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Nonprofit Law/Gymnastics Booster Club


We belong to a for profit gym where my daughter is on one of the competitive teams.  There is a separate Parent Booster Club with a 501 (C) (3) status that does fundraising and offsets the costs of competing for all team gymnasts.  I have 2 questions: 1) Since the booster club cannot require membership, can they require all team parents (whether you signed the membership paperwork or not) to pay an "administrative fee" of $60 annually that goes towards the expenses of running the booster club? 2) With regard to pass through assessment fees that each gymnast incurs (meet fees, coach fees, etc) at what level does it call into question that it is not incidental?  For example, if total fundraising is approx $10k and the pass through assessments total approx $100k, would we be in danger of the IRS failing us on the balancing test and deem that fundraising is not our primary purpose?  Thank you for your time.

My summary of IRS regulations relating to 501(c)(3) booster organizations is at and you may be interested to read that. Families can not be required to pay anything to a 501(c)(3) organization if they don't want to be members. Therefore, they can not be required to pay a $60 administrative fee if they do not become members of such an organization.

I have never seen anything close from the IRS where they would attempt to revoke exemption from a 501(c)(3) organization simply because they had a very large amount of pass-through items.  Especially for booster organizations I do not see any issue, even if the pass-through amounts are 10 times the income items.  By the way, I suggest that, as your booster organization is legally obligated to pass on the funds, that you should record an asset and a liability for cash for each transaction as you are holding the funds in trust.  They do not result in income or expenses. As stated by CPA, Louis Gutberlet, "pass-through items or reimbursable expenses are assets, not expenses."

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


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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