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    OYSA Clubs Nonprofit Status

    Here is OYSA's take on non-profit/for-profits. Separately, there are requirements for any new youth club (non-profits included) that they have serve a new market.

    None of these are really new requirements, but one benefit of a "unified" state is that with all of the major clubs in OYSA, the "new market" requirements have more meaning.

    ________________________________
    Oregon Youth Soccer Association Clubs;

    I want to bring to your attention a concern of a for-profit business operating under you, our nonprofit 501(C)(3) clubs.

    https://www.irs.gov/charities-non-pr...-organizations

    “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.”
    A nonprofit club can may pay reasonable fees for a service to a company or individual that provides a service to a club. Clubs can pay wages, but not any other form of monies - that means quarterly estimated withholding, FICA etc - and that the member club 100% takes over the teams, coaches etc. The teams coming in have to accept that the board of the club can change their mind about what happens to a team, including formation etc- they are now part of "our" club and not a separate entity. This is also the case that there cannot be a contract between the two entities for anything other than services etc. Governance in all it's forms must stay within the hosting club.

    You, our clubs, could put your nonprofit status in jeopardy. You should consult with your accountant and tax lawyer about third party for-profit business operating under you. To protect our nonprofit status, Oregon Youth Soccer Association will suspend any club that has a profit entity operating under them until a review with OYSA is completed, to confirm that your and our nonprofit status is not in jeopardy.

    If you have any question please feel free to contact Steve Baker, OYSA President at stevebaker@oregonyouthsoccer.org or myself.

    #2
    Originally posted by Unregistered View Post
    Here is OYSA's take on non-profit/for-profits. Separately, there are requirements for any new youth club (non-profits included) that they have serve a new market.

    None of these are really new requirements, but one benefit of a "unified" state is that with all of the major clubs in OYSA, the "new market" requirements have more meaning.

    ________________________________
    Oregon Youth Soccer Association Clubs;

    I want to bring to your attention a concern of a for-profit business operating under you, our nonprofit 501(C)(3) clubs.

    https://www.irs.gov/charities-non-pr...-organizations

    “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.”
    A nonprofit club can may pay reasonable fees for a service to a company or individual that provides a service to a club. Clubs can pay wages, but not any other form of monies - that means quarterly estimated withholding, FICA etc - and that the member club 100% takes over the teams, coaches etc. The teams coming in have to accept that the board of the club can change their mind about what happens to a team, including formation etc- they are now part of "our" club and not a separate entity. This is also the case that there cannot be a contract between the two entities for anything other than services etc. Governance in all it's forms must stay within the hosting club.

    You, our clubs, could put your nonprofit status in jeopardy. You should consult with your accountant and tax lawyer about third party for-profit business operating under you. To protect our nonprofit status, Oregon Youth Soccer Association will suspend any club that has a profit entity operating under them until a review with OYSA is completed, to confirm that your and our nonprofit status is not in jeopardy.

    If you have any question please feel free to contact Steve Baker, OYSA President at stevebaker@oregonyouthsoccer.org or myself.


    Yep we all got this email ?

    Comment


      #3
      Originally posted by Unregistered View Post
      Here is OYSA's take on non-profit/for-profits. Separately, there are requirements for any new youth club (non-profits included) that they have serve a new market.

      None of these are really new requirements, but one benefit of a "unified" state is that with all of the major clubs in OYSA, the "new market" requirements have more meaning.

      ________________________________
      Oregon Youth Soccer Association Clubs;

      I want to bring to your attention a concern of a for-profit business operating under you, our nonprofit 501(C)(3) clubs.

      https://www.irs.gov/charities-non-pr...-organizations

      “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.”
      A nonprofit club can may pay reasonable fees for a service to a company or individual that provides a service to a club. Clubs can pay wages, but not any other form of monies - that means quarterly estimated withholding, FICA etc - and that the member club 100% takes over the teams, coaches etc. The teams coming in have to accept that the board of the club can change their mind about what happens to a team, including formation etc- they are now part of "our" club and not a separate entity. This is also the case that there cannot be a contract between the two entities for anything other than services etc. Governance in all it's forms must stay within the hosting club.

      You, our clubs, could put your nonprofit status in jeopardy. You should consult with your accountant and tax lawyer about third party for-profit business operating under you. To protect our nonprofit status, Oregon Youth Soccer Association will suspend any club that has a profit entity operating under them until a review with OYSA is completed, to confirm that your and our nonprofit status is not in jeopardy.

      If you have any question please feel free to contact Steve Baker, OYSA President at stevebaker@oregonyouthsoccer.org or myself.


      'Non-profits are permitted to engage for-profit companies to provide services. Those services can include coaching, training, and event logistics services. The fees the non-profit club charges to its members can be used to pay invoices, but the owners of the non-profit are not permitted to keep the profits after expenses, those profits can only be used for additional youth soccer related programs. But a for-profit soccer club can provide any range of services to any non-profit it wishes. Doing so does not jeopardize your non-profit partner’s status.'


      Big clubs being protected here which is OYSA's prerogative of course (I agree with this stance to a point). Need to be more careful with the wording however. Some grey area's in the statement for sure.

      Comment


        #4
        Originally posted by Unregistered View Post
        Here is OYSA's take on non-profit/for-profits. Separately, there are requirements for any new youth club (non-profits included) that they have serve a new market.

        None of these are really new requirements, but one benefit of a "unified" state is that with all of the major clubs in OYSA, the "new market" requirements have more meaning.

