What is a booster club? How can our organization start one?
Jul 16, · Introduce The Booster Club: while you can certainly fundraise, make sure your first event focuses on introducing your club to the community. Prioritize communicating your mission, educating about the programs that need your support, and showing your donors a good time. Booster clubs need their own EIN, also known as a federal tax ID. Step 3: Get tax-exempt IRS (c)(3) status is needed to participate in grant and scrip programs, and to allow donations to be tax-deductible.
Section c 3 of the Internal Revenue Code allows for tax exemption for organizations organized and operated to foster national or international amateur sports competition so long as no part of the net earnings inure to the benefit of any private shareholder or individual.
In cases of athletic or other types of parent-run and organized booster clubs, it is the last part of this provision that can prove problematic. Avoiding Private Inurement. A parent-run booster club must be organized so that it benefits the entire class of athletes or participants and does not benefit certain individuals over others.
One way to ensure that this private benefit does not occur is to use the money raised from fundraising events in a manner that benefits the club as a whole. Cooperative Fundraising. In this method, there is some sort of point system used where participants are given credits for the amount of time they or their parents spend fundraising; the more fundraising activities you participate in, the more funding you will receive.
The IRS views this method as a private benefit and will not grant tax-exempt status to how to get rid of ringing in ear that use it. However, there are certain cases where cooperative fundraising will not preclude a booster club receiving tax-exempt status.
Additionally, funds may not be given directly to participants, but rather must be applied directly towards the cost of participation. If the participant decides not to participate in the activity for which funds are raised, the funds must how to make modded guns in borderlands xbox 360 to a general fund for the use of all participants. Private Facility Inurement.
In the case of booster clubs that conduct their activities at a private facility, the organization must take precautions regarding any private benefit flowing from the organization to the for-profit facility. The organization must ensure that the owners of the private facility do not exercise influence over the operations of the booster club.
If this occurs, the IRS may take the position that the booster club serves the purpose of promoting private business interests. Also, if the organization purchases any equipment for use at the private facility in which their sponsored teams train, if more than insubstantial in nature, the IRS is likely to conclude that a substantial purpose of the organization is supporting a commercial enterprise. Organizations that support public school programs, however, are subject to an element of public control in that participants are selected based on the objective and nondiscriminatory criteria set by the schools and the funds raised are turned over to the public facility which then exercises discretion over expenditures to benefit all participants or, if the booster club maintains control over the funds, they are limited in the type of expenditures they may make.
This public control often negates the elements of private benefit and inurement that can occur in the private arena. In order to ensure that a booster club is operated exclusively for charitable purposes, it should follow a few basic guidelines: 1 participants must be selected based on objective and nondiscriminatory criteria; 2 all selected participants must be allowed to participate in club activities regardless of parent participation in fundraising; 3 cooperative fundraising must only account for a small amount of the clubs activities and students must not exercise control over funds raised for their benefit; and 4 when the club uses a for-profit facility, the clubs activities must not support the for-profit organization.
To contact Ellis, call or email us at info caritaslawgroup. Caritas Law Group exclusively represents tax-exempt, non-profit, and mission-based businesses, as well as major donors and companies engaged in cause marketing.
With offices in Tempe, Arizona, our attorneys are licensed to practice in Arizona and Washington and represent clients with regard to federal tax matters nationwide. Forming a c 3 Booster Club. On January 17, Forming a c 3 Booster Club Section c 3 of the Internal Revenue Code allows for tax exemption for organizations organized and operated to foster national or international amateur sports competition so long as no part of the how to form a booster club earnings inure to the benefit of any private shareholder or individual.
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MANAGING YOUR MONEY
Dec 12, · Organize the booster club. Establish officers, bylaws, a constitution and procedures for the booster club. Bylaws provide rules for how the booster club will operate, when the club will meet and how decisions will be made. Decide which school program (s) the club will support. A booster club is an organization that is formed to support an associated club, sports team, or organization. The booster club can support this through raising funds or coordinating events. While each operates differently, many booster clubs are organized and run by . Make everyone in the club sign an informed consent form as an agreement to serve in the booster club. The form acknowledges that the volunteers are there under their own free will and recognize that they will not personally profit from the organization. Discuss the annual budget for the booster club.
This is my step-by-step guide to starting a booster club. You can click links for more detailed advice on how to accomplish each step. I also put them in what I believe to be the correct order of tasks for starting a booster club.
Many people have created booster clubs, often with no resources or advice to draw on. Now take a look at this list to see where you need to go. Get your story straight: Why do you think that there needs to be a booster club? Has funding been cut recently in your district? Is there an ongoing need, or do you just need to raise funds for one-time investment, like an astroturf field or a refurbishing a theater stage? Taking time to list your reasons is the first step to recruiting parents and drafting your bylaws and mission statement.
Meet advisers: school administrators are particularly useful. They understand the school rules that need to be addressed in your mission statement and charter. They can also refer you to members of other booster clubs in your area, and the most pertinent art directors, teachers, and coaching staff. All these advisers, from administrators to coaches, will give you a fresh perspective and inform fundamental decisions about your club.
For example, say you wanted to form a club to support a choir. Recruit volunteers: parents, alumni, and other community members. Reach out at parent meetings. Ask to put an announcement in the alumni newsletter. Contact local volunteering organizations and put up announcements on volunteering websites such as Craigslist or idealist. Paperwork, IRS forms, bank accounts and your first fundraiser will require some money. See if your founding members can donate a little or make an interest-free loan.
The mission is a ruler that will measure everything the club does. You can certainly amend them later, but only through explicit and intentional change. So read ahead to 6 and make sure your mission and charter conform to IRS rules before your final drafts are adopted.
Consider becoming a c 3 , also known as a tax-exempt non-profit. Most clubs do this. Apply to be a c 3 with the IRS. Even before you have received approval, you can act like a non-profit and start fundraising. In the vein of legal structure, consider incorporating. Not many clubs do this, but it can help you avoid legal liabilities down the road. Create a system of financial accountability: There are many ways to do this, including multiple check signers, third party audits, and you can even get your members bonded.
Not only does embezzlement actually happen to clubs, but fear of embezzlement can create distrust among members. By creating good systems for financial accountability, you can relax and focus on fundraising. Get a business bank account. Introduce The Booster Club: while you can certainly fundraise, make sure your first event focuses on introducing your club to the community. Prioritize communicating your mission, educating about the programs that need your support, and showing your donors a good time.
Did you participate in the founding of a booster club? In future posts, I will highlight stories of booster clubs young and old, and how they got going. Email Address Submit. Home Resources Blog Contact. Leave a Comment. Do Your Homework, and Build a Team 0. Subscribe to the Blog Email Address Submit. Innovation in Fundraising: Overhead, Risk, and Pancakes. Contact us Email: info boosterland. Subscribe to the blog Email Address Submit.