Congratulations... You’re in charge of a school booster club! Now what?! PBUSA’s QuickStart Guide provides helpful tips on how to get organized, and legally operate your booster club.
- Incorporate. PBUSA recommends that booster clubs be incorporated. Incorporation provides liability protection for the officers, directors, and volunteers. It also provides additional credibility and a legal entity that may contract for services. Not sure if your group is incorporated? PBUSA will assist your organization to research state corporate records to find out. PBUSA helps incorporate clubs in our Get Legal membership level.
- Check your EIN. Booster clubs should have their own EIN (employer identification number also referred to as a taxpayer identification number). This number is issued by the Internal Revenue Service and identifies your organization with the IRS. As an independent legal entity, your booster club should have its own EIN and not use the schools.
- Obtain 501(c)(3) STATUS. All groups that raise money must file the appropriate tax return. Booster clubs recognized as 501(c)(3) charitable organizations may file the IRS 990-series return and be exempt from paying tax on their income. A group that is not recognized as 501(c)(3) tax-exempt may be expected to file a corporate tax return. Tax-exempt (c)(3) charities may also receive tax-deductible donations and apply for private foundation and corporate grants.
- Handle state REGISTRATIONS. Many states provide groups with federal 501(c)(3) status to apply for exemption from state sales tax. Many states also require nonprofit groups to register with the attorney general or other state agency prior to fundraising.
- Gather your TEAM. It’s important to have a team of officers and other volunteers to spread out the work. Consider having a different volunteer chair each event or activity so no one is asked to take on too much.
- Review your BYLAWS. An organization’s bylaws provide the rules for how to operate. They usually include duties of the officers and their election process, qualifications for membership, budget guidelines, the method by which funds are appropriated, and detailed financial controls. PBUSA strongly recommends all organizations have current bylaws; we offer sample bylaws to member clubs.
- Create a BUDGET. It’s important to develop, and have the board and members adopt, a budget for the year’s activities. Include in the budget each activity or source of income and the amount that you expect to raise from each. Also include each type of expense, and the estimated costs. At each meeting you should track the budgeted income and estimated expenses against the actual income and expenses.
- Check your BANK ACCOUNTS. You may need to update the signature cards for the organization’s bank accounts. In addition, review the EIN (federal employer identification number, a nine digit number in the form XX-XXXXXXX), which is used on the bank account and to identify your group with the IRS.
- Report to your MEMBERS. Nonprofits should strive for transparency with their members and donors. Membership meetings should include a report on current activities and provide a budget-to-actual report showing income and expenses to date. Proper financial controls should be in place so that all transactions are approved in the annual budget or by a subsequent vote to amend the budget, and individual(s) without signature authority on bank accounts should review all bank statements. Refusal to provide financial and activity reports to the members often is a red flag for problems.
- File all required FEDERAL AND STATE REPORTS, REGISTRATIONS AND RENEWALS. Tax-exempt 501(c)(3) groups must file an IRS 990-series return by the 15th day of the 5th month after the close of their fiscal year (e.g., May 15th if your fiscal year ends December 31; November 15th if your fiscal year ends June 30). Most states require corporations to file an annual report that lists your officers and directors. Many states also require renewal of your annual fundraising registration and sales tax exemption certificate.
Parent Booster USA makes it easy!
- PBUSA’s Basic membership provides 501(c)(3) tax exempt status under PBUSA’s IRS group exemption.
- Basic membership also provides tools, tips and information to operate your booster club including sample documents & webinar training.
- A bookkeeping/financial reporting software package included free with membership helps keep your bookkeeping and records on track!
Need more help?
*An additional, discounted fee applies for filing a 990EZ or Full 990 (See IRS 990 Member Filing Service).
- PBUSA’s full service Get Legal membership includes help to incorporate your booster club, obtain a federal EIN for you, and register your organization with your state for sales tax exemption and fundraising.
- Renew as a Stay Legal member and PBUSA will file your 990N* with the IRS and the state reports and renewals required to keep your booster club in compliance in your state.