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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118256
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Need to know if it is legal in Indiana board of a

Customer Question

Need to know if it is legal in Indiana for the board of a non profit group to decide to start taking 10% fees to go the general band fund from the money paid by other companies to parents for work they do to cover their student accounts. Many parents work events in town & out of town for companies that agree in contract to pay so much per hour or a commission of sales that comes in while the parent is working. The company sends a check to the non profit with the names of parents accounts the money is suppose to go in. Basically parents are working with outside companies approved by the non profit to help pay their student fees in the organization. I would think there would be some type of labor law prove ting them from taking a part of our wages to add to the general fund when the contract is written that the money is to go into the students account. Also shouldn't the voting members of the group be given a vote weather they want to give up a % of funds. Also we work with several companies in the work for fees program wouldn't we gave to change our co tract and let them know they r making a direct donation to the organization & not 100% goes to the student accounts. Would we need to vote each time a date comes up to work or different places since some pay by hour, just give a rate or pay commission and we do t know how much we get until after we work? I would think this has to violate some labor laws in Indiana. I need to know about Indiana or if it's a state to state law or just a federal law covering all non profits.
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Actually, a non-profit may take a percentage of donations received for administrative operation costs. So, even where a company donates money in the name of a particular child, the non-profit can deduct a "reasonable" amount for any administrative costs or expenses they incur in operating the organization or in processing the donations. The money MUST go to the organization, no member can actually personally benefit from the non-profit (aside from any normal salaries to employees if they have any).
This would not violate the federal non-profit laws, which would be what govern this type of situation. Parents are essentially volunteers and the organization receives payment as a donation for the time the parents volunteer (or commission on what they sell as a donation to the organization). I understand that money is supposed to go to the student accounts, but there are costs associated with running all non-profits and the organization can deduct a reasonable amount to cover those costs.
No vote is needed to get people to volunteer or set rates they will get unless the organization bylaws say there will be. When people volunteer to help a non-profit entity like this, the entity gets what the donor gives and the members volunteering do not generally have any say in that.
Customer: replied 1 year ago.
I just want to make sure you understood what I'm asking. My question is that the parents of the non profit are no volunteering for the nonprofit but working for an outside company. I for profit company. Like a football stadium. We work for the stadium, have to follow all employment laws. Are not covered by school insurance but by he company we are working for. Could be injured etc. the company has agreed to pay each individual a set hourly rate. Instead of paying us personally the send the check to our nonprofit with the amount and account it us to be credited to. To me it seems like the nonprofit is docking my pay a % when I worked for an outside company. I understand fundraisers we have within the organization go to the organization. If I'm working for the Indianapolis convention center. Have to drive myself, pay to park & wear the uniform the convention centers requires, do as the ask me to do for the set hours they request, how can the non profit take a % of my wage even if it's going to my sons account. I'm not volunteering for the non profit. I'm working for a company who instead of paying me pays directly to my sons account. It's like garnishing my wages. I did the work for an outside company who has a contract with our non profit to have all the. Only go to student accounts? Thank you
Expert:  Law Educator, Esq. replied 1 year ago.
I understood that, it is something we deal with all the time with our own non-profits we represent.
It is a common fundraising set up, we have people working selling programs in stadiums at sporting events, at music events, working booths at music festivals and even at casinos. This is permissible fundraising and it is volunteering to raise funds for your organization.
You do not have to keep volunteering to do this so the non-profit gets their donation, you have a choice. But there are administrative operating fees as I said above and legally they are not doing anything illegal. If you as a member of the non-profit do not like what they are doing, stop volunteering and submit a bylaw change to try to change the bylaws of the organization to say they cannot do this any longer.