from Booster Club membership for 2 years if they opt not be be an active member for a competitive year.  Is this acceptable?  

I do not want our policies to jeopardize our standing with the IRS.  I certainly appreciate your expertise and input on these questions!

Jen J.

My summary of IRS regulations relating to 501(c)(3) booster organizations is at and you may be interested to read that. You will see there that all of the provisions that you asked about are prohibited for 501(c)(3) booster organizations, which may not give more benefits to families in exchange for money or work.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

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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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