Off Topic Nonprofit orgs paying for sports, education

[Pirouette]

I read some old threads but didn't find the information I'm seeking.

I used to work concessions at concerts and pro sports games through the gym booster nonprofit to help cover costs for meet fees, leos, etc. The booster club was really good at keeping themselves (and all of us) legal.

Now my gymnast has graduated and is off to university in a month (!!). A coworker of mine runs a nonprofit where the members use the fundraising to pay for their child's sports fees, educational expenses for private school or university, and other expenses like that. I believe all checks from this nonprofit must be made out to other nonprofit organizations. I do not know any other details at this time.

I always enjoyed working concessions and would be willing to do it again except I am nervous about the legality of this friend's nonprofit procedures. The members come from all different sports and schools. I haven't done enough research to see how this type of fundraising is regarded in terms of FAFSA and filing taxes. I have no desire to get on the IRS's bad side, lol.

Can anyone offer any information, advice, suggestions?

 

[MILgymFAM]

Following. My daughter is considering doing something like this to cover her summer dance training next year. It all seems more shrouded in secrecy in terms of how it actually all works than I’m comfortable with, but it also seems like a great opportunity.

 

[Pirouette]

I wish it were less complicated. College is expensive and this sure would help.

(And I vividly remember the cost of pointe shoes and dance training, so I hear you on that! )

 

[B&M's mom]

You should probably consult with a qualified tax attorney or accountant about this. When my DD's booster club did a deep dive into what they could and could not fund, we learned that there are a lot of rules concerning payments for individuals. You can't funnel money for your child through a non profit, rather the non profit has to benefit an entire class. (Note, there are different kinds of non-profits with different rules. This applied to our club). We ended up working with tax attorneys to make sure that our nonprofit was operating properly. You really, really don't want to run afoul of the IRS. I speak from personal experience of inadvertently failing to include an income source that ended up costing me a lot in penalties even though I immediately amended and paid the missing taxes.