BoosterHub

Are Donations to a Booster Club Tax Deductible?

Are donations to a booster club tax deductible? Well, yes and no. For those of you interacting with booster clubs in the past, the rules may have changed since you last visited the topic on your tax return. In the past, donations to a booster club with a 501(c)(3) nonprofit designation entitled you to a write-off on your tax return equal to 80% of the monetary value of your donation, even if goods or services were received. For example, if you donated $10,000 to a booster club in exchange for great seats at a football game, you may only be able to write off $8,000 on your tax return.

In 2019, the tax rules were changed. The good news is that donations to nonprofit booster clubs may still be written off; however, donations may only be written off if they are made with no exchange of goods or services taking place. So thinking through our above scenario, if you donate $10,000 to your favorite booster club, you can include the entire amount as a charitable donation to offset taxable income, as long as you do not receive any benefit from the booster club for doing so.

Booster clubs that do not have a 501(c)(3) nonprofit designation may accept donations, but contributors may not write them off as charitable giving for tax purposes. For these types of booster clubs, the booster club usually must declare any donations received as income and file a tax return showing those donations.

What Is 501(c)(3) Status?

501(c)(3) status is given to nonprofits that are considered public charities, private foundations, or private operating foundations. There are many benefits to becoming a 501(c)(3), and there are many resources available to apply for and receive your status quickly. Booster clubs that have this status are able to:

Participate in fundraising programs
Receive donations that are tax-deductible on the donor’s tax return
Be exempt from paying federal income tax on their earnings
Apply for exemption from state sales tax
Qualify for state gambling licenses to operate BINGO and other games of chance
Receiving a 501(c)(3) status is essential for booster clubs that seek to raise money to support their members.

Booster Club Software

If you are involved in running a booster club, you may use a lot of different applications to manage your finances. BoosterHub software is designed specifically with booster clubs in mind. It can replace all of your other software applications, becaus it provides everything you need all in one platform. It is set up to manage donations, sales, and activities — all from one easy-to-use app! We recommend you apply for and receive your 501(c)(3) status so that you can make the best use of all of the BoosterHub tools, including the financial and fundraising tools. The BoosterHub system provides guard rails for the volunteers managing booster clubs, so that the financial information is easily accessible, easy to work with, and helps you comply with all of your city, state, and federal tax regulations.

You may also like this

No items found.

Ways to Fundraise for a Booster Club

Fundraising is perhaps one of the most important functions of your booster club. However, it can be tough to build momentum, especially if you are new to fundraising as a whole. You can also get stuck in a rut and feel like you are running the same two or three events on repeat. That’s when it’s important to mix things up to keep club members and donors engaged, ensuring a steady stream of support for your student-athletes. With that in mind, here are a few ways to raise more money for the student-athletes you support:

No items found.

Non-Profit Donation Receipt

Whenever someone donates to your club, you must ensure that you send them a clear receipt so they can take advantage of their tax deduction. These receipts are your club’s way of saying, “Thanks for being on the team,” and they’re essential for keeping records organized. Providing a timely and well-documented receipt also makes your club appear professional and organized. In turn, you’ll be able to more easily build trust with donors and encourage them to give again in the future. After all, donors need to be confident that you’re acknowledging and managing their contributions properly. On that note, here are a few tips to help you create compliant receipts:

Booster Club Best Practices

Booster Club Rules

You certainly wouldn’t sign up for a sports league without knowing the rules of the game, so why would you attempt to run a booster club without a clear set of guidelines? In a booster club, the rules take the form of bylaws, which are policies and procedures that are vital in keeping everyone on the same page, helping to avoid misunderstandings, and ensuring that each member understands their part in supporting the club’s mission. In some cases, these bylaws will spell out who can and can’t be members, as well as who is eligible to serve on the board. Some states even have standardized playbooks that you need to follow. The University Interscholastic League (UIL) in Texas, for instance, has a playbook of its own, covering specific bylaws for booster clubs that support school programs. In any case, here are some tips for ensuring everyone in your booster club plays by the rules so you can have a productive year: