I'm Treasurer of a Quilt Guild which qualifies as a 501(c)(7) Social Club, and have a couple of questions.Someone has suggested that the Guild sponsor a booth at one of the local fairs where members can choose to sell some of the things they have made, and donate some portion of the proceeds to the Guild. This seems allowable to me after reading Publication 557 since this would be income coming from the members and related to what we do. Does anyone see a problem with this that I'm not seeing?We just donated 104 quilts to the local veteran's shelter, and someone who saw the quilts has asked if the Guild will make her a quilt that she would buy. That seems like business income to me, and would violate our exempt status. It has been suggested, however, that one of the members could make the quilt, sell it to this person, and donate a portion of the earnings or even all of it to the Guild. That seems like it might work since it is income derived from the activity around which we organize, similar to above, but I'm still thinking that having someone commission the work makes it more of a gray area. Anyone have any thoughts on that?The publication only has just over a page around 501(c)(7) organizations, so I could use some advice on my questions above.
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