Corporate Law 501(c)(7) Social Club Cash Flow Help

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spi21

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My jurisdiction is: Texas

I am on the board of directors of a local social club that incorporated in the early 2000's. Our club is wanting to make some changes which have spurred many legal questions.

For now, the two we need immediate assistance with are as follows:

The easy and more simplistic one is about payments/reimbursements to board volunteers. One scenario at hand is an event that the club sponsored required a speaker to be flown in. Part of payment to this speaker included transportation and meal costs. The question comes about because a board member volunteered to pick up and take the speaker to dinner one of the nights he was in town. The volunteer expected their gas and meal costs to be reimbursed. Is this acceptable for our organization to do? We want to put together a strict policy outlining this but want to make sure we can legally pay out money for this reason.

The second and more complicated one is about sponsors and advertising on our club website. We currently allow sponsors to have a forum area and banners displayed on our site by paying us $200 in cash or donating $300 in goods or services. We want to expand this to include different levels that would include buying more banner rotations, seperate pages on our website, and many other extra features available for more money. This money would be used to directly offset the costs of events put on for members (some events for non-members too) that would normally cost the club or the event attendees. If the club is not able to make up some of the money via this method then dues or admission fees would probably be raised. Is our current method ok and would the direction we want to move be ok? The legallity with the whole 15% or 35% thing is more confusing to us than anything else and we just want to make sure before moving on.

Thank you very much for any assistance you can provide.
 
1. With regard to the reimbursement, it seems clear to me that transportation was required - how much would gas and tolls be? The board member wants a few dollars for this? How far away is the airport?! With regard to dinner, that's not as easy to answer. Most will provide for reasonable dining up to a certain amount. Going to the Four Seasons is not something one might expect. With regard to the board member's wanting to be reimbursed for dinner, while I understand the reason, I'd wonder where they went and whether other members would have "volunteered" if they knew they'd get a free meal at a nice place and ability to pal around with the distinguished speaker. I'd say the board member's costs was entirely his/her own due to choice. That much is clear. The question is how much the board member seeks (and I'd find it absurd and embarrassing if this was a small or large amount.)

2. This isn't as simple and nobody can give you an easy answer without knowing all the details. There are state and federal laws that may apply, especially given your election. To be sure, which "thing" are you referring to. Some of these have to be commensurate with market value, etc.
 
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