501(3)(c) to donators for trophy party
Manager on a little league team asks for donations from businesses to raise money for trophy party. We sell tickets for drawing and give away all donated prizes. Donations are products from the from their company - tickets, passes, etc. to their establishments. Monies collected from drawing pay for all kids trophies, parent participation awards, and all the food, and left over monies is then donated back to the little league either by purchasing, i.e., barbeque or bat holders for the dugout.
Some donators ask for a 501(3)(c). We do not keep track of donated items.
This year I am a board member to the little league.
Will this effect/jeopardize the little leagues taxes or 501(3)(c) status?
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The good news is that your parent organization is tax exempt and your local organization might be.
The national organization even has guidelines and even more details.
Regarding donations they have this to say:
Please note: The law requires charities to furnish disclosure
statements to donors for such quid pro quo donations in excess of
.00.
A quid pro quo contribution is a payment made partly as a
contribution and partly for goods or services provided to the donor by
the charity. An example of a quid pro quo contribution is when the
donor gives a charity 0.00 in consideration for a concert ticket
valued at .00. In this example, .00 would be deductible because
the donor’s payment (quid pro quo contribution) exceeds .00. The
disclosure statement must be furnished even though the deductible
amount does not exceed .00.
Regarding taxes:
Leagues included under our group exemption number are responsible for
their own tax filings with the I.R.S. Leagues must file Form 990 EZ
with Schedule A if gross receipts are in excess of ,000 but less
than 0,000.
Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports.
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