Colorful clay figures of a police man and business man with a bag of money

Cooperative fundraising / IFAs

"Cooperative fundraising" is when a group's members join together (cooperatively) to raise money and then credit the funds raised (or the time spent volunteering) to the individuals who participated in raising the money (the accounts credited are known as "Individual fundraising accounts"). These types of activities, while common among booster clubs, are not considered a 501(c)(3) tax-exempt activity.

Tax-exempt 501(c)(3) organizations must be operated for a "public" purpose. Booster clubs, for example, often operate for public purposes such as supporting amateur athletics, supporting arts in the schools, community support for public education and the like. The IRS and tax court have both found that cooperative fundraising activities are operated for the private benefit of the individual members of the group involved in the fundraising. This type of cooperative fundraising may be engaged in by a for-profit, tax-paying organization, but not by a nonprofit, tax-exempt 501(c)(3) group. If cooperative fundraising comprises any significant part of your group's total activities (think more than 5% of total funds raised are credited to the individual accounts of parents/students participating in the fundraising although the IRS does not have a specific percentage test), then your group likely would not be considered to qualify for 501(c)(3) status by the IRS.

PBUSA highly recommends avoiding the use of Cooperative Fundraising or Individual Fundraising Accounts entirely. See the PBUSA IFA Policy. Other fundraising options include:

  • Fair share donation plans -- in which your organization advises parents/students of the cost of participating and encourages, but does not require, that contributions of a set amount be paid
  • Seeking out corporate, foundation and other donations, letting the donors know that contributions are tax-deductible provided nothing of significant value is received for the donation
  • Using all funds raised to support the entire group, regardless of volunteer or fundraising participation
Related articles

IRS Article - Athletic Booster Clubs: Are They Exempt?

Tax Court Ruling - Capital Gymnastics: August 2013

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.

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