Would a vendor fair or yearbook ads where we ask businesses for sponsoring money be considered raising money from the public?
Would fundraising with our members only be considered public?
Thank you,
Tonya W in FL
Tonya,
Note: Tonya is asking these questions because her state, Florida, asks several questions about fundraising or soliciting money from the public. Most states regulate nonprofit organizations that fund raise from the public. Many states allow groups to fund raise within their membership without any reporting to the state.
Fundraising from only within your membership is not public fund raising.
A vendor fair is not really “raising money.” It is a program related to your purpose (education). So all income from it would be considered “program income” not fund raising income to the IRS and FL.
The ads in the yearbook are not related to your purpose (education), so it is considered Unrelated Income to the IRS. Unrelated Income is taxable, but the IRS has several exceptions to being taxed.
Read about it here: https://homeschoolcpa.com/what-is-unrelated-business-income-tax/
The states care about you asking for donations from the public, not really about income from running your program, holding a vendor fair, or selling yearbook ads.
Hope that helps!
Carol Topp, CPA
