The short answer to this question is yes, but it is assuredly a qualified yes. This operational policy does not exist for some businesses because of the classification of contributions and revenue actions. Non-profit organizations can choose to consider payments from specific individuals as either dues or donations, but companies that are focused on marginal cash flow will have a difficult time using this policy effectively in terms of accounting. An example would be an exercise gym that sells “memberships” for a set price over a designated time period. This fee is clearly a profit-driven revenue action required for access to the gym equipment. Nonprofit businesses have more latitude, as any typical 501(c)3 company can operate as an organization that takes donations and allows contributors access to any benefits of the organization. The question becomes which type is best suited for the club in terms of protecting cash inflows.

Members Versus Donors

The general rule regarding a contribution versus a dues payment is whether the paying individual received anything of intrinsic value as a result of the financial transfer.

If a membership includes access to certain facilities that are restricted to non-contributors, then there could be some benefits of membership. Examples of those benefits could also include being allowed to vote on certain initiatives of the club. This usually means that the club would inherently respond to any allowed collective input as well.

This is a very different relationship than merely recognizing an individual as a donor. Being a donor normally indicates the financial transaction was conducted voluntarily by the contributing party with zero consideration given in return. Such a business relationship allows the receiving organization to act freely in using the funds as they see fit. This is also an example of a pure gift, or charitable contribution.

So the bottom line is that members will typically have certain assumed privileges within the organization, such as regular admission to a clubhouse – whereas donors are normally powerless without achieving a specific level of contribution to become a full beneficial member.

Set the Parameters First

The ability to use membership contribution is legally determined by the tax records. Not only will payments be classified as contributions, but each member contributor must be supplied a tax statement at the end of the each year. Proper detailed ledger maintenance is very important, especially for organizations with significant assets and a high volume of member contributors. Using the donation access model can clearly put the funds in a non-taxable category. Depending on the type of organization, donations can also be used in facility operation budgets as well as long as the organization or club does not show a profit at the end of the tax year. This can be especially solidified for tax purposes when there is an established program for donation redistribution to certain charities or organizational drives. Once the rules for membership are determined they will be in effect for an entire accounting year, so always prepare for the long-term use of the associated model.

Contribution Model

There are several rules that organizations must follow when accepting donations from associate members. While primary donations will normally be a set fee within a certain time period, which is usually one year, allocations can also be made for pledges to specific events and recurring gifts. Non-profit organizations can also offer different classes of membership based on donation amounts and level of involvement within the mission of the organization. It is vital that all guidelines for membership and donation classification be stipulated before the process begins to ensure effective application throughout the first year. Necessary adjustments in policy can then be made at the end of the year.

Dues Model Membership

While there are usually some benefits of being an organization member, “dues” are still considered as donations by the Internal Revenue Service. The IRS is ultimately the primary concern when determining which operational model to choose. There are some definite advantages to having a membership program, even if it does change the nature of the relationship between the club and its primary regular associates. The dues become an immediate and dependable source of revenue each year when fees come payable, which gives the management staff an idea of how much cash flow can be generated based on the size of the membership or associate list. Dues that accrue in January will not be evaluated for tax purposes until an entire year later, which gives the club benefit of the resources throughout the remainder of the year.

Evaluating the Legalities of Your Organizational Structure

There are some legal issues that may also be associated with making a change in dues or donation club policy. Local chapters of national associations may not be able to make this change if the national book of rules for operation prohibits the shift. Major national organizations actually make most of their income on per capita tax from the local chapters based on the membership rosters. Organization associations are governed from the top down just like for-profit businesses, and all primary central chapters make the rules. This can include allowances for membership voting on certain club business decisions as well as the defined benefits of membership. And the most important overall aspect of operating for all beneficiaries – whether they be members, donors or just associates – is ensuring the business licenses are properly listed as 501(c)3 companies for all tax and employment purposes, including payroll. Members and associates are allowed to donate their time as well as money, but time is not generally allocated as a requirement. Time donations are mere contributions with no apparent consideration and no financial evaluation in most instances.

Special Licensing

Clubs or organizations that sell alcoholic beverages or host wagering transactions will normally need a gaming license as well as alcoholic beverage license, which is issued by local government. While this does not necessarily seem to concern membership or donor status for associates, many small communities implement local ordinances that stipulate that the only individuals who can be served must be members unless the club has scheduled an event that is open to the public. Maintaining a license to operate in full functionality can still impact the type of associate structure any club or organization chooses when developing the best business model for the particular organizational mission.

This business transition is not one to be taken lightly, as the decision on associate type typically lasts a year after donations are made or dues are paid. The scope of direction and focus of the organization is important to the decision and conducting a comprehensive feasibility assessment is a good first step.

You either own or are a part of a nonprofit organization, and you are trying to come up with great ideas to raise money. Car washes, door-to-door donations, and bake sales can get old after a while. You are looking for something that is not only interesting and fun, but that you can involve your local community in as well. “How about a poker night?” someone suggests. Poker is a fun game, can involve lots of people, and can offer an incentive to donate. But before you start making flyers and buying playing cards by the case, there are some things you should consider.

Is It legal?

The first thing you should research is how your county or state regulates games of chance. Poker falls under this category and could be subject to several rules. Your nonprofit may have to apply for a gambling license in order to operate a poker night. Raffles and games like bingo might also be subject to other restrictions.

What About Taxes?

The issue of taxes is also something to consider. Some states consider money raised from games of chance as unrelated business income, and subject to taxation. Also, any winnings won by your players are subject to taxes. Some places require nonprofits to pay a Gaming Excise tax.

Can Employees of the Nonprofit Work the Event?

Running a game of chance as a nonprofit could also have consequences when it comes to employees of the nonprofit working the event. It could trigger background checks to be performed on the CEO or even the staff of your organization. Staff members might not even be allowed to work the event in some states.

