What Booster Club Bylaws Must Include: IRS and State Rules

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.

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.

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-EZForm 1023-EZThe short online IRS application for 501(c)(3) status. Only organizations that pass its eligibility worksheet may use it, which includes gross receipts of $50,000 or less (past and projected) and total assets of $250,000 or less.All terms 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-EZForm 1023-EZThe short online IRS application for 501(c)(3) status. Only organizations that pass its eligibility worksheet may use it, which includes gross receipts of $50,000 or less (past and projected) and total assets of $250,000 or less.All terms 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.

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.

InurementInurementAny part of the club’s net earnings benefiting an insider, meaning a person with influence over the club, such as a member, officer, or director. A 501(c)(3) may not allow it in any amount.All terms 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.

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 quorumQuorumThe minimum number of voting members who must be present for a meeting to conduct business. The bylaws set the number, and without a quorum the meeting cannot make a binding decision.All terms, required officers, and members. The rules vary by state. Four examples:

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.