For several years my wife has operated a group here in Lubbock Texas. The purpose of the group is to raise funds for our homeschool athletic teams to pay for various aspects of their sporting endeavors.
The group receives a percentage of sales from concession stands operated at Texas Tech University and are paid by Ovations, the current concessions operator for Texas Tech. Ovations uses non-profit groups to operate all concession stands.
We have never sought non-profit status and now Ovations is insisting that we do so or they will no longer use us.
We has always paid each individual working in the stand based on how much time they worked, and given out 1099MISC to those making over the minimum $600. Those working come from homeschool athletic teams though we do not dictate how the money each receives is spent.
In reading the IRS website I can see that sports organizations are eligible for non-profit status, but is the way we pay those working acceptable?
Your organization sounds like a parent booster club in that you raise funds to support athletic teams. Yes, booster clubs and athletic teams can be 501c3 tax exempt organizations.
The issue of paying parents working a concession stand has come up with the IRS in the past.
Here is a blog post I have written on the topic.
I think the IRS would approve of the way you are paying the parents. Giving them a 1099MISC is the correct way to report their earnings.
You might also find this website ParentBooster.org helpful.
ParentBooster.org offers tax exempt status to athletic booster clubs that support the activities of a school under their group tax exempt status. I asked the founder, Sandy Englund, if homeschool booster clubs would be eligible for 501c3 tax exempt status under ParentBooster.org, but she said no. Maybe you should ask and see if you get a different answer. It would be a very easy way to obtain your 501c3 tax exempt status.