It comes from the fact that benefits from a tax exempt organization are not supposed to inure to individuals. This is a very tricky area; the issue seems to come up most often with high school booster clubs. If you have an older girl in Girl Scouts, it's like their "paper account" system. There's a good paper on the various pitfalls here: http://www.parentbooster.org/resources/Documents/Cooperative%20Fundraising%20Activities%20white%20paper.pdf
- mum24kids
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Your parent is right. There are cases where 501c(3) status has been challenged due to this practice. Here is a unique alternative that solves a lot of fundraiser issues.
Parents are burned out with selling, collecting money and distributing products. AdMobile created a unique idea where parents trade off doing all that for receiving a few text ads per day. It doesn't cost the fundraiser or parents any money. The money is made when ads are sold to businesses who like the idea of sending their coupons, promotions, etc. to the parents' mobile phones via text. Fundraisers don't even really sell the ad. They just refer the advertiser to AdMobile who manages the advertisers, collects the ad revenue and pays the fundraisers. All the fundraiser has to do is have their supporters subscribe via text and show an app about the advertising to advertisers.
- admobile
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