If you spend a lot of time hanging out in the nonprofit world, like the ioby team, you’re likely familiar with the term “501(c)(3).” This is the Internal Revenue Service’s code for tax-exempt, nonprofit organizations like charities and foundations.
While you might not be as familiar with the classification 501(c)(7), chances are good that you’re a member of one. 501(c)(7) organizations are also tax-exempt (generally speaking), but instead of existing to serve charitable goals, they are “organized for pleasure, recreation, and other nonprofitable purposes.” (Hence why they’re often called “social clubs.”) So, while the Red Cross, for example, is a 501(c)(3), the national women’s social group Theta Phi Alpha Fraternity is a 501(c)(7). Crucially, the 501(c)(7) organizations that you’re likely a part of are run for the benefit of members, and do not pursue a profit.
Other types of 501(c)(7) social clubs include:
– Amateur sports clubs
– Supper clubs
– Homeowners or community associations
– Country clubs
– Clubs for hobbyists, like model railroaders and gardeners
What’s crowdfunding got to do with 501(c)(7)s?
Like any not-for-profit organization—or any unincorporated, informal, or “grassroots” group, for that matter—501(c)(7)s need sources of income to do what they do, whether that’s caring for a communal good like a garden or sports equipment, or a members-only publication.
While membership dues are usually a 501(c)(7)’s backbone of financial support, the need can sometimes arise for a funding boost for a particular project or unanticipated cost. That’s where crowdfunding can come to the rescue. With a built-in base of supporters—aka members—501(c)(7)s are great candidates for raising money by crowdfunding, since it relies on spreading the word and gaining buy-in from like-minded supporters. (Watch this two-minute video about the other key features of a successful crowdfunding campaign.)
But my social club / sports club / hobby club is not incorporated… can I still crowdfund?
Yes! ioby loves helping unincorporated local organizations raise the money, awareness, and volunteer support they need to get their projects off the ground. So even if you’re not a registered 501(c)(7), as long as your project meets our criteria, you can still fundraise with us.
The only big difference between how 501(c)(7)s and non-registered groups fundraise on ioby is the matter of fiscal sponsorship. While 501(c)(7)s can generally show proof of their tax-exempt status by sending us their federal determination from the IRS, ioby can act as the fiscal sponsor for unincorporated groups–so you can still collect tax-exempt donations. Read more about how our fiscal sponsorship service works, and how we can enable your grassroots group to crowdfund for tax-deductible donations.
Social club success stories
The following successful ioby campaigns all typify what a social club can do for its community—and they all crowdfunded the cash and social capital they needed to do their good work! Read on and see if they spark any ideas…
1) Sports club: Give a Girl Soccer, Give Her Goals, Watch Her Win
In 2016, members of two Memphis women’s soccer leagues—the O35 Indoor Soccer League and the Laid Back League—teamed up to support the Sheffield High School girls soccer team, providing them with equipment and helping to facilitate their practices. The experience reminded the women of “why we fell in love with soccer: the support, the encouragement, the friendship, and the fun still fundamental to why we continue to play.” They have continued, and stepped up, their support ever since.
In 2019, the players are crowdfunding to cover the costs of equipment, clinics, and scholarships—and are currently over halfway to their $4,300 goal.
2) Dance club: Harlem Rhythm 2nd Annual Community Dance
Harlem Rhythm’s community dances are intergenerational, cultural, and educational events that celebrate Harlem heritage and community pride. In addition to taking advantage of free dance instruction and the opportunity to meet their neighbors, attendees can learn about the services offered by local nonprofits, government agencies, and institutions who serve the Harlem community at resource tables located around the venue.
Harlem Rhythm is crowdfunding now for this summer’s event. They’re aiming to raise $5,473 to cover costs like marketing, music, and professional dance instruction.
3) Swimming club: Tony Dapolito Recreational Center, Starting Block for Swim Team
The Tony Dapolito Aqua Devils is a free swim team for NYC kids ages 6 to 18. Four times a year, the diverse team of 40 swimmers competes in city-wide meets against 12 other Parks & Rec teams. Unfortunately, the Tony Dapolito Recreation Center pool did not used to have any starting blocks—a situation that put the young swimmers at a big disadvantage versus other city teams.
In 2018, a group of Aqua Devils parents crowdfunded almost $5,500 on ioby to purchase and install the pool’s first starting block—helping to give their kids an equal chance to prepare for and do their best at meets.
4) Bike club: North Side Youth Mountain Bike Club
This Pittsburgh sports club gives kids, and parents, the chance to ride bikes in a safe and fun park environment. Members ride together, get to know one another, and work together to improve the park’s trails. Everyone is welcome to join—especially women and girls, people of color, low-income families, and people who are brand new to mountain biking. The club raises money and partners with a local bike shop to make sure that every kid who wants to ride with them is able.
Last year, North Side raised a whopping $11,022 on ioby to buy bikes and helmets, hire coaches, and pay registration fees for youth bike races, among other annual expenses.
Feeling social? Feeling sporty? Whether your organization is a 501(c)(3), 501(c)(7), or simply a group of dedicated neighbors working to make your community better, we want to hear from you! Tell us your project idea, and we’ll help you raise the support you need to make it happen.