WAG Non-profit booster club concerns

[tomtnt]

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....

unfortunately, your gym has co-mingled the non-profit/fundraising component of the booster club with the competitive assessment/fees of competing.

They definitely have a right to charge an assessment fee to cover meet fees, coaches travel expenses, etc.

They do not have a right to force you to join the booster club, participate in the booster club, or contribute to the booster club. Furthermore, they can't deny you booster club priveledges even if you don't participate in fundraising. ie, EVERYONE in level 5 gets $300 - not just the ones who fundraise.. That is the disadvantage of being a 501c3 - the advantages include not having to pay taxes, donations are tax-deductible for donors.

Unfortunately, your booster club will not be very successful if everyone decided to not participate in fundraising.

 

[Gymmommy71]

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....

Gosh - that's very threatening language for a booster club contract that is supposed to be for a positive and fun activity. Threatening to sue for attorney's fees if a young child wants to quit mid year!? That's taking it a little too far IMO. If you haven't signed the contract yet and it makes you uncomfortable, maybe look into other gyms (especially if this would be the kids first year on the team). Unless all of the gyms in the area have such language in their contracts?

IMO, if a gym/booster club is suing its (ex)costumers so much that they are putting lines about attorneys fees in their contracts, that doesn't really sound like a fun organization to be a part of.

 

[berrisweetness]

@skschlag
Yes 501c7, I know there are several different ones. I was reading on line that an attorney could not work for free for a booster club any more and he suggested they go 501 C7. Does any one know the benefits/ differences?

 

[tomtnt]

@skschlag
Yes 501c7, I know there are several different ones. I was reading on line that an attorney could not work for free for a booster club any more and he suggested they go 501 C7. Does any one know the benefits/ differences?

one of the biggest benefit of a 501c3 is the ability for donors to deduct their donations. our booster club receives corporate donations as well as smaller donations from local businesses - they would be unlikely to make these donations if they couldn't write it off. donations to 501c7 are not tax deductible.

http://homeschoolcpa.com/compare-501c3-charity-to-501c7-social-club/

 

[berrisweetness]

Thank you for that link it was informative. Although we do some fundraising most of our funds come from the parents themselves. We don't get donations from any businesses and you are right probably because of the tax write off. We have had a few businesses to sponsor a kid but it was $500 or less nothing higher because of the write off.

 

[Gymmommy71]

Thank you for that link it was informative. Although we do some fundraising most of our funds come from the parents themselves. We don't get donations from any businesses and you are right probably because of the tax write off. We have had a few businesses to sponsor a kid but it was $500 or less nothing higher because of the write off.

Wouldn't sponsoring a specific kid be illegal for a 501c3? If that were allowed, couldn't any parent who's part of a 501c3 claim that they are a "sponsor" of their own child and claim their entire booster obligation as a deduction on their taxes? Heck, throw in travel expenses and other stuff and this could be a substantial deduction. I thought someone once told me that this is one of the big reasons behind the "everyone must share in the benefits" rule - so rich people don't do this - make a big donation to the 501c3, but it's really just paying their meet fees for their kid.

 

[berrisweetness]

Are you talking about C3 or C7?

 

[berrisweetness]

501 C7 is a little different then 501 C3 from the what I Have been reading. And been inquiring about.

 

[chalkymama]

Update:

So we left this gym....horrified to learn that the owner is being sued by a former student/employee (lawsuit of a very sensitive and upsetting nature). Also come to learn that 2 other inappropriate situations have occurred where the owner has made disgusting/inappropriate comments/actions while coaching team (both of those students left as well). Interestingly enough, the non-profit booster club is requiring payments from us when nothing was even paid out for my child for this season--we left before anything had even been scheduled for this meet season. They are actually billing us and trying to charge fines and penalties for late/missed quota payments, missed meetings, missed mandatory fundraising...etc...I thought that 501c3s weren't allowed to do ANY of this!!!!

