WAG Non-profit booster club concerns

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chalkymama

Proud Parent
Aug 4, 2016
5
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My partner feels that my daughter's booster club is not operating in compliance with 501c3 guidelines/rules. Some areas of concern that my partner mentioned to me include:

-Parents are required to join the club or their children are not allowed to practice with the team.
-Parents are required to sign a contract in order for their daughter to be on team.
-Parents who leave the gym must pay full assessment and are threatened with legal action if they don't.
-Parents must attend meetings or they are fined.
-All parents are required to participate in mandatory fundraisers or they must pay a flat fee for each mandatory fundraiser that they don't participate in.
-Parents are charged an assessment and can fund raise directly toward paying it off.
-Individual accounts are kept and credited individually based on how much a family raises.
-Employees of the club sit on the board and handle the non-profit's finances (treasurer).
-Gym owner sits in on all booster club meetings and prohibits girls from practicing if contract isn't signed.

Has anyone ever had any experience with a booster club like this? Is all of this allowed in 501c3s?
 
I am not sure about all of them. but the following ones are in direct violation:


-All parents are required to participate in mandatory fundraisers or they must pay a flat fee for each mandatory fundraiser that they don't participate in.
-Parents are charged an assessment and can fund raise directly toward paying it off.
-Individual accounts are kept and credited individually based on how much a family raises.
-Employees of the club sit on the board and handle the non-profit's finances (treasurer).
-Gym owner sits in on all booster club meetings and prohibits girls from practicing if contract isn't signed.

Has anyone ever had any experience with a booster club like this? Is all of this allowed in 501c3s?

These raise a huge red flag for me. some of the other things I have seen before...where the team and booster are intertwined. ours is not like this. you actually have to join the bc separate from the gym, and it is your choice.

However, fundraising cannot be mandatory. Individual accounts are very questionable. And the gym should not have any say in the club.
 
This is all kinds of wrong. The only one I am not sure about is #2 on your list. I have heard gyms require contracts with families but it has nothing to do whether or not there is a booster club.

All of the rest of these are grounds for losing 501c3 status.
 
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This is all kinds of wrong. The only one I am not sure about is #2 on your list. I have heard gyms require contracts with families but it has nothing to do whether or not there is a booster club.

All of the rest of these are grounds for losing 501c3 status.

The contract we are required to sign is a contract with the booster club, not the gym! The gym requires you to sign a contract with the booster club or your daughter cannot practice with the team!
 
The contract we are required to sign is a contract with the booster club, not the gym! The gym requires you to sign a contract with the booster club or your daughter cannot practice with the team!
The only thing we sign for the booster club is something that states that we understand the handbook. The handbook details the board positions, our meets that we host, fundraisers, etc.

It's not really a contract because we aren't obligated to do anything.
 
My partner feels that my daughter's booster club is not operating in compliance with 501c3 guidelines/rules. Some areas of concern that my partner mentioned to me include:

-Parents are required to join the club or their children are not allowed to practice with the team.
-Parents are required to sign a contract in order for their daughter to be on team.
-Parents who leave the gym must pay full assessment and are threatened with legal action if they don't.
-Parents must attend meetings or they are fined.
-All parents are required to participate in mandatory fundraisers or they must pay a flat fee for each mandatory fundraiser that they don't participate in.
-Parents are charged an assessment and can fund raise directly toward paying it off.
-Individual accounts are kept and credited individually based on how much a family raises.
-Employees of the club sit on the board and handle the non-profit's finances (treasurer).
-Gym owner sits in on all booster club meetings and prohibits girls from practicing if contract isn't signed.

Has anyone ever had any experience with a booster club like this? Is all of this allowed in 501c3s?

Every single thing on this list (except employees sitting on the non-profit board) is absolutely not allowed for a 501c3. Is the booster club a 501c3? Or is it just a non-profit? There is a difference. While the things you listed are unacceptable for a 501c3, most of them are okay for a non-profit.
 
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Oh the world of gymnastics booster clubs. I have learned more in the last 4 months since taking over as treasurer of ours. I highly recommend that parents educate themselves about the organizations they are a part of. It is all very clearly laid out on the IRS website. Most of what you describe is not in compliance with rules as noted above.
 