Can Donors Deduct Donations Given or Money Won at the Gaming Event?

Your players may participate in a game of chance thinking that any money they win or donate will be tax deductible. But they would be wrong. Unfortunately, any money spent as an entry donation is actually considered a purchase for an experience or product, and winnings are subject to tax laws similar to lottery winnings.

So What Can a Nonprofit Do to Make Sure Their Poker Night Is Legal?

In order to avoid tax issues, employee issues, and potentially losing donors over misinformation, there is a process to follow. It is imperative that you follow these steps, as missing even one can result in legal action against your organization.

1. Review your state laws. Each state has its own set of rules pertaining to charity gambling events. There could be laws pertaining to age limits of players as well.

2. Get proper licensing for vendors and/or alcohol sales. In most states, it is required to have a liquor license to sell alcohol at any event, even if a nonprofit is holding the event. Certain cities, counties, or states may also require licenses to have food or merchandise vendors participate in the event.

3. Inform your donors about the restrictions. If you’re cleared to have the event and have acquired the proper licensing, make sure in the marketing information that you mention the donor’s tax rights and responsibilities if they win. Also state that any entry fees are not tax deductible.

4. After the event, file the proper paperwork. Some states might require detailed information about the donations collected and the amount won by the winning player. It may be required that your nonprofit keep a special record of the person who won your event. And in some states like Pennsylvania, a separate bank account must be opened wherein all proceeds from your event are deposited.

5. Find out if there are any limitations on how proceeds from your event can be used. In some states, like North Carolina, none of the proceeds can be used to pay employees who worked the event, or to pay any rental fees for the facility the game was played in.

What Are the Ramifications of Not Following the Rules?

If your organization fails to meet the legal requirements of your state, there could be dire consequences. Nonprofits that filed under the 501(c)(3) tax exempt status might not be able to run gaming events at all – as the government does not consider gaming as a charitable activity. If you were to conduct such an event it could put your nonprofit’s tax-exempt status in jeopardy.

Violations of the gambling laws could also lead to civil and criminal charges of noncompliance, and heavy fines could be levied against you. If the violations are particularly severe, the state could issue a cease and desist order to your organization which would prohibit your nonprofit from participating in any fundraising activities whatsoever. The only way this order can be relieved is if the nonprofit becomes compliant with the law, negotiates a settlement with the government, and pays any fines levied upon it.

These punishments can cost your nonprofit severely in terms of dollars and cents. But of even greater concern is that the public image of the organization could be irreparably damaged, resulting in the loss of donor support. For a nonprofit, this is practically a death sentence. Attempts to repair the image of a nonprofit might not be enough to salvage it, resulting the loss of jobs and a gap in any charitable services your organization provided.

Your nonprofit organization provides goods and services that improve the lives of people in your community. Having interesting and fun fundraising events is a must, but if you choose to hold a poker night – be sure to follow the law to the letter. If you falter, it could mean the loss of respect from your community, the loss of revenue to continue your charitable works, and the unemployment for your entire staff and board.

The government grants nonprofit organizations the special ability to act in ways other companies or businesses cannot – in exchange for improving their city, state, and country. It is a privilege that should not be squandered. Charity is necessary in this country, and without it many people would be sick, homeless, or dead. The unique services provided by nonprofits are incredibly valuable to our society. Don’t let one innocent event shatter that privilege.

For anyone that is going through a divorce, then you need to try and make sure that you find someone to represent your interests. This is because in divorce cases there can be a lot of tricky legal issues to navigate around. And if you hire a lawyer, it should be someone that specializes in family law. If you do not hire a lawyer and try to handle your divorce by yourself, then you would not be able to deal with your divorce conveniently. A family or divorce lawyer is going to give you a lot if you decide to hire them. Here are some things that a family or divorce lawyer can do for you.

1. Ensures that you can get better representation in court

The kind of representation that you get in the court is going to influence how it turns out. If you would like the divorce case to go in your favor, then you have got to make sure that you are getting the best legal representation possible.

2. Helps you understand child custody laws

For people who have got children, it could be a great idea to find a divorce attorney. They would help you understand the complexities of child custody law. So that you can get the best custody deal that works for you.

3. Quickens the divorce proceedings

A lot of the time, a divorce lawyer can help the proceedings speed up by quite a bit. If you do not want the divorce to drag on and on, then you need to find an attorney that you can hire. It would allow you to get divorced quickly, and you would be free much faster.

4. Watches out for your rights

Your rights as a parent or spouse could end up getting breached and violated if you are going through a divorce. You can prevent that from happening if you hire a divorce lawyer. They would ensure that nothing of your rights is going to get violated when you are going through your divorce.

5. Lets you receive your fair share

If you do not want to be cheated when you are splitting your assets between you and your spouse, then you need to hire an attorney. If you hired one, then you could ensure that you are not going to get cheated about anything in your divorce. They would look out for you and ensure that you will get your fair share when your assets are being split between you and your wife.

6. Talks to your spouse for you

If you do not want to talk to your spouse that is understandable. Some divorce cases can be very acrimonious. If you do not want to experience any contact with that other person, then you should just hire a divorce attorney. They could act as a go-between for you and your spouse. This would mean that you can minimize the contact that you have with the spouse that you are divorcing. And this can help you reduce the stress that you experience when you are going through a divorce.

So as you can see, when it comes to family law and divorce cases, you most definitely have got to hire a divorce attorney. This is because there could be a lot that you may gain if you hire a divorce attorney. And if you do not hire a divorce lawyer, then you will experience a lot of trouble when you are going through a divorce. You may need to look for someone who is an expert in family law. It is always better to hire an attorney that specializes in family law because they would have all the knowledge and experience that is needed in the specific cases.