WAG Booster Club Question

[raenndrops]

I doubt it's legal when a nonprofit requires a financial commitment from a specific person to enable that person to benefit from their non-profit status. It amounts to an individual converting income that's subject to tax into income that's become a donations and therefor a ta deduction. If that's allowed then all I have to do is get a hold of b/c that would receive all of my wages as a donation and then return 95% of that income. They make 5% and I save a bundle on taxes........

See you at Club Fed

they dont get to count the buyout as a donation. and their $500 is divided amongst the whole team... the $500 just means they dont have to sell candy bars and wrapping paper to support the team... (so it is like they bought $500 worth of candy bars and threw them away).

 

[iwannacoach]

I like candy.......

 

[raenndrops]

^^^^^^^^ I'm allergic to chocolate... but I have been known to buy candy bars for various groups and giving them to my gymmies

 

[txgal]

The issue here isn't so much about the tax status of the BC--we have a terrific CPA who does all that for us. The issue is that the meets the gym hosts are significant money-makers for the BC (usually several thousand dollars). What has happened in the past is that the same group of parents do everything for the meet and have accordingly reaped the rewards. However, in light of the recent court ruling, now the parents who do nothing throughout the year to contribute to the success of the gym or the BC will now be treated as equals to everyone else. What I foresee happening is that the parents who have helped make the gym what it is and have given it the clout it has to pull teams in from across the state will stop as there is no incentive for them and everything will crash and burn.

I understand if some parents want to pay all their fees out of pocket (this has been my choice), but if one of the requirements of being part of the team is to put in your volunteer time, it should be done. I don't know that the owner would remove anyone from the team for not participating in gym events, but I can see that would be severe enough to convince parents to at least do SOMETHING more than simply dropping their kid off and picking him/her up for practice.

 

[happychaos]

I do not want to sell wreaths, candy, wrapping paper, jewelry, magazines or anything else. It boggles my mind that some families get so into these things, but whatever. I hate it when someone else's kid asks me to buy their stuff, and I have no intention of asking my friends and family to buy the overpriced, unwanted stuff that booster club is selling. Lets stop all this nonsense, keep our money, stop annoying our friends, save oodles of time, and live happily ever after.

Working before and during meets is something I am willing to do for booster club. And it's not for the money, but to produce a successful, fun meet. Hiring a sitter for my other children likely costs more than the monetary benefit gained from the booster club.

My time is precious, and I already devote lots of time to DD's gymnastics, much of it spent in the car. My other children often need to ride along, and this is time that they sacrifice as well. If I am asked to give MORE time to gymnastics, it better be for a really good reason. I realize this sounds stingy, but my family time is extremely valuable to me, and I am not able or willing to spend an entire weekend working a meet. Perhaps when my other children are older. I realize there are families that are willing to work every session of a meet, and I absolutely think that they should receive a greater benefit.

We have a number of families in our gym that it is a real hardship to be asked to work a meet due to weekend employment. To miss a whole shift of work ($$$) is just not something they can swing.

 

[luvmygymdtr]

I do not want to sell wreaths, candy, wrapping paper, jewelry, magazines or anything else. It boggles my mind that some families get so into these things, but whatever. I hate it when someone else's kid asks me to buy their stuff, and I have no intention of asking my friends and family to buy the overpriced, unwanted stuff that booster club is selling. Lets stop all this nonsense, keep our money, stop annoying our friends, save oodles of time, and live happily ever after.

Amen sistah!!. This makes me nuts. Someone was pushing their loot today at work. I wanted to make them aware how many times I haven't asked them to buy some of the nonsense I have for sale, between skating-gymnastics-choir and school.
The fundraising is required with my daughter's skate team. And there is something every.single.month. So I buy $100 of whatever-it-is and then hand whatever-it-is out to whom ever will take it, as a gift. I would much prefer to pay higher fees then sell things to my friends, neighbors and family. When there's a bake sale I write out a $75 check....

 

[ivyagogo]

Wow, I had no idea about any of this stuff. We don't currently have a team and are only now starting up a small xcel team. We won't be hosting meets. I always thought a booster club was just a group of parents who fundraise and help out. I had no idea it was a whole legal thing.

 

[Becauseisaid]

I'm finding this discussion very interesting. DD's gym does not have a booster club and I've been wondering if it's something we're missing out on.

We have 1 fundraiser a year and a percentage of what you raise goes into your account. Sell nothing - get nothing.

Our gym also hosts 3 meets a year. Every family is required to "volunteer" for a 3 hour shift. That could be set up, during the meet, or tear down. Don't show up for your shift and your account is hit for $100. Several people prefer to pay local teens to work their shift. Regardless, the work has to be done and people have to be there to do it.

The "Work your shift or pay" program was set up about 3 years ago because the same 2 or 3 parents were the only ones volunteering to help at meets. Some parents bucked at first, but it's actually been very successful. Meets run smoothly and no one feels they are being taken advantage of.

