A beautifully spherical ball of money held in a woman's hands

White Paper Details School Booster Club Fundraising Rules

by Parent Booster USA on Dec 14, 2010 12:00 am

Parent Booster USA today released a white paper to help school booster clubs determine if their fundraising activities are legal. Every school booster club from the PTO to the band boosters to the cheerleaders to sports teams sells products to raise funds. However, the Internal Revenue Service has questioned whether fundraising activities that provide “credit” to volunteers who participate qualify as charitable, tax-exempt activities.

It’s often expensive to send your child on a band tour, participate in the show choir, or compete with the gymnastics team. To help cover these costs, booster clubs often provide credit to volunteers who sell products or participate in other fundraising activities. After all, shouldn’t those students and parents who participate be rewarded for their efforts? Not so, according to the IRS. IRS rules for nonprofit, charities provide that ALL proceeds must be used for the tax-exempt purposes of the organization. If any funds are used to pay the personal expenses of participants, tax-exemption may be revoked.

The IRS calls fundraising programs in which participants receive credit using individual fundraising accounts “cooperative fundraising,” and has said too much of this type of activity may disqualify a booster club from tax-exempt status.

“The IRS rules in this area are very confusing,” noted Sandra Pfau Englund, an attorney, founder of Pfau Englund Nonprofit Law, P.C. and author of the recent white paper. “The most recent IRS writing I can find on this subject is from 1993, and even it doesn’t provide clear, hard and fast rules.”

Ms. Englund's white paper includes a flow chart to help booster clubs determine if their fundraising activities are likely to pass muster with the IRS. It offers three key conclusions about cooperative fundraising and when it may, and may not, be allowed. The white paper, The Legality of School Booster Clubs Engaging in Cooperative Fundraising Activities, is available to download free-of-charge.

View/download the white paper

Parent Booster USA is a national nonprofit organization that provides federal 501(c)(3) tax exempt status to its members under an IRS group letter ruling. PBUSA also provides guidance and assistance to help school support organizations operate effectively.

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.

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