Wow, some of these seem a little ridiculous. Our booster club did recently change making it a requirement for team parents to work both of the meets that we put on or their daughter would not be a part of the team anymore. The main reason for this change was because we had a lot of families doing the "buy out" option for the booster club (where they would pay a certain amount each year and then not have to participate in working the meets or any fundraisers). However we ran into a lot of problems with that, mostly being trying to get the parents to pay at the end of the year. And for our gym it's not so much about the money it was more about needing the actual people to work the meets. And we also look at it as a great way for the team parents to get to know one another better, a team building experience sort of thing. So, while the team parents are required to work both of the meets that we put on (sometimes we do 3 meets, if we host a state meet), if they are going to be gone the weekend of the meet they can hire someone to work their shifts for them, but we no longer offer the buy out option. We also require all team parents to sign a form just stating that they are aware of the rules of the gym and the booster club. I wouldn't call it a contract, but we have had parents say that they weren't aware of certain rules and try to fight things, this is a way of making sure that that doesn't happen.
 
Wow, some of these seem a little ridiculous. Our booster club did recently change making it a requirement for team parents to work both of the meets that we put on or their daughter would not be a part of the team anymore. The main reason for this change was because we had a lot of families doing the "buy out" option for the booster club (where they would pay a certain amount each year and then not have to participate in working the meets or any fundraisers). However we ran into a lot of problems with that, mostly being trying to get the parents to pay at the end of the year. And for our gym it's not so much about the money it was more about needing the actual people to work the meets. And we also look at it as a great way for the team parents to get to know one another better, a team building experience sort of thing. So, while the team parents are required to work both of the meets that we put on (sometimes we do 3 meets, if we host a state meet), if they are going to be gone the weekend of the meet they can hire someone to work their shifts for them, but we no longer offer the buy out option. We also require all team parents to sign a form just stating that they are aware of the rules of the gym and the booster club. I wouldn't call it a contract, but we have had parents say that they weren't aware of certain rules and try to fight things, this is a way of making sure that that doesn't happen.

It is my understanding that if your booster is 501c3, membership and participation cannot be required in any shape or form.
 
Wow, some of these seem a little ridiculous. Our booster club did recently change making it a requirement for team parents to work both of the meets that we put on or their daughter would not be a part of the team anymore. The main reason for this change was because we had a lot of families doing the "buy out" option for the booster club (where they would pay a certain amount each year and then not have to participate in working the meets or any fundraisers). However we ran into a lot of problems with that, mostly being trying to get the parents to pay at the end of the year. And for our gym it's not so much about the money it was more about needing the actual people to work the meets. And we also look at it as a great way for the team parents to get to know one another better, a team building experience sort of thing. So, while the team parents are required to work both of the meets that we put on (sometimes we do 3 meets, if we host a state meet), if they are going to be gone the weekend of the meet they can hire someone to work their shifts for them, but we no longer offer the buy out option. We also require all team parents to sign a form just stating that they are aware of the rules of the gym and the booster club. I wouldn't call it a contract, but we have had parents say that they weren't aware of certain rules and try to fight things, this is a way of making sure that that doesn't happen.

I don't know all the ins and outs ...... but I don't think they can do that.
 
It is my understanding that if your booster is 501c3, membership and participation cannot be required in any shape or form.

Correct. If it is a 501c3, they cannot require membership, participation, or a buyout from participation.

But not all non-profit boosters are 501c3s.
 
What are the benefits of being a 501c3 versus a nonprofit? Do nonprofits still pay taxes? I honestly get a vibe that it's usually gym owners and those close to the finances of the gym that push for and love their boosters to be 501c3s, whereas the individual members, who have to do all this stuff only to have it split up equally between them and those who do nothing, hate them. I totally know of gyms who do almost all the stuff in the OPs post that claim 501c3 status - they even put it on web sites and stuff. Is it possible to have a booster association where some fundraisers and activites are just a regular nonprofit, but other fundraisers (like meets) go through a 501c3?
 
Is it possible to have a booster association where some fundraisers and activites are just a regular nonprofit, but other fundraisers (like meets) go through a 501c3?
Yes, we have ours split. Some fundraisers, like the typical "selling stuff at work" type fundraisers, goes into gymnasts individual accounts to pay for meet fees or whatever. This is NOT a non-profit and parents should (in theory) be paying taxes on this money. Other fundraisers, like profits from our home meet, pay into our nonprofit booster club and that pays for stuff that benefits the entire team. No, you can't require anyone to participate and yes, that means that the same group of parents end up pulling the weight for everyone else. Not ideal, but legal. Sometimes groups do get slammed with massive fines for ignoring the rules, even school groups who you think might get cut a bit of slack, so I wouldn't risk it, even though "everyone else is doing it."
 