        ________________________________
        Oregon Youth Soccer Association Clubs;

        I want to bring to your attention a concern of a for-profit business operating under you, our nonprofit 501(C)(3) clubs.

        https://www.irs.gov/charities-non-pr...-organizations

        “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.”
        A nonprofit club can may pay reasonable fees for a service to a company or individual that provides a service to a club. Clubs can pay wages, but not any other form of monies - that means quarterly estimated withholding, FICA etc - and that the member club 100% takes over the teams, coaches etc. The teams coming in have to accept that the board of the club can change their mind about what happens to a team, including formation etc- they are now part of "our" club and not a separate entity. This is also the case that there cannot be a contract between the two entities for anything other than services etc. Governance in all it's forms must stay within the hosting club.

        You, our clubs, could put your nonprofit status in jeopardy. You should consult with your accountant and tax lawyer about third party for-profit business operating under you. To protect our nonprofit status, Oregon Youth Soccer Association will suspend any club that has a profit entity operating under them until a review with OYSA is completed, to confirm that your and our nonprofit status is not in jeopardy.

        If you have any question please feel free to contact Steve Baker, OYSA President at stevebaker@oregonyouthsoccer.org or myself.

        Ye gods. Did someone really write that argle-bargle without running it through Grammarly or having it proofread? (Or was it transcribed poorly)? It's one thing for text messages or even blog posts to contain such piss-poor English, but a formal letter? My English teacher would have a conniption were she to read this.

        The gist appears to be: while nonprofits may hire for-profit companies for services (personal training, etc.) all governance must lie in the hands of the nonprofit. And even though this didn't say as much, I would assume that any such agreements must be at arms-length; the same guy can't be president of the non-profit club and director of the personal training business hired by the club, which all players in the club are expected to patronize (or to which the bulk of the club fees go, instead of paying for coaches hired directly by the club).

        Comment


          #5
          The way I read it means we will not be seeing those purple kits in our leagues.

          A source that I spoke with said that whatever club tries to take in this group will have their financials gone through to see how monies are allocated. I just don’t think there a club dumb enough to take on this group. These guys just need to find a way to square up their work visas and get coaching jobs

          Comment


            #6
            Originally posted by Unregistered View Post
            The way I read it means we will not be seeing those purple kits in our leagues.

            A source that I spoke with said that whatever club tries to take in this group will have their financials gone through to see how monies are allocated. I just don’t think there a club dumb enough to take on this group. These guys just need to find a way to square up their work visas and get coaching jobs

            'Non-profits are permitted to engage for-profit companies to provide services. Those services can include coaching, training, and event logistics services. The fees the non-profit club charges to its members can be used to pay invoices, but the owners of the non-profit are not permitted to keep the profits after expenses, those profits can only be used for additional youth soccer related programs. But a for-profit soccer club can provide any range of services to any non-profit it wishes. Doing so does not jeopardize your non-profit partner’s status.'

            Comment


              #7
              Originally posted by Unregistered View Post
              Ye gods. Did someone really write that argle-bargle without running it through Grammarly or having it proofread? (Or was it transcribed poorly)? It's one thing for text messages or even blog posts to contain such piss-poor English, but a formal letter? My English teacher would have a conniption were she to read this.

              The gist appears to be: while nonprofits may hire for-profit companies for services (personal training, etc.) all governance must lie in the hands of the nonprofit. And even though this didn't say as much, I would assume that any such agreements must be at arms-length; the same guy can't be president of the non-profit club and director of the personal training business hired by the club, which all players in the club are expected to patronize (or to which the bulk of the club fees go, instead of paying for coaches hired directly by the club).


              Agreed. Poorly constructed email.

              Comment


                #8
                Originally posted by Unregistered View Post
                'Non-profits are permitted to engage for-profit companies to provide services. Those services can include coaching, training, and event logistics services. The fees the non-profit club charges to its members can be used to pay invoices, but the owners of the non-profit are not permitted to keep the profits after expenses, those profits can only be used for additional youth soccer related programs. But a for-profit soccer club can provide any range of services to any non-profit it wishes. Doing so does not jeopardize your non-profit partner’s status.'
                Did anyone with knowledge of tax law review these emails before they were sent out? Tax attorneys are expensive but can be valuable.

                Comment


                  #9
                  So the difference between the big clubs and some of these start ups. In the big clubs they have board of directors (or some other name of a group) who are not paid, and are elected/volunteers. Anyone who is hired by the club (GM's, DOC's,ect) have to be approved by the board. So in most the bigger clubs the board hires a Technical director or DOC and gives them the power to higher coaches, but they answer to the board who makes the decisions for the club.

                  In these start ups there is no Board of directors, instead its coaches who want to open up a club, who will profit off this club, and they run the club, thus making it a for profit.

                  Comment


                    #10
                    Originally posted by Unregistered View Post
                    Did anyone with knowledge of tax law review these emails before they were sent out? Tax attorneys are expensive but can be valuable.

                    It would appear not.

                    Comment


                      #11
                      Originally posted by Unregistered View Post
                      It would appear not.
                      There are a large number of statements that don’t appear to make sense.

                      Comment


                        #12
                        OYSA might want to get some professionals to help them.

                        Comment


                          #13
                          Originally posted by Unregistered View Post
                          There are a large number of statements that don’t appear to make sense.
                          The OYSA would have been better off not sending this statement out as it is their league and they can have final say of who enters and who doesn't. Now it appears they are incompetent and worse still not legally accurate with the statement.

                          Comment


                            #14
                            Seems pretty straight forward. If SCA is attaching itself to another club to play OYSA, then the board for that new club needs to be able to make decisions for the SCA portion. If it can't, then the SCA portion is a for profit and does not fit the requirements to play in OYSA.

                            Comment


                              #15
                              Curious how OYSA and IRS view DOCs that create a “consulting firm” to hire for “consulting services” to run their own club. Double dipping?

                              Comment

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