 

[iwannacoach]

Maybe those who want to participate could seek non profit status for themselves as an indivual. As their own "non-profit" they could then enter into cooperative relationships with other non profit individuals and organiations.

I wonder if that's legal?

 

[roll123]

What is the new court ruling!

 

[txgal]

Sorry this is so long, roll123, but here's a brief discussion of the ruling:

The Tax Court decision in the case of Capital Gymnastics Boosters Club has not attracted much notice. I’ve been looking at it, because I find it slightly amusing, one of the three criteria I use in selecting cases and rulings to discuss. Professor Richard Wood of Capital University Law School seem to think it is a very big deal, though, so maybe we need to take it seriously. The issue is pretty simple. If an organization works on raising funds so that kids can participate in a salubrious activity, that is, in principle, an exempt activity. If each of the people working the fund raisers is doing it so their kid specifically can participate, that is another story. That’s inurement.

Capital Gymnastics Boosters Club had a relationship with a for profit entity called Capital Gymnastics National Training Center, which is referred to as Training Center. Having your kid participate in gymnastic competitions is expensive:

Each athlete’s family paid tuition directly to the Training Center, ranging in FY 2003 from $200 per month for the youngest age groups to $330 per month for the oldest age groups. The families also paid to third parties (not to the Training Center or Capital Gymnastics) other expenses, such as national dues, a registration fee of $100, the cost of specialized equipment such as grips and official gym uniforms, and the expenses of travel to gymnastics meets, including airline tickets, hotels, and restaurants for the athletes (and for their parents if they chose to attend the meets).

Then there is the cost of the competitions themselves. The booster club took care of that. Membership in the booster club was mandatory for parents of athletes who trained for competition at the Training Center.

The cost of membership in the booster club was $40 in annual dues plus an assessment of between $600 to $1,400 per year to cover entry fees and coach travel expenses. If the assessment including late fees were not paid, the athlete could not compete. Their were no scholarships.

This is where the fundraising came in. Capital Gymnastics’ fundraisers included selling wrapping paper, discount cards, cookie dough, candles, ornaments, and “scrip”. (Scrip is certificates sold for and redeemable at face value with a merchant. The merchant provides the scrip to the organization at a discount.) If the fundraising had gone towards reducing the assessments in general, there probably would not have been a problem. That was not the way it worked:

For the families that chose to fundraise, Capital Gymnastics awarded points in proportion to the fundraising profit that each family generated. Each point was worth $10. The chairperson of each fundraiser also received a small number of points as an incentive to manage the fundraisers.

Parents who did not participate in the fundraising—slightly more than half of the families—did not receive a benefit from the fundraising activities of the other parents. Rather, families who did not fundraise wrote checks to Capital Gymnastics for their full assessment amount.

This allocation of fundraising benefit solely to fundraising families was conscious and deliberate, since Capital Gymnastics explicitly prevented those it called “freeloaders” or “moochers” from benefiting from the fundraising activity of others.

The organization argued that this was not inurement since there was no way that the money would go to the parents. If they raised more than the current year assessment they got a credit for the subsequent year, but never a refund. They argued that this fund raising technique was actually a “best practice”. The Tax Court did not buy it:

In so holding, we do not criticize (except in the tax-exemption context) Capital Gymnastics’ “point” system. Parents who make a serious financial investment in the development of their children’s athletic abilities should be free to arrange that activity in the manner they choose. The arrangement that Capital Gymnastics developed may well be a rational, wholesome, just, and efficient fundraising method (a proposition as to which we have no jurisdiction to make a declaratory judgment); but even if so, it does not further a tax-exempt purpose. Capital Gymnastics’ arrangement reflects instead the purpose of promoting the financial interests of its fundraising members.

Is This A Big Deal ?

Given the numbers involved, I was puzzled why this went to Tax Court. Professor Wood, as I noted, thinks this is a big deal:

This decision may have far reaching consequences. 501(c)(3) organizations that compensate those who assist with fundraising activities by reducing fees or other payments may risk losing their tax exempt status. Schools that provide tuition relief for parents who assist with fundraising may be particularly vulnerable. Additionally, those who work as fundraisers in exchange for reduced tuition or fees will be required to report taxable income.

Apparently there are quite a few booster clubs out there. If you put “booster” as a search term into GuideStar, you get 11,781 results (For comparison “hunger” yields 1,901). Of course many of the 11,781 are organizations of an entirely different nature such as Seminole Boosters Inc. and Gator Boosters Inc, which each gross over $30 million. Still ParentBooster USA, which does serve similar organizations, has over 1,400 members. PBUSA cautions against the use of “individual fundraising accounts” in its introductory material, so I suspect that the practice is fairly widespread.

From:
http://www.forbes.com/sites/peterjr...aising-money-for-your-own-kid-is-not-charity/​