Help! No 501c3...fundraising, do we need to get one?

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Jan 23, 2014
248
0
I'm close to going crazy here😂 My daughter's on 2nd Year 12A team. We are in an origanization, it seems to offer nothing but name recognition. The org is not a 501c3. The excuse they gave the coach is that teams change too often and even if the teams stay, the coaches may change, so it's too difficult for them to do it. A couple parents on the team have discouraged the coach from gaining the status on our own as they said it's so much work, and too much trouble. Is it really that much trouble when a majority of teams who play at a higher level in the area seem to have the nonprofit status? I'm not sure everyone is aware of the opportunities we miss by not being registered. We are currently planning a poker night, which we are required to seek donations for. I just see the girls getting shut down over and over when asking for donations since businesses won't be able to write it off. Any ideas, words of wisdom, etc? Thanks
 
Nov 2, 2015
192
16
You cannot be a 501c3 as a softball organization. You could apply for a 501c7, I believe, which would mean the team wouldn't have to pay taxes, but does NOT allow donors to write off donations as a charitable expense.
 
Sep 29, 2014
2,421
113
It does make it harder to get donations from larger businesses looking for the tax write off, how many large corporate sponsors have you had in the past?

Any kind of normal car washes , bake sales etc are not really effected.
 
Jun 1, 2015
500
43
I'll jump in because this is an area my team has had issues with in the past 3 years of existence. My team (just one team, rec-league type) has no 501(c)(3). I was advised by my tax lady NOT to get one because of our size and that it would not be beneficial based on our purchases not being major enough to warrant the tax exemption. That being said we've had issues getting donations from businesses because of the fact they can't write us off as charitable. However, we've been successful in promoting donations as ADVERTISING DONATIONS, and we've reciprocated with banners, plaques, Facebook ads, etc.

This year, we plan 3 additional fundraisers - a car wash/bake sale (or BBQ depending on the weather), a youth kickball tournament, and a t-shirt fundraiser. My girls are excited to get to go door-to-door for the business donations because we've learned (through word of mouth) that more businesses will donate to the girls (in uniform, talking up the team) vs. me doing mailings. We don't approach any big businesses (like Subway, Dick's, etc) because our battles are better fought on the small scale where our probabilities of profits are greater.
 

JAD

Feb 20, 2012
8,231
38
Georgia
Our HS booster club is a 501c3, but my DD has never been on a TB team that had tax exempt status. It is not that big a deal...
 

moe

Aug 14, 2013
310
16
Large organizations, like Applebees, Chipotle, etc. that you partner with will require the tax exempt letter. We are doing a hockey ticket sale, and 50/50 with the local AAA team and to get the slot we had to provide the letter. Chipotle and Applebee's does also for their league partnerships.
 
Aug 6, 2013
392
63
We have also gotten business sponsors by emphasising the fact that they can write the donation off as a advertising expense since we put their logo on our banner which we display at every league game and every tournament game. We also feature their business on our team Facebook page. We make sure the business gets screenshots and pictures to keep in their files in case they are ever audited. There are larger companies that won't donate but you can often work around this.
 
Nov 2, 2015
192
16

You could be correct, there! It looks like there are some distinctions that need to made, however:

"If an organization, composed of local amateur athletes who primarily play other local teams, occasionally schedules games with teams or organizations in another state, the organization will not qualify for exemption unless it demonstrates that those games are part of some national competition. Similarly, even if it provides a regional tournament, the organization will fail the requirements of IRC 501(j) unless it shows some link to national or international competition. The organization’s membership in a national sports association could provide that link. An organization’s assertion that it is a training ground for collegiate, professional, and/or Olympic players, absent some evidence of a reasonable probability that the members will participate in national or international competition, would not suffice to cause the organization to meet the requirements for exemption. However, prior participation in national or international competitions would constitute some evidence for favorable consideration if the organization could also show a likelihood that it was in a position to continue to participate."

"Teaching a particular sport to children—An organization teaching a particular sport to children by holding clinics conducted by qualified instructors in schools, playgrounds, and parks; by encouraging student participation in tournaments; by arranging for attendance by players and instructors at state tournaments; and by providing free instruction, equipment, and facilities is exempt from federal income taxation under IRC 501(c)(3) as educational. Rev. Rul. 65–2, 1965–1 C.B. 227; amplified by Rev. Rul. 77–365, 1977–2 C.B. 192."

So, just like everything else with the IRS, maybe it can be, maybe it can't!:confused:
 

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