BoosterHub

As a charitable organization, your booster club is eligible for 501(c)(3) status. However, to maintain this status, you’ve got to play by the rules. Otherwise, the IRS is going to throw a penalty flag, and that’s not a road you want to go down.

One of the most important rules governing 501(c)(3) organizations concerns what your club can and can’t pay for. Here are some spending dos and don’ts so you can protect your club.

Spending Dos

Your booster club can provide significant financial support for school programs, including bands, sports teams, and extracurricular clubs. The goal of these activities is to fund needs that the school’s budget may not cover. Here are a few examples of things your booster club can pay for:

Equipment
Uniforms
Food for concessions
Pre-game meals
Supplies for athletes and coaches (i.e., electrolyte drinks, coolers)
Travel expenses
Scholarships (provided they are awarded based on objective criteria)

Your booster club can also organize fundraising events that build community and enhance the school’s reputation. Covering expenses associated with these events, such as reserving a spot at the city’s downtown expo or purchasing supplies for volunteers, is allowed.

Generally speaking, covering expenses for an entire team or group of athletes is allowed. You can also cover operating costs for the club, like insurance, supplies, etc.

Now, here are some don’ts.

Spending Don’ts

While your booster club can contribute to various needs, there are clear restrictions to ensure these contributions do not cross ethical or legal boundaries. Some of these restrictions are common sense. Others are not so obvious.

The confusion comes into play because federal, state, and local officials often have overlapping rules about what your club can and cannot pay for. The IRS may allow a particular type of purchase, but a state or local entity may prohibit it.

The IRS’s rules for 501(c)(3) organizations are broad. Under these rules, your club cannot:

Operate for the benefit of private interests
Attempt to influence legislation
Participate in any campaign activity
Distribute earnings to any private entity

Many states have organizations that regulate the operations of booster clubs as well. For instance, the University Interscholastic League (UIL) of Texas prohibits booster clubs from paying for coaches' gifts.

Generally speaking, your club can’t pay for anything for an individual. This includes gifts, plaques, equipment for a single person, or bonuses/wages. For example, you couldn’t purchase a tablet for the head coach of the football team, even if he intended to use it for legitimate purposes, like designing plays.

Staying On the Right Side of Booster Club Rules

The best way to avoid violations is to familiarize yourself with federal, state, and local booster club rules. You should also implement an approval process for any purchases so that the entire club board has a chance to vet expenses. By understanding and adhering to these guidelines, your booster club can continue to provide invaluable support to student activities.

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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:

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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: