Can gym owners make it a requirement that a gymnast join the booster club?
Answer 1. 100% of the surplus from the pizza sales would need to go into the general fund. You may want read more about Fund-raising issues of 501(c)(3) organizations www.irs.gov/pub/irs-tege/eotopicl82.pdf on page 8: Some factors to consider in determining whether a particular activity is fund raising are the following: 1. Occasional activity of a nature not usually considered to be commercial; 2. Members volunteer substantial services, so far as practical under the circumstances; 3. Advertising in programs is of the type usually regarded as charitable contributions; 4. Merchandise which is donated or furnished at cost; 5. This does not preclude the payment of reasonable rents, fees for professional services, and reimbursement of members for out-of-pocket expenses. Where an income-producing activity is conducted primarily in the manner set forth above, the Service takes the position that the activity is allowed as “fund-raising” instead of being unrelated business. fund-raising issues