There is no way in good conscience I could ever fund this organization with the information I have regarding the owner of the gym that this 501c3 non-profit is associated with (Gym club owner sits in on all the meetings and influences all decisions...he and his wife really run the booster club by appointing officers and designating where funds will be spent...balancing booster accounts...etc...) I am puzzled as to why other families would continue to support this organization, but even more puzzled as to why this booster club would continue to violate IRS 501c3 rules and try to come after us for money (I checked and they are indeed registered as such)! I feel like if I would make a payment I would be supporting an illegal organization that is supporting an unethical gym owner, so I am struggling with this situation. Oh yeah, and also on the bill they sent us it states that my daughter will be prohibited from participating in team activities until we pay them...

...news flash...WE ALREADY LEFT! She doesn't WANT to participate in team activities there!!! I swear I am in the twilight zone....

Any suggestions on how to handle this situation?

 

[raenndrops]

Reply that she left x months ago. Thank them "for all they did" and tell them you now consider the matter closed.
The only way for them to even try to get the money back would be to take you to court... Where the illegal 501c3 status would obviously come out and they would be in a much worse position, so the odds are good that that won't ever happen.

 

[Aero]

Update:

So we left this gym....horrified to learn that the owner is being sued by a former student/employee (lawsuit of a very sensitive and upsetting nature). Also come to learn that 2 other inappropriate situations have occurred where the owner has made disgusting/inappropriate comments/actions while coaching team (both of those students left as well). Interestingly enough, the non-profit booster club is requiring payments from us when nothing was even paid out for my child for this season--we left before anything had even been scheduled for this meet season. They are actually billing us and trying to charge fines and penalties for late/missed quota payments, missed meetings, missed mandatory fundraising...etc...I thought that 501c3s weren't allowed to do ANY of this!!!!

There is no way in good conscience I could ever fund this organization with the information I have regarding the owner of the gym that this 501c3 non-profit is associated with (Gym club owner sits in on all the meetings and influences all decisions...he and his wife really run the booster club by appointing officers and designating where funds will be spent...balancing booster accounts...etc...) I am puzzled as to why other families would continue to support this organization, but even more puzzled as to why this booster club would continue to violate IRS 501c3 rules and try to come after us for money (I checked and they are indeed registered as such)! I feel like if I would make a payment I would be supporting an illegal organization that is supporting an unethical gym owner, so I am struggling with this situation. Oh yeah, and also on the bill they sent us it states that my daughter will be prohibited from participating in team activities until we pay them...

...news flash...WE ALREADY LEFT! She doesn't WANT to participate in team activities there!!! I swear I am in the twilight zone....

Any suggestions on how to handle this situation?

DISLIKE!!!

This is really terrible news, and I'm sorry you're going through this. As far as suggestions on how to handle the situation, you already did. You left. Set your sights on better horizons now. There are definitely many other great gyms out there.

 

[Gymmommy71]

Omg that has got to be sooooo frustrating. I agree write back, and maybe even send it certified mail so they can't claim they didn't get it, saying your daughter was done on whatever her last day was, that she is not a part of the team, and that you do not owe the money for which you have been billed.

Then you just wait and see if they are stupid enough to try and sue you. If they actually do, I'd probably report them to the IRS for 501c3 violations between the time you get the papers and the court date.

What jerks!

 

[MaryA]

There's no way they will sue you. Even if they were in the right (which they aren't) it wouldn't be worth the time and money it would take to take you to court. We own a small business and have a (former) customer who owes us about $1400 (very straight forward... we sent them stuff, they never sent us money or sent back the stuff). We talked to the small business assistance office at a local university about whether or not we had any recourse for getting it back and were told, no, not without shelling out that much or more on lawyers. So yes, I would say to send them a letter frankly stating that you have no intention to pay, and hopefully that will be the end of it. If they keep sending you bills, you can write "return to sender" on them and send them back.

Did you find a new gym?