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Nonprofit Law/Can a 501c3 make volunteering and donations of products or money mandatory?

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QUESTION: Our Band Parent Association recently converted to a 501c3 but not many parents are actually aware of this, and is now sending out emails saying fundraisers are mandatory for participation and mandatory minimum of sales or a required buy-out option no exceptions. after every announcement are the words mandatory, required, buy-out and other terms used to force money and participation. while no board member will allow themselves to be caught on record saying this...they have said to individual parents that they will make their child sit out of games, competitions or parent paid school sanctioned trips if they are "disobeyed". our group is not billing itself as a booster club nor are we a pay to pay band as it is a graded class in the pa school curriculum.  please help me figure out the truth. thank you.

ANSWER: "True volunteer firefighters do not receive, or have an expectation of receiving, compensation."
page 9 of http://www.irs.gov/pub/irs-tege/win03_fslg_ng.pdf

If there is a requirement to work in order for the family to get benefits, then that is not "volunteer" work. It appears that you already know that a 501(c)(3) booster organization may not require work for benefits. 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 as it covers the issue.

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

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

QUESTION: Thank you, but as it is not a booster organization i am still a bit confused. Do booster regulations apply to a non-booster 501c3 association? And im still unclear if they are allowed to demand mandatory/required volunteers or money/donations.

Answer
A parent association is a booster organization if it is set up and operates so that it mostly does not run its own activities for youth but raises funds to give to the another organization, like the school district, that is conducting the activities for youth.

No. A 501(c)(3) booster organization may not require mandatory work or fees from families as a condition to the granting of benefits to their family.  As in my summary of IRS regulations relating to 501(c)(3) booster organizations at http://goo.gl/IdQwML
--- Start of excerpt ---
In denying exemption to a purported 501(c)(3) booster organization in 1992, the IRS at http://www.irs.gov/pub/irs-lafa/den1646r.pdf on page 6 stated "The reason you were created and your method of operation indicate that you are made up of a group of parents who have joined together to work cooperatively to provide funds to pay for the participation of their children in athletic events. The expenses incurred by these children would otherwise have been paid by the parents.  All parents of competitive team members are automatically members of your organization.  Accordingly, members expect to receive a benefit in return for their membership.  You pay no benefits to non-members."
-- End of excerpt ---

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. 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

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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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