Fall Fees and non profit questions

[Old Darter]

There is a lot more to this than just charitable donations, and the IRS is not the only government agency monitoring status. All the IRS really does is exempt you from taxes because you are a registered non-profit. They do that under section 501c3 of the tax code. But registered with whom?

In California, it is the Office of the Attorney General, Registry of Charitable Trusts. THEY are the ones that grant non-profit corporation status. And they also require YEARLY filings, including all of the forms previously mentioned. The AG/RCT does keep pretty good track, within a year or two. http://rct.doj.ca.gov/MyLicenseVerification/Search.aspx?facility=Y

The other thing to remember is that in the forms filed annually with both agencies you are required to name those individuals responsible for the management of the Charitable trust. Those individuals are legally on the hook should a finding be made of wrong doing. Normally an organization annually buys insurance (Bollinger) for their Board of Directors to cover the officers in the event they are named in a lawsuit for some reason. I doubt Bollinger would write the policy to a "for profit" organization. Or if they did, it would be extremely expensive. (Raise those players fees a little higher!)

The team and organization can still continue, they just have to pay taxes. Those operating as officers are going to need to pay the taxes (as signatories on the team bank accounts) if they continue to operate after losing their non-profit status.
(Raise your players fees a little higher!)

Do your parents work Bingo (outside a team Bingo)? Does the Bingo they work at send a check to your organization? Only if your organization is another 501c3 exempt Charitable Trust. If not, the Bingo hall cannot legally transfer those funds to a non 501c3 Charitable trust.

I could go on, but you get the point.....not the least of which is that a 501c3 exempt Charitable Trust does have governmental oversight at some point, the "for profit " organization does not.

That all said, an organization that is not a non-profit is not illegal, if that is what you are worried about. Now if I was the president of that org, I'd be a little concerned given the Bucket exposure now raised.