# What Booster Club Bylaws Must Include: IRS and State Rules

> The provisions booster club bylaws and articles must contain: IRS purpose and dissolution clauses with sample language, the inurement ban, and state rules.

- URL: https://boosterclub.org/bylaws/required-provisions/
- Section: Bylaws
- Updated: 2026-10-08

Booster club bylaws must line up with two sets of legal requirements: federal tax law, which a 501(c)(3) booster club must satisfy to keep its exemption, and the nonprofit law of the club's state. The federal requirements are a purpose clause, a dissolution clause, and a ban on private inurement. State requirements vary and govern the board, quorum, officers, and members. The president and secretary own this review.

A 501(c)(3) organization is one recognized by the Internal Revenue Service (IRS) as exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code. Missing or defective language can delay an exemption application or force an amendment.

## Where the IRS Language Must Appear

Under the IRS "organizational test," the organizing document must limit the organization's purposes to exempt purposes and must not authorize substantial activity outside them.

| Club structure | Organizing document | What the IRS looks for |
|---|---|---|
| Nonprofit corporation | Articles of incorporation (some states use "certificate of incorporation" or "certificate of formation") | Evidence that the state filed and approved it |
| Unincorporated association | Articles of association or constitution | The name, purposes, date adopted, and signatures of at least two individuals |

Bylaws do not pass the test on their own. IRS Publication 557 states that the purpose limit "isn't satisfied if the limit is contained only in the bylaws or other rules or regulations." Bylaws can serve as an unincorporated club's organizing document only if they include its name, purposes, signatures, and intent to form an organization (Form 1023-EZ instructions).

The practical rule: put the IRS language in the articles and repeat it word for word in the bylaws. See [How to Incorporate a Booster Club](https://boosterclub.org/start/incorporate/).

## The Purpose Clause

The IRS publishes suggested purpose language in Publication 557 and on its suggested language page:

> Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.

Three rules govern how a booster club adapts it:

1. **"Exclusively" stays.** Publication 557 says the organizational test may be met when the stated purposes are limited by reference to section 501(c)(3).
2. **The list may narrow, not widen.** A booster club may name only the purposes it actually has (usually charitable and educational) and add a specific purpose, such as supporting the band program at a named school.
3. **Every word is read together.** The Form 1023-EZ instructions warn that a reference to section 501(c)(3) does not cure other language that is broader. A clause that adds "and to promote fellowship among members," "for the benefit of its members," or "any lawful purpose" can fail the test. The instructions direct an organization with overbroad purposes to amend before applying.

## The Dissolution Clause

Publication 557 requires that a 501(c)(3) organization's assets be "permanently dedicated to an exempt purpose." If the club dissolves, what remains must go to an exempt purpose or to a government for a public purpose. If the governing documents would let assets go to members or private individuals, the organizational test is not met. The IRS suggested language:

> Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.

- **A named recipient needs a fallback.** A club may name a recipient, such as a school foundation serving the same program. The Form 1023-EZ instructions accept this only if the named organization must be exempt under section 501(c)(3) at dissolution and the clause provides for exempt purposes if it is not.
- **State law can fill a gap but cannot fix a bad clause.** In some states, state law already directs a dissolving charity's assets to charitable uses, so the IRS does not require an express clause. The Form 1023-EZ instructions (revised January 2025) cite Rev. Proc. 2024-22 for this; Publication 557 (January 2025) still cites the older Rev. Proc. 82-2. Either way, a clause sending assets to officers, directors, or members must be removed before the club applies.
- **Common booster errors are fatal.** "Remaining funds will be refunded to families" or "divided among the senior class" fails the test.

Booster-adapted sample language appears in [Booster Club Bylaws Article by Article](https://boosterclub.org/bylaws/article-by-article/).

## The Private Inurement Prohibition

The IRS suggested articles include this prohibition:

> No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof.

Inurement means the club's income or assets flowing to an insider, which the IRS defines as "a person having a personal and private interest in the activities of the organization." In a booster club, that includes officers, directors, and parent members.

Practices that cross the line include crediting fundraising proceeds to individual students' accounts, waiving an officer's family's fees as a perk, and paying an officer's business more than fair value. The consequences are loss of exemption and, for excess benefits, federal excise taxes: Publication 557 describes a 25% tax on the person who benefited, a further 200% if not corrected, and a 10% tax on an officer or director who knowingly approved it. See [Private Benefit, Inurement, and Individual Fundraising Accounts](https://boosterclub.org/taxes/private-benefit/).

## Political Campaign and Lobbying Limits

The same IRS article continues: "No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office." A booster club may not endorse or oppose candidates, including school board candidates, and its lobbying must stay insubstantial. The article closes with a catch-all barring any activity a 501(c)(3) may not carry on; the IRS offers substitute wording for states where a reference to federal law in articles is invalid.

