USA 501c3 Membership Dues- Restricted Funds?


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I have a question which has come up recently. I act as the Treasurer for a 501c3 non-profit in the US (Based in California). We have a membership dues structure in place which is primarily used to pay for member benefits. Up until recently, we had a statement on our website under an FAQ question "What does my membership pay for?". The posted answer previously stated (paraphrased): "Your membership dues pay for the cost of the news letter and management of membership. Conservation, Education, and Research programs are supported by your donations"

The implication here was that membership dues are not used for these other programs; however, over the years we have developed a fairly large surplus of unused membership dues and would like to apply some of those funds to these other programs. In having this statement on our website- have we obligated ourselves to only using these funds for these purposes or can we safely repurpose these funds?

My understanding has been that Membership dues are a fee charged for services rendered and hence not a restricted fund (once earned). As such we are free to repurpose the surplus.
 
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kirby

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Well, the website statement does NOT say "Your membership dues are ONLY used to pay" (etc).....
 
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No, that was never explicitly said- the wording definitely suggested it (and did so purposefully). At the time- that was in fact the practice but the Board has decided to change this practice.
 
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For the record, this was the original wording:

"Membership pays for your issues of [... the] Newsletter and the expenses of managing membership. As such membership is not considered a donation. Our education, research, and conservation programs are supported by your donations. "

and in another FAQ

"The money you pay for membership is NOT tax deductible in the USA because the amount you pay in membership is equal to the cost of the exclusive benefits you receive as a member. "

The second one obviously turned out to be false because we now have a surplus of funds.

Both of these have since been modified to remove any kind of suggestion regarding funds being used exclusively for membership benefits and now allow for "Other expenses in support of the organization's mission"
 

kirby

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Your website said the membership is not tax deductible so you are good as far as IRS goes.
As for re-purposing the dues - consider that originally the newsletter was probably printed and mailed. It's possible that these days you'd move away to cheaper email. So what would become of the dues originally intended for printing and mailing costs? Return the dues? No, So its OK to use dues for "expenses of managing membership".
The KEY thing is to NOT use the dues for something that's going to "raise eyebrows". Like paying for someone's kid to take a trip or paying for a seminar in Paris for a few buddy-buddy members. Just kidding but you get the point.
 
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No nothing like that, due have always been used for the expenses associated with managing members. The projects would be supporting our Conservations, Education and Research funds (e.g. paying to fund our conference, funding scholarships or scientific research, grant making related to these goals). These are a core part of our activities but previously had been funded out of explicitly earmarked donations. We have decided to do away with that system.
 
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