PBUSA and IRS Required Language: What Does it Mean?
During the initial setup of your booster club, you might notice that we're including specific language in your organizing documents. Some of it's in legalese and some of it we just seem weirdly insistent on. Let's walk through what it all means!
IRS Required Language
The IRS requires the following language to be in the organizing documents of most 501(c)(3) organizations. If you are a booster club, PTO, PTA, etc., that's you!
This organization is organized and operated exclusively for charitable and educational purposes within the meaning of 501(c)(3) of the Internal Revenue Code.
Upon dissolution of this organization, its assets shall be disposed of exclusively for the purposes of the corporation or distributed to such organizations organized and operated exclusively for charitable purposes which shall, at the time, qualify as exempt organization under section 501(c)(3), or shall be distributed to the federal government, or to a state or local government, for a public purpose.
No part of the net earnings of the corporation shall inure to the benefit of or be distributed to any director, employee or other individual, partnership, estate, trust or corporation having a personal or private interest in the corporation. Compensation for services actually rendered and reimbursement for expenses actually incurred in attending to the affairs of this organization shall be limited to reasonable amounts.
No substantial amount of the activities of the organization shall be the carrying on of propaganda, or otherwise attempting to influence legislation and this organization shall not intervene in (including the publishing or distributing of statements) any political campaign on behalf of or in opposition to any candidate for public office.
Well, that's not entirely true — the IRS requires there to be language that means the same thing as the above and provides that giant block of text as an example. We've found that when the IRS gives you an example of language that has to be used to maintain compliance, it's best to go along with it. But it's a lot to read in one go, so let's break it down.
This organization is organized and operated exclusively for charitable and educational purposes within the meaning of 501(c)(3) of the Internal Revenue Code.
This is fairly straightforward. It is attesting that you qualify for 501(c)(3) federal tax-exempt status because your activities are some combination of charitable and educational.
Upon dissolution of this organization, its assets shall be disposed of exclusively for the purposes of the corporation or distributed to such organizations organized and operated exclusively for charitable purposes which shall, at the time, qualify as exempt organization under section 501(c)(3), or shall be distributed to the federal government, or to a state or local government, for a public purpose.
This means that if/when your organization closes down it will make sure that any leftover money, equipment, or other assets will be given to another entity with a similar purpose as your own. Most of the time when a school booster club dissolves, they give their assets to the school — it's quick, easy, and clearly satisfies the above.
No part of the net earnings of the corporation shall inure to the benefit of or be distributed to any director, employee or other individual, partnership, estate, trust or corporation having a personal or private interest in the corporation. Compensation for services actually rendered and reimbursement for expenses actually incurred in attending to the affairs of this organization shall be limited to reasonable amounts.
IRS rules say that a nonprofit has to use its funds for the benefit of a "charitable class," which in the case of a booster club or similar organization, is generally going to be the students of the extracurricular program you support. Or in the case of a PTO/PTA, the students, parents, and teachers of the school that you support. You cannot use nonprofit funds for the benefit of any private individual. You also can't steal money from the booster club.
PBUSA Uniform Purpose Statement
This is a brand new (at the time of this writing) requirement from the IRS for subordinate organizations in a group exemption. If you're a PBUSA member, that's you (unless you have your own, independent 501(c)(3) status).
The IRS says that all subordinates in a group exemption of a given type — in this case, school support organizations — must have a uniform purpose statement. In PBUSA's case, that is:
The corporation is organized to support the [school or program] by raising funds, recruiting volunteers, and conducting events.
Simple, easy, inoffensive and covers the bases. We're sorry if you had a pre-existing purpose statement in mind coming into your membership, you can still use it in most places, just not on your governing document.
If you're a PBUSA member who joined us before January 20th, 2026 and have a different purpose statement, don’t worry about it, this doesn’t apply to you as you're grandfathered in under the previous set of IRS rules which didn't require a uniform purpose statement.
Hopefully, this helps you to understand some of the more dense legal requirements. We promise we only use legalese like this when we've found we have absolutely no other option.
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