Using 501C3 to channel contributions to non-profit/non-501C3

[MgFrobozz]

[I'm new to the site, and to the forum]

I'm a member of a 501-C3 (non-profit) performance group in Portland, Oregon. Our charter is to promote education about Hungarian dance and music.

We attend a Hungarian dance/music camp each summer; the organization of the camp is, technically, unrelated to the group, though several group members are on the board for the camp. The camp itself is not a 501-C3, though is definitely non-profit.

Since the camp running in the red now (and for the past several years), we want to investigate the possibility of campers making donations to the camp via our 501-C3 organization. Contributions would be used to defray the costs of camp, including payments for airfare and salary for the teachers at the camp, payments for camp facilities, etc. We need to figure out:
* Are there legal limits on contributions we can accept and pass on to the camp? If so, what are they?
* Are there any tax implications for these contributions?
* What liabilities would our performance group incur? If the camp loses money, does our group become responsible for the loss? If someone breaks a leg at camp, does our group become responsible for the medical costs?

Thanks in advance for any guidance ...

[aaron]

Given that the company is not 501(C)(3), and given the apparent conflict of interest with the organization's board members, it would be wise for your organization to consult with a lawyer who advises non-profits before proceeding with any such direct subsidy to a commercial (even if money-losing) venture. You may also wish to review the relevant content of IRS Publication 557, on tax-exempt organizations.

An alternative that you may wish to consider and evaluate as well, would be to offer scholarships rather than a direct subsidy.

[MgFrobozz]

Thanks, Aaron ... your idea for scholarships is excellent.