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For Parents Another Booster Club Question

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GymJudgeMom

New Member
Former Gymnast
Proud Parent
Judge
Jul 17, 2007
45
It seems as though most 501(c)(3) non-profit Booster Clubs out there are using fundraising to benefit only the families who are members of the Booster Club. Meaning, you earn points by volunteering, which translates into dollars in your daughters individual account to cover her portion of coaches travel expenses. If you choose to NOT become a member of the Booster Club, you do not share in the fundraising profits.

This goes against everything I've read about 501(c)(3) non-profit regulations. It is my understanding in having this non-profut status, you are basically considered a charity - a foundation created to promote the public good, not for assistance to any particular individuals.

The Club does not have to offer grants equally to all athletes. The Booster Club may pay coaches fees for some and not others. But the key here is you cannot NOT offer "grants" to athletes based on their parents lack of involvement in the Club - or even their lack of membership in the Club. (As you cannot force the parents to be members of the club.)

Our club is also 501(c)(3) non-profit. And we too have the parents who shoulder the bulk of the workload, as well as the slacker parents who participate minimally when begged to do so, if they choose to participate at all. This of course creates great tensions within the Booster Club. However, due to the restrictions placed on us by having this non-profit status, we don't see any way around it.

So how is it that all of the 501(c)(3) non-profit Booster Clubs out there are getting away with using these points systems which then only benefit the members of the club? I'm all for such a points system, but then again, I'm one of the parents that is happy to devote my time to the group. If I were a slacker parent who has been sitting back reaping the benefits without lifting a finger, I would then have a problem with implementation of such a system.

Any suggestions or info on how the other non-profit clubs are getting around this problem would be greatly appreciated!
 

gym law mom

Active Member
Proud Parent
Dec 23, 2006
2,527
Country
USA
Our booster club has a general fund, individual accounts and a bingo account. The bingo per state law must be kept seperate. Splits from fundraisers go into the general account and individual accounts regardless if you are a "member" of the booster club. In other words if your child is on team and you sell some leos at a leo sale, your dd will get 60% and the booster club gets 40%----so the child gets some money whether parents are booster club members or not. Fundraisers are open to all. Also profits from meets go into the general fund. Really the only difference between being in the booster club or not is whether the parents work bingo. If you choose to, then meet, coach and travel expenses are paid for your child from that fund. If parents decide they don't want to work bingo then they pay all those fees.

The general fund also buys things for all the team girls regardless of booster club membership like team practice leos, warm ups and several social events.
 

GymJudgeMom

New Member
Former Gymnast
Proud Parent
Judge
Jul 17, 2007
45
My concern here is when any portion of the profits earned as a result of a non-profit fundraiser goes into an individual account, it goes against 501(c)(3) guidelines. Whether 100% or a portion of the monies raised is funneled directly into an individual's account, it is done so as "payment" for having participating in the fundraiser. And therefore as "payment" for said participation, would be taxable income. As a result, the monies earned (be it 100% or a portion of) are for the private benefit of the club members, rather than the entire group as a whole. This method of payment directly into individual accounts penalizes those who either did not participate, or are not members of the club in the first place. Doesn't this go against 501(c)(3) guidelines?
 

pwmay

New Member
Aug 24, 2008
8
Royse City, Texas
You are correct GymJudgeMom. The booster clubs which are allowing individual accounts to accept non-profit monies (telling contributors that the donations are tax exempt and not paying income tax on the individual account's contents) are putting the non-profit status of the booster club at risk. Some clubs have been slow to correct this practice perhaps hoping they won't get caught, everyone else does it, we'll only change if we do get caught etc, but I wouldn't join a club which operates that way.

There is a good article dicussing this issue at the following website: http://jkn.com/View?j=842129.169787694498

More articles about 501(c) as it relates to gymnastics booster clubs can be found at:
Nonprofit Law: Gymnastics parents assoc 501c3, irs 501 c 3, irs regulations
and
http://viewer.zoho.com/embed.jsp?f=aDebbe
 

GymJudgeMom

New Member
Former Gymnast
Proud Parent
Judge
Jul 17, 2007
45
Yes, I've come across most of the information available on the web through research of my own. Since obtaining our non-profit status a few years ago, our club has pretty much followed the rules as explained in each of those links. However, with each passing year, the animosity grows between the weight bearing families and the slacker ones who seem to have no moral or ethical problem with sitting on their xxx's with their hand out, yet never lifting a finger to help the group. Which has led to the search for any loopholes that would allow any type of a points system to reward the efforts of the loyal volunteers, over and above what is being divided up amongst all athlete families without regard to whether or not they've participated in fundraising events, or are even members of the club. Is this allowed?
 

pwmay

New Member
Aug 24, 2008
8
Royse City, Texas
I wonder if this would be a legit activity for a Booster Club (BC)? Use the BC to establish and maintain money accounts for each team athlete whether they are in the BC or not. In addition, use the BC to prepare a set of materials which are made available to all athletes which solicit donations for each athlete.

These materials could be such that they could be used anytime, including at Booster Club fundraisers. While you are selling someone a non-profit cookie, hit them up for a gift for your DD (whose picture is on the button you happen to be wearing).

The money collected would go to your DD's account and because it is a gift, it is tax free to your DD. It would not be tax exempt to your contributor, but most people wouldn't care for small donations.

The approach here is based on the old proverb which says: "If it is not legal give the hungry members of your BC a fish, it may be legal to give all hungry people a fishing pole and show them where the fish are".
 
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