I have a child in two separate 501(c)(3) extracurricular music programs at school. She has a remaining balance in her band program and owes money to the chorus program. There are no by-laws in the band program against the transfer of funds to another school organization. I know there are laws against giving the money back. Are there any rules against transferring funds between school programs in the name of a child?
You are running up against the problems faced by 501(c)(3) charitable organizations that run programs for school kids and attempt to allocate accounts to individual students. If the organization claims to be a charity, it shouldn’t be asking for contributions for the benefit of particular students because contributions earmarked for individuals are not considered charitable contributions. The family “contribution” to their personal account is really a payment for services and the right to participate. It is not a deductible gift, although a lot of parents and family friends, perhaps with the encouragement of the organization, claim a charitable deduction.
Since your question suggests that the club won’t give the surplus back to you, they have probably treated the payment as a charitable contribution to the program as a whole, even though it is solely for the benefit of your daughter.
It would not be a charitable transaction for the band program to transfer funds to the chorus program earmarked for the benefit of your daughter. They could transfer funds to the chorus program for its general operations, but not for the benefit of your daughter. If they are trying to claim charitable status and understand this part of the rules, they probably won’t make the transfer for your daughter’s benefit.