How do booster clubs work with cheer gyms?

Cheer4Life · Member

RE: How do booster clubs work with cheer gyms?

lifelovelive · Member

that is fantastic!! Thank you I am sure many parents appreicate all your hard work!!

MissCongeniality · Veteran Member

Cheer4Life wrote:
lifelovelive- yes we provide a break down to the gyms when the check is written to the gyms. And yes a very small % of each event worked goes into the general fund. That money goes for expenses it takes to run the corporation or we donate back to our members. We dont care what gym, dance studio or gymnastic facility you are from. The focus is to provide opportunties where parents/guardians can fundraise to offset the expense of competitive cheer, dance and gymnatics. Seeing the athletes on the floor smiling and performing is all worth it!

I guess I am still confused as to how this gets around the 501 c 3 requirements (If you are organized as a 501c3) I was under the understanding that you can not tie any funds to accounts based specifically on whether (or not) someone worked to raise those funds. That the majority of funds raised had to go to the general fund and mission not individuals. (That whole Gymnastics gym example on the IRS website). Does keeping the organization separate from the gym allow this more individual fundraising to be ok? I know there are several organizations that operate under this model.

fourcheer · Newbie

Cheer4life, you say you are an ED for a nonprofit. Google "Fund-raising takes a hit". It is an article regarding booster clubs in Kentucky. A Lafayette booster club was hit with huge fines and penalties ($39,000) in 2008 from the IRS for doing exactly what you say you are doing. They were audited by the IRS who said benefits to individual parents are illegal unless they pay taxes on the money. You are basically "paying" them to work, but instead of them getting the money directly, you credit their account. You are creating a tax shelter. They no longer give parents credit, it all goes into one pot and is split equally, no matter who did or did not work.

I am involved with a booster club and want to do things right. However, its very difficult to do because there is such conflicting evidence.