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That makes sence. Maybe you may be able to answer a follow up question. IN order to sell scrip you have to have an EIN number and a bank account with the organizations name on it. There are several sports programs that sell scrip in order to pay for uniforms and team costs. How would they file under IRS for an EIN as a none profit organization if their profits benefit there own team? Basically what I am trying to do open a bank account under my organziations name so I can sell scrip which is discounted gift cards and you sell them to family members at the face value. All of my profit would go right to my kids private school. If you can shed any light on that I would really appriciate it. Thank you for your help
The organizations are usually sports "booster" clubs and they are chartered non-profits affiliated with the school's athletic departments.
You would want the organization to be affiliated with the school, like a PTA/PTO. The group could then file for non-profit status as a 501(c)(3) organization. I have provided a link to the CA PTA web page. Information on this page may be able to assist you.
I have also included a link to the IRS web page for information relating to the application for non-profit status.
The easiest way would be for you and the other parents to work within another organization already serving similar needs for your children. That way you wouldn't need to set up a new entity.