What happens if a non-profit organization makes a profit?

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What happens if a non-profit organization makes a profit?

I pay for my daughter to play soccer for a not-for-profit organization. The money left in our teams’ accounts at the end of the season, is kept by the organization; nothing is refunded. It does take out a fee but this money that is left is after all fees are paid. Is it legal for the club to keep the money from each age group that is not spent?

Asked on July 5, 2015 under Business Law, Pennsylvania

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

"Not for Profit" does NOT mean that the organization can not make a profit.  In fact, it is intended to make money for the benefit if the organization in pursuing its objectives.  It is not intended to make profit for the owners. There is a big difference.  So long as the left over funds stay there and are used for the benefit of the soccer team - tournament fees, uniforms, equipment - there can be a surplus at the end of the year.  Good luck.


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