zddoodah
Well-Known Member
Questions primarily for @Tax Counsel
Let's say a public high school dance troupe decides to take an international trip. The cost of the trip is $2,500 per student or family member who also goes on the trip. The booster organization for the dance troupe (which is a 501(c)(3) corporation) solicits donations for the trip (in addition to solicitation of general donations for the program). Let's say that the boosters do enough fundraising (including a $10,000 donation from Suzie Tutu's aunt, which donation is made specifically for the purpose of the trip) to reduce the trip cost to $1,500 per person.
Suzie's parents pay the boosters $1,500 in cash for Suzie to go on the trip (this is a 100% pass through of actual trip costs -- i.e., every dollar paid by Suzie's parents will be spent by the boosters for the cost of Suzie going on the trip).
The trip is then cancelled (and let's assume that neither the boosters nor the school incurred any trip related expenses or that any such expenses were refunded in full).
Questions:
1. Are the boosters legally prohibited from refunding the $10k donation made by Suzie's aunt?
2. If Suzie's aunt wants her donation refunded and the boosters don't want to do so (and want to "convert" it to a general donation), are the boosters legally obligated to give the refund?
3. Is there any legal prohibition (stemming from the boosters' status as a 501(c)(3) entity or otherwise) against the boosters refunding the $1,500 that Suzie's parents paid for her to go on the cancelled trip.
My assumption -- based on what I've seen from a quick google search is that the answers to questions 1 and 3 are no, but I'd appreciate some expert input. I didn't find anything about question 2, but I assume the answer is yes.
Thanks!
Let's say a public high school dance troupe decides to take an international trip. The cost of the trip is $2,500 per student or family member who also goes on the trip. The booster organization for the dance troupe (which is a 501(c)(3) corporation) solicits donations for the trip (in addition to solicitation of general donations for the program). Let's say that the boosters do enough fundraising (including a $10,000 donation from Suzie Tutu's aunt, which donation is made specifically for the purpose of the trip) to reduce the trip cost to $1,500 per person.
Suzie's parents pay the boosters $1,500 in cash for Suzie to go on the trip (this is a 100% pass through of actual trip costs -- i.e., every dollar paid by Suzie's parents will be spent by the boosters for the cost of Suzie going on the trip).
The trip is then cancelled (and let's assume that neither the boosters nor the school incurred any trip related expenses or that any such expenses were refunded in full).
Questions:
1. Are the boosters legally prohibited from refunding the $10k donation made by Suzie's aunt?
2. If Suzie's aunt wants her donation refunded and the boosters don't want to do so (and want to "convert" it to a general donation), are the boosters legally obligated to give the refund?
3. Is there any legal prohibition (stemming from the boosters' status as a 501(c)(3) entity or otherwise) against the boosters refunding the $1,500 that Suzie's parents paid for her to go on the cancelled trip.
My assumption -- based on what I've seen from a quick google search is that the answers to questions 1 and 3 are no, but I'd appreciate some expert input. I didn't find anything about question 2, but I assume the answer is yes.
Thanks!