## State-Required Provisions

An incorporated club's state nonprofit statute fills every gap the bylaws leave and overrides any bylaw that conflicts with a mandatory rule. Statutes typically address minimum directors, board quorum, required officers, and members. The rules vary by state. Four examples:

| Rule | California | Florida | New York | Texas |
|---|---|---|---|---|
| Minimum directors | One or more (Corp. Code 5151) | Three or more for a 501(c)(3) (Fla. Stat. 617.0803) | Three (N-PCL 702) | Three (Bus. Org. Code 22.204) |
| Default board quorum | Majority; bylaws may set lower, but not below one-fifth of directors or two, whichever is larger (5211) | Majority; only the articles may set lower, not below one-third; directors under 18 do not count (617.0824) | Majority of the entire board; bylaws may set lower, but not below one-third for a board of 15 or fewer (707) | Majority, or a number of at least three set in the certificate of formation or bylaws, whichever is less (22.213) |
| Officers | Chair or president, secretary, and treasurer or chief financial officer; the secretary, treasurer, or CFO may not also be president or chair (5213) | As the articles or bylaws provide; one person may hold several offices (617.0840) | President and secretary may not be the same person (713) | President and secretary required; may not be the same person (22.231) |
| May the club have no voting members? | Yes (5310) | Yes (617.0601) | Yes, for a charitable corporation (601) | Yes (22.151) |

These four states show how much the rules differ; they do not summarize national law. Statutes also change: Florida amended its director and quorum sections in 2026. Before adopting or amending bylaws, the secretary checks the club's current state statute. See [Booster Club Filing Requirements by State](https://boosterclub.org/states/).

## Common Mistakes

- **Purpose language that is too broad.** Founders borrow social or general-purpose wording from a business template. The club must amend its articles before exemption is recognized.
- **A dissolution clause that returns money to families.** It sounds fair to parents. It fails the organizational test, and state law will not rescue it.
- **Naming a recipient with no fallback.** The named group may be gone or no longer exempt when the club dissolves.
- **Bylaws that ignore the state statute.** A two-person board or a quorum below the statutory floor leaves board actions open to challenge.
- **IRS language in the bylaws but not the articles.** The incorporated club fails the organizational test even though the words exist somewhere.

## Checklist

- [ ] Pull the filed articles (or signed articles of association) and current bylaws (secretary)
- [ ] Confirm the articles limit purposes to section 501(c)(3) purposes, with no broader language
- [ ] Confirm the dissolution clause sends assets only to exempt purposes or to government
- [ ] Confirm any named dissolution recipient must be exempt at dissolution, with a fallback
- [ ] Confirm the inurement, political campaign, and lobbying limits appear in the articles
- [ ] Copy the purpose, limitation, and dissolution language into the bylaws word for word
- [ ] Check the state statute on directors, quorum, officers, and members (bylaws committee)
- [ ] Amend the articles with the state, before applying for exemption, if IRS language is missing
- [ ] File the verified copies in the permanent records (secretary)

## Related Pages

- [How to Get 501(c)(3) Status for a Booster Club](https://boosterclub.org/start/501c3/) explains the application that tests these clauses
- [Booster Club Bylaws Article by Article](https://boosterclub.org/bylaws/article-by-article/) gives booster-adapted sample language for each clause
- [Private Benefit, Inurement, and Individual Fundraising Accounts](https://boosterclub.org/taxes/private-benefit/) explains why per-student credits endanger exemption
- [Dissolving or Merging a Booster Club](https://boosterclub.org/governance/dissolution/) covers what happens when the dissolution clause is used
- [Booster Club Filing Requirements by State](https://boosterclub.org/states/) has each state's nonprofit corporation rules

---

*This page is general information for volunteer-run booster clubs. It is not legal,
tax, or accounting advice, and BoosterClub.org is not a law firm, accounting firm, or
government agency. Rules change and vary by state and district. Confirm current
requirements with the IRS, the relevant state agency, the school district, and a
qualified professional before acting. If a fact on this page is out of date, we want
to know.*

## Sources

1. IRS: https://www.irs.gov/charities-non-profits/suggested-language-for-corporations-and-associations-per-publication-557
2. IRS: https://www.irs.gov/publications/p557
3. IRS: https://www.irs.gov/instructions/i1023ez
4. IRS: https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations
5. California Legislative Information: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=5151
6. California Legislative Information: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=5211
7. California Legislative Information: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=5213
8. California Legislative Information: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=5310
9. Florida Legislature: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0617/Sections/0617.0803.html
10. Florida Legislature: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0617/Sections/0617.0824.html
11. Florida Legislature: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0617/Sections/0617.0840.html
12. Florida Legislature: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0617/Sections/0617.0601.html
13. New York State Senate: https://www.nysenate.gov/legislation/laws/NPC/601
14. New York State Senate: https://www.nysenate.gov/legislation/laws/NPC/702
15. New York State Senate: https://www.nysenate.gov/legislation/laws/NPC/707
16. New York State Senate: https://www.nysenate.gov/legislation/laws/NPC/713
17. Texas Legislature: https://tcss.legis.texas.gov/resources/BO/htm/BO.22.htm#22.151
18. Texas Legislature: https://tcss.legis.texas.gov/resources/BO/htm/BO.22.htm#22.204
19. Texas Legislature: https://tcss.legis.texas.gov/resources/BO/htm/BO.22.htm#22.213
20. Texas Legislature: https://tcss.legis.texas.gov/resources/BO/htm/BO.22.htm#22.231