Four rules for keeping your gymnastics booster club running clean…

by Sandra Pfau Englund on Aug 10, 2018 12:36 pm

A clean routine is the goal of every gymnast. It’s also a good goal for gymnastics booster clubs. Yet, many gymnastics boosters are running far afield from IRS rules for 501(c)(3) organizations. Make sure your gymnastics booster club performs a clean routine every time by following these 4 guidelines.

  1. Support the entire competition team. IRS rules require that 501(c)(3) tax-exempt organizations operate exclusively for a public purpose, and not engage in private benefit activities. Essentially this means that you must use the funds the boosters raise to support all athletes, regardless if the athlete, or his/her parents, help raise the money and regardless if the athlete or his/her parents are members of the booster club.

Many gymnastics booster clubs keep track of the volunteer hours that each member works, and/or track the amount of money each person raises, and then provide a credit against the annual fees charged by the booster club. Operating this way is against IRS rules and federal law for 501(c)(3) groups.

Membership in gymnastics booster clubs, and helping the booster club with fundraising, both must be voluntary, and must be unrelated to how the booster club funds are used.

  1. Use funds raised to cover specific costs. One of the easiest ways to ensure that your booster club is operating by the rules is to use the funds raised for specific cost items such as:
    • Competition coaching fees;
    • Competition leotards; and,
    • Competition entry fees.

Do not simply divide the amount raised, say $1000, by the 10 gymnasts on the team, providing each with a $100 credit toward competition costs. In addition, don’t estimate the total annual costs/gymnast for the entire year, deduct estimated fundraising dollars, and then bill parents for the remainder. Operating this way gives the appearance that it is the booster club that charges fees for gymnasts to compete. Doing so is against IRS rules.

Instead, use booster funds to pay for specific competition expenses, such as all competition coaching fees, or all regional and national competition entry fees. It’s o.k. if some team members compete in more events, or at more competitions, and therefore have more fees covered than other gymnasts. Treating athletes “equally” is not a dollar-for-dollar rule. And if the booster funds raised can’t or don’t cover all competition costs, it’s o.k. that parents cover the additional costs. However, to avoid any appearance that the booster club is charging fees, and is responsible for determining who can and cannot compete, monies collected from parents should relate to specific fees charged by third parties (e.g. $59.95 for the competition leotard). The boosters may collect the fees, and pay for the entire team, but it should be clear that a third party (competition sponsor, leotard vendor, etc.) will receive the money collected.

  1. Budget yes, but don’t require athletes and/or their parents to volunteer. Under IRS rules, you may not require athletes or their parents to be members of the booster club, or to volunteer, or to participate in fundraising.

You should, however, develop an annual budget showing line item by line item the costs the boosters hope to cover with funds raised. Then distribute this budget to all team members, detailing the cost of supporting competition athletes at each level. Using this budgeting tool, you may request that athletes either help raise the money by participating in fundraising, or alternatively make a “fair share” donation. Provided that your language, and actions, makes clear that “fair share donations” are voluntary, these donations are allowed, and may be tax-deductible to the donor. You may also have annual booster club dues, provided that membership in the booster club is voluntary.

  1. Keep separate from the for-profit gym. Gym owners should not have a vote on booster club matters, or otherwise control the boosters.

For-profit gym owners may attend booster club meetings and provide information and advice, however, gym owners should serve as advisory members and never have voting rights. When votes are taken, it’s a good idea to have the gym owners leave the room. Your booster club also should never purchase equipment or pay any costs that reduce the gym owner’s costs of operating their for-profit training facility. This is another reason that having boosters cover competition related costs, making payments directly to vendors and not through the gym, is the best approach to keeping things separate between the boosters and the gym.


Sandra Pfau Englund

Founder of Parent Booster USA

Sandra Pfau Englund was a working mom in 2004 when she volunteered for her son’s elementary school PTO. The nonprofit and tax law attorney quickly became mired in trying to organize the group’s finances, tax-exempt status and fundraising compliance. If it was this complicated and time consuming for someone with her professional knowledge, she wondered how other parents and booster groups managed. From that experience, Parent Booster USA was born.

Sandra is a sought-after subject matter expert and has been quoted by NBC’s TODAY show and in Forbes and The Wall Street Journal, among others. She is published and speaks throughout the country on issues related to nonprofit legal liability, financial controls and audits in a post-Sarbanes-Oxley world, board development and fundraising.

Learn more at sandrapfauenglund.com.

FEATURED BLOG

Running an Effective Meeting

Sandra Pfau Englund

Aug 30, 2019

Booster club bylaws often reference Robert’s Rules of Order as the “rules” for managing a meeting. Have you ever read Robert’s Rules? It’s a good way to get a good night’s sleep!

O.k., so, having no rules leads to muddled, oftentimes chaotic meetings. On the other hand, using strict Robert’s Rules of Order can result in confusion or imbalance, dominated by those very few who understand Robert’s Rules. According to Sandra Englund, founder of Parent Booster USA, it’s far better to use a simplified form of parliamentary procedure. Using Sandy’s Simple Parlipro for Nonprofit Organizations, you provide a solid framework for your meeting that encourages everyone to participate and stops any one person from controlling it.

Meetings should not be all about the rules. According to David Gillig, Senior Vice President of Children's Hospital and Health Center in San Diego, a meeting should be 80% inspiration, learning and fun, and 20% business. Busy parents are more likely to attend if they feel as if they will gain something for themselves, and their kids, out of the meeting. We recommend that you start the meeting with something fun or educational — our parent engagement blog talks more about this.

Place reports at the end of the meeting; consider providing digital or written copies of reports that parents can read outside of the meeting. No one wants to sit through standard reports. One exception is financial reports. Always include the treasurer’s report. The treasurer’s report should include a written budget and a report that shows how money was raised and spent. Making bank statements available is a good way to help ensure accountability. You can read more on financial accountability here.

It’s good practice to put start times for each item on the agenda. This helps ensure that the meeting stays on track and flows effectively. It’s particularly important if you are discussing any controversial issues in which it is more likely that someone will filibuster! Having a rule that each person gets an opportunity to speak once, before anyone is given a second opportunity to speak, helps encourage more participation.

Below is a sample agenda to help you get the most out of your booster club meetings. Start your meeting by reviewing the agenda. This is where you can explain the “rules” you’ve set for the meeting, including for example, that you will work to stay on-time to help ensure that the meeting starts and ends accordingly. You can also mention here, or just before the Q&A time with the principal, that each person will be provided the opportunity to speak once before anyone speaks for a second time. The report time is kept brief to allow the bulk of time to be given to the information provided by the principal. Minutes need approved; although a little unusual, we included approving the minutes at the end to allow more time for the more important matters up front.

ABC Booster Club
Agenda
[DATE]
1. Call to order & Review of Agenda 6:00p
2. Guest speaker – Principal Melissa Everly discusses school remodel plan 6:05-6:25p
3. Q&A 6:25-6:35p
4. Financial report 6:35-6:45p
5. Other reports 6:45-6:55p
6. Approve minutes from prior meeting 6:55p
7. Next Meeting 6:59p
8. Adjourn 7:00p

Planning and structuring your meeting for success if the key to having an effective meeting.

YOU SUPPORT THEM, WE SUPPORT YOU

With PBUSA membership, we file all the IRS and state paperwork. We keep your booster club up and running year after year.