Social Committee funding

Our Social Committee is fairly new. Their thought was that they would accept donations, charge fees, or perform raffles in order to pay for all of their events - so at they could be completely self-funding. We live in a town that has a large number of HOA communities, and this is how almost all of them pay for their social events.

Our property manager, however, balked at the idea of opening a checking account in which this money could be deposited, and in fact has told us the social committee cannot collect money of any kind because "it is taxable and excludes some people." He said it's better if the HOA simply budgets for the social committee and they draw from that budget line.

Does anyone know if there are tax or filing consequences of the social committee collects money and then spends it on events?

If the social committee is part of the HOA - then your MC is correct in that all funds they collect would be taxable.
This creates more work, filing taxes, but I don't feel is a reason not to open an account.

Unknown about the excluding of people reason.

If the social committee is their own entity (and they could be), then they would govern themselves with zero input from the board and would need to file taxes as well.

I'm curious about this idea, but I see two potential problems. First, wouldn't this Social organization need to create a legal entity, with all of the paperwork and tax filing related to that? That seems like a major PITB.

Second, currently the Social Committee can reserve our clubhouse, patio area, etc. for events because they are part of the HOA. Would they still be allowed to do that if they are now an independent organization? Or can the Board simply declare that this organization has the right to reserve amenities?

In our Association, our social committee does not have its own budget nor receive money from the Board. People who come to the events pay their own way or bring what they need.