I don't think it is all in violation. The GYM can require that parents be a member of the booster club and require volunteer hours- they are a private club and can make whatever rules they want

A large local booster club is in charge of ordering all the competition leos, registering and paying for meet fees, and paying the coach's fees. The only thing that gets paid to the actual gym is tuition. The booster adds up all those costs and then splits it evenly for all team members as a yearly "assessment". So if you don't pay for your assessment, your gymnast can't compete - how could they without a leo or having paid for a meet?

Big fundraisers like a meet go towards the overall expenses and is therefore spread out evenly among all members. Individual fund raisers like selling stuff gets credited to each individual's account. Technically it should be reported to the IRS as income on their individual taxes.
 
I don't think it is all in violation. The GYM can require that parents be a member of the booster club and require volunteer hours- they are a private club and can make whatever rules they want

A large local booster club is in charge of ordering all the competition leos, registering and paying for meet fees, and paying the coach's fees. The only thing that gets paid to the actual gym is tuition. The booster adds up all those costs and then splits it evenly for all team members as a yearly "assessment". So if you don't pay for your assessment, your gymnast can't compete - how could they without a leo or having paid for a meet?

Big fundraisers like a meet go towards the overall expenses and is therefore spread out evenly among all members. Individual fund raisers like selling stuff gets credited to each individual's account. Technically it should be reported to the IRS as income on their individual taxes.

If the booster is not a 501c3, the gym can require booster membership and "volunteer" hours.

Yes, the gym can make whatever rules they want. They can require parents to join the booster. The gym will not be the ones in violation of tax law, the booster will (if it is a 501c3). A private, for-profit club cannot legally require membership in a 501c3 booster. A gym not allowing a gymnast to compete because their parent didn't participate in the booster is not a loophole in the law. It does not matter whether or not the gym is a private club, requiring parents to join a 501c3 booster club essentially "connects" the for-profit gym with the non-profit booster and that violates the 501c3 requirements. If participation of the sport is contingent on booster membership, it is a violation. If benefitting from the booster is contingent on participation, it is a violation. Again, this is only if the booster is a 501c3.
 
Correct. If it is a 501c3, they cannot require membership, participation, or a buyout from participation.

But not all non-profit boosters are 501c3s.

Ours IS a registered 501(c)3 organization. If they cannot require these things, then why would they make us sign a contract agreeing to those things? Does that meant the contract is not legally binding since our contract is with the non-profit and not the gym? Can anyone send me a link to the IRS documents that detail this information?
 
Ours IS a registered 501(c)3 organization. If they cannot require these things, then why would they make us sign a contract agreeing to those things? Does that meant the contract is not legally binding since our contract is with the non-profit and not the gym? Can anyone send me a link to the IRS documents that detail this information?


that is correct- our 501c3 was audited twice by the IRS for violating some of these rules. here is a nice summary from USAG:

https://usagym.org/PDFs/Member Services/webinars/dec14.pdf


truthly, while the 501c3 booster club can not actually require you to do anything as noted in the document above, the gym/coaches could, conceivably, treat you differently if it's known that a certain family is not contributing. It would be difficult to prove that the coach did not allow a gymnast to compete due to the lack of participation by the parent.
 
that is correct- our 501c3 was audited twice by the IRS for violating some of these rules. here is a nice summary from USAG:

https://usagym.org/PDFs/Member Services/webinars/dec14.pdf


truthly, while the 501c3 booster club can not actually require you to do anything as noted in the document above, the gym/coaches could, conceivably, treat you differently if it's known that a certain family is not contributing. It would be difficult to prove that the coach did not allow a gymnast to compete due to the lack of participation by the parent.

Thank you for the link to this article. Very informative! Our contract with the 501(c)3 booster club (that the gym owner requires us to sign) states that our daughter will not be allowed to participate in practice and will receive NO team benefits such as inclusion in team events and payment of meet entry fees unless we sign the contract and pay the specified amounts. The same is stated in our team manual as well as in emails from the owner. So it probably wouldn't be difficult to prove since I have it in writing from both sources.

So does signing this contract with the booster club really mean anything, since the non-profit booster club is clearly not operating in compliance with IRS rules by even asking families to sign a contract, requiring participation by parents, not allowing girls to practice if the parents don't join, requiring fundraising, and charging fees and penalties for breaching? They even state that if you leave without paying, they will sue you for assessment fees and require you to pay their legal costs if they have to hire an attorney....
 
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