Non-Profit Distribution Requirement (Parent Association)

[vagymmomma]

Does anyone know what the requirements are for using funds received by a non-profit (501(c)(3)) parent association? We want to make sure we're spending everything we are obligated to and I'm not sure where to find guidance on this (some parents are thinking it's 80% of contribution/fees received). I tried looking at publications on the IRS website and didn't find anything specifically on point. Any guidance where to look would be greatly appreciated.

 

[gymdog]

Well a private foundation has to spend 5% of its endowment towards its purpose annually in order to avoid certain taxes. I'm not sure if public charities (the IRS distinguishes between public charities and private foundations, because private foundations are subject to some more regulation) have the same kind of requirement like that. In other words you might be looking for the wrong thing (but I'm not 100% sure). Unless they have an endowment, non-profits typically are paying out a lot of what's coming in, so I've never seen this come up personally.

 

[vagymmomma]

Gymdog - thank you for your response.

As far as I can tell, our parents association has always filed as a public charity, so I don't think the PF rules are applicable. I've been asked to look at the financials at a high level, and I'm trying to make sure I'm as informed as possible. I'm a CPA but specialize in taxable entities, so I'd appreciate any insights people may have on parent association filing and compliance requirements.

Have your parent associations encountered any hiccups from a compliance and reporting perspective that we should be aware of? We're definitely filing tax returns so that's a good start.

 

[Gymdad2]

Hi,

I have been involved with a 5013c booster club for many years, and I have never heard any mention of a requirement about spending any percentage of income.

 

[Deleted member D3987]

this stuff should not be opined here on this site. go to www.irs.gov and you can look up 501c3 stuff and the various differences.

then you must do the same with your ??? state department of revenue. sometimes the rules vary depending on the state and how they relate to the feds.

 

[Mariainlv]

I have to agree with Dunno. There is alot done with booster clubs that is in direct conflict with IRS rules.

In reading other threads here on the CB, there seems to be a misunderstang of the rules.

Good luck!

 

[vagymmomma]

this stuff should not be opined here on this site. go to www.irs.gov and you can look up 501c3 stuff and the various differences.

then you must do the same with your ??? state department of revenue. sometimes the rules vary depending on the state and how they relate to the feds.

I certainly wasn't looking for any specific guidance (I understand facts make a HUGE difference in tax matters). I'm rather astonished how little guidance there is for 'organizations fostering national and international amateur sports competition'. I'm a licensed accountant and I'm confused by the rules! I have to imagine there's a lot of confusion out there.

Thanks for the input everyone.