501c7 and giving away money to non members

[Connie125]

As part of a 501c7 club, we want to give away money to a non-member who lost his house. There is no charity involved so it would just be cash donation to the individual. Is this legal? Also, can the club host events that are totally paid for by the membership dues and not charge members an additional fee to participate...for example, a picnic or a Christmas banquet? Thank you!

 

[Betty3]

Do you have bylaws? If you don't get a reply here, you might talk to an attorney - possibly a tax attorney.

 

[disagreeable]

We do not have enough info on the numbers involved to hazard a guess. Why does the club want to gift to this person if they are not a member? What are the clubs collections? How much do they want to gift? Do the bylaws allow the activity?

.76.16.6.2 (04-01-2003)
Nontraditional Business Activities

Activities that are not in furtherance of a social club's exempt purpose are referred to as nontraditional business activities.

A social club is prohibited from conducting more than an insubstantial amount of nontraditional business activities.

The prohibition against the conduct of nontraditional business activities applies equally to business with members and nonmembers.