Greater Oklahoma City Pickleball ClubGreater Oklahoma City
       Pickleball club

GOPB Board Minutes


July 14, 2021

4:00-4:45 p.m.

Google Meet

Special Agenda Item: 501(c) (7) status

Gene Click, president, opened the Google meeting at 4:02 pm. Those present: Mary Williams, Kyle Jones, Kerry Guinn, Gene Click, Rocky Arrington, Jo Ann Flowers, Vicky Noakes and Nick Whitson.

The GOPB Board of Directors hired Jeri Holmes, an attorney who specializes in non-profit organizations, to discuss the advantages/disadvantages of the GOPB’s 501(c) (7) status and decide if the club needs to move to a 501(c)(3). Gene and Vicky met with Jeri on Monday, July 12, and shared the following information discussed during their meeting.

Jeri advised the GOPB club remain a 501(c)(7) status. She gave the example that the GOPB, as a 501(c)(7), operates as a “Country Club”-- all of the profits are to benefit our members.  The GOPB club is member-based. As a 501(c)(7) our club does not provide a public service or community benefit beyond serving our members. She stated there is no financial, legal, or community advantage to changing to the 501(c)(3) status. She also strongly encouraged the board of directors to hire a non-profit accountant--and recommended an accountant—if the club does not have an accountant who specializes in non-profits.

Gene and Vicky shared the following questions/answers and notes that were taken at the July 12th meeting with Jeri that explained the differences of the two non-profits and why it is important for the GOPB to remain a 501(c)(7).

  • ·        501(c)(7) will allow the club to pay anyone for services rendered at the fair market value.  Ex: An employee working in the facility’s clubhouse must be paid the average hourly wage, and not above the rate.
  • ·        501(c)(7) will allow members to be paid for helping with a tournament for services rendered.
  • ·        501(c)(7) will allow the club to run a tournament as long as that money is used to serve our members. The registration money of a member doesn’t go toward the 35% profit we can make.
  • ·        501(c)(7) will allow the club to hold a contest within the membership with cash prizes.
  • ·        501(c)(7) will allow the club to provide college scholarships.
  • ·        501(c)(7) will allow the club to serve our members, not the public.
  • ·        501(c)(7) will allow donations (not tax deductible for donor, however, donation could be a business expense--like advertising or marketing).
  • ·        501(c)(7) will limit the type of funding that a 501(c)(7) can receive donations, due to most foundations will donate to nonprofits that offer them a deduction credit.
  • ·        501(c)(7) will allow the GOPB to be an Incorporated nonprofit – an independent legal entity under state law and can enter into contracts and purchase property, open bank accounts, and benefit from liability protection.

After a discussion of the questions and answers and reviewing the information (see notes, below), the Board of Directors agreed to remain a 501(c)(7) at the recommendation of Jeri.

Other items that were discussed included:

  • ·        Wild Apricot will be increasing dues.
  • ·        Jo Ann stated Affinipay provides a QR code for members to make payments to their payment page.
  • ·        Rocky will request SFFLC help the monitor with set-up/take-down duties.

Meeting Adjourned at 4:45 pm.

Respectfully submitted,

Kerry Guinn

Secretary, GOPB Board of Directors

*The following information further clarifies and differentiates the two non-profits – 501(c)(3) vs 501 (c)(7) and was copied by Vicky from

·        501(c)(7) social clubs' exempt purpose does not have to be charitable, but it must be social or recreational and non-profitable. 501(c)(7) are limited to membership. Members of these clubs pay dues to support the activities and the facilities, and the clubs might also charge additional usage fees and provide food services.

·        These social clubs are exempt from federal income tax if they're organized solely for recreation and other nonprofit purposes. They operate for the benefit of their members, not to realize a profit.

  •      501(c)(3) organizations must spend their income on activities that further their exempt purpose, which is a charitable cause.

·        501(c)(3) charitable-class members get the benefits of “charitable purposes” from these nonprofits for free, while donor-members pay yet get nothing directly in return (or at least not much more than some relatively cheap branded swag and occasional good feelings inside), which is why those donations are tax-deductible while Social Club membership related payments are not.

·        The underlying principle is that tax-deductible donations should not be self-serving at all, while nonprofit membership club payments are at least a little self-serving, to varying degrees depending on the specific type of organization.

·        Social Club members pay for the social club direct benefits of “pleasure, recreation, and other nonprofitable purposes" via their “dues, fees, charges or other funds…”

·        A 501(c)(7) organization is organized and operated for the social or recreational purposes of a group of people.

·        A 501(c)(7) organization's facilities must be open only to its members (and possibly members’ guests), while a 501(c)(3) organization's facilities are typically open to the public.

·        Organizations that qualify for 501(c)(7) must derive 65 percent of income from its membership and can rely on investment income and other sources for only 35 percent. No more than 15 percent of the club's income can come from providing facilities or services to the public.          

  •      501c7 can be divided between members.
  •     A 501c7 must be primarily supported by dues, fees, charges, or other funds paid by members. That said, 501c7 donations are permissible.

  •     A 501c7 social club may receive up to 35% of its gross receipts, including investment income, from sources outside its membership while retaining tax-exempt status.

Requirements for 501(c)(7) Social Club *(

  • ·        A 501(c)(7) social club must direct most of its income to the club’s exempt purposes in order to remain tax-exempt. This generally means that no more than 35% of the club’s gross receipts should come from non-member sources. No more than 15% of that 35% should come from the use of the club’s facilities or services by the general public.3
  • ·        These social clubs must monitor their non-membership income closely to make sure they don’t go over the allowed percentages.
  • ·        Unrelated income from activities not related to the organization's primary purpose is only taxable to a charitable organization when it goes beyond a certain percentage of support, but all passive income can be taxable to a social club. This can include income generated by dividends, rents, and investments. Proceeds from memberships aren't taxed, but income from unrelated business activities are.
  • ·        Social clubs must be careful about establishing business operations that have nothing to do with their exempt purpose. A dining room to serve members might be okay but running a liquor store probably would not.
  • ·        Social clubs are required to file annual returns of their income and expenses with the IRS even though they're exempt from income taxation for the most part. Form 990, 990-EZ, or 990-N must be filed by the 15th day of the fifth month after the close of the organization’s fiscal year.

Limited Membership

Each entity must have limited membership. However, this does not mean your corporation is allowed to discriminate. Geographic area, college affiliation, or sport enthusiasm are ways to accomplish this requirement.

No Discrimination

No organization that desires tax exempt status can discriminate against employees or members. As noted above, membership can and should be exclusive, but it cannot be discriminatory.

Organizational Support

To fall under 501-C 7 tax exempt status, the corporation must not be in business to make money. Rather, it must rely on its membership for financial support. This is usually accomplished by monthly dues or membership fees but could also include rental fees. A country club could rent out the golf course or space for an event and charge money for the use of it. (

                       501(c)(3) Qualified Charity          501(c)(7) Social Club


Religious, Educational, Charitable, Scientific, Literary,

Pleasure, recreation, social activities


churches, charities, private schools, homeschool programs with an educational or religious purpose

Fraternities, sororities, country clubs, hobby clubs, homeschool support groups


No private inurement allowed. Upon dissolution all assets must be distributed to another 501(c)(3) organization.

Personal contact, fellowship and co-mingling of members. No private inurement allowed.


Can hold programs, sell services and products as part of their exempt purpose.

Can provide meals or services only to members in connection with club activities

Tax deductible donations allowed



Tax exempt (no taxes on profits)

Exempt from federal income tax unless the organization has unrelated business income

Exempt from federal income tax on income derived from members; other income taxed

Source of Income

Membership fees, fees for services, donations, fund raisers, program fees

Primarily (65% or more) of the income must come from the membership


Serving the public or the “public good” (i.e. the education of children is a public good)

Limited membership and consistent with the purpose of the club

IRS Application Required?

Yes, if gross revenues over $5,000/year. File Form 1023 or 1023-EZ

No. The IRS does not require 501(c)(7) organizations to file an application. They can “self-proclaim” tax exempt status.

Annual IRS Reporting

Form 990-N, Form 990-EZ or Form 990

Form 990-N, Form 990-EZ or Form 990

Legislative Lobbying permitted?

Insubstantial lobbying allowed (less than 20% of total expenses). No endorsement of a candidate.

No limit on legislative activity as long as it furthers the exempt purpose

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