School District Fundraising Policies and MOUs for Booster Clubs

Why Districts Regulate Booster Clubs

• The club uses the school’s identity. The school’s name, mascot, and colors carry the district’s reputation.
• The club operates on public property. Events, concessions, and sales happen in district facilities, under district liability.
• Gifts become public money. Once a club gives money or equipment to the school, it belongs to the district and is spent under district rules.
• The district carries Title IX responsibility. Booster spending on one team can put the district out of compliance. See Title IX and Booster Club Fundraising.
• Theft cases draw headlines. When a booster treasurer embezzles, families blame the school.

What District Policies Typically Cover

Policies vary widely. Some districts have a one-page procedure; others have detailed board policy, annual registration, and an MOU. Tennessee sets statewide minimums by statute, which makes it a useful example of what a thorough policy looks like.

The Tennessee requirements come from Tenn. Code Ann. 49-2-603 and 49-2-604, as summarized in the Comptroller’s Model Financial Policy for School Support Organizations (external site). Other states leave these choices to each district. Check the club’s state page and the district’s board policy manual.

Other common policy topics:

• Facility use. A facility use application, fees, custodial charges, and a certificate of insurance.
• Purchases for the school. Prior approval before the club buys equipment or services for a team or program, so the district can confirm safety, compatibility, and equity.
• Paying staff. Coaching stipends and payments to district employees routed through district payroll, not paid by the club directly. See Paying Coaches, Instructors, and Contractors.
• Student safety. Rules on students selling products, such as a ban on students selling door-to-door.
• Food sold during the school day. Federal competitive food standards (the “Smart Snacks” rules) apply to food sold to students on campus from midnight before until 30 minutes after the end of the official school day, and each state sets how many exempt fundraisers a school may hold. Alabama, for example, allows up to 30 one-day exempt fundraisers per school per year (Alabama State Department of Education (external site)).
• Volunteers. Registration and background checks for adults who work with students. See Risk Management for Booster Clubs.

Booster Money vs. Student Body Money

Schools hold student body or activity funds, often called ASB (associated student bodyASBAssociated student body: the school’s student body or activity funds, which the district controls and spends under district and state rules. Booster club money is private money of a separate nonprofit and stays completely separate from ASB funds.All terms) or student activity accounts. These are district funds: the district controls them, district staff handle them, and state and district rules govern how they are spent. Booster club funds are the private funds of a separate nonprofit, held in the club’s own bank account under the club’s own EIN (employer identification numberEINEmployer Identification Number: the nine-digit federal tax identification number the IRS assigns to the club. The club needs it to open a bank account, apply for 501(c)(3) status, and file its annual return.All terms).

The two must never mix.

1. The club does not deposit its money into a school activity account to “hold” it.
2. The school does not deposit school money into the club’s account.
3. No school employee holds, signs for, or keeps the club’s books.
4. When the club wants to fund something for the school, it chooses one of two routes, with district approval:
   • Pay the vendor directly. The club buys the item and donates it, or pays an approved vendor for a service. The club keeps control of the money until it is spent.
   • Give money to the school. The gift becomes district money. The district may honor the club’s stated purpose, but it controls the spending and applies its own rules, including Title IX review.

Districts often let teams or programs raise money that is then dedicated to that team. That money still counts in the district’s Title IXTitle IXThe federal law that bars sex discrimination in education programs that receive federal funds. In athletics it requires a school district to give boys’ and girls’ teams equivalent benefits, and what booster clubs pay for counts toward that.All terms review. Washington’s Office of Superintendent of Public Instruction, for example, tells districts that outside funding and donations “are acceptable, so long as they do not result in disparities,” and that a school that accepts a donation must correct any inequity it creates (Washington OSPI (external site)).

Typical MOU Contents

An MOU between a booster club and a district usually contains these sections:

1. Parties, purpose, and term. Usually one school year, renewed annually.
2. Club status. Legal name, EINEINEmployer Identification Number: the nine-digit federal tax identification number the IRS assigns to the club. The club needs it to open a bank account, apply for 501(c)(3) status, and file its annual return.All terms, 501(c)(3) determination letter, current officers, and bylaws on file with the school.
3. Independence. The club is a separate organization, is not an agent of the district, and cannot bind the district to contracts.
4. Use of name and marks. Permitted uses of the school name, mascot, and logo, and approval for merchandise.
5. Fundraising approval. The approval form, who signs it, and the deadline before each event.
6. Facilities. Which facilities, how to schedule them, fees, setup, and cleanup.
7. Financial controls. Separate bank account, two signers who are not school employees, an annual financial report to the principal, and access to records on request.
8. Gifts and purchases. Prior approval of purchases for the school, ownership of donated equipment, and how gifts are accepted.
9. Staff. No direct payments to district employees; any stipend goes through the district.
10. Title IX. The club shares planned spending by team, and the district may decline or redirect gifts to maintain equity.
11. Insurance. Liability coverage, limits, and whether the district must be named as an additional insured. See Booster Club Insurance.
12. Volunteers. District volunteer registration and background checks.
13. Termination and dissolution. How either side ends the agreement and where club assets go if the club dissolves.
14. Signatures. Club president and the principal or district designee.

Getting or Updating an MOU

1. Ask the principal or athletic director for the district’s booster policy, registration form, and MOU template.
2. If the district has no template, draft one using the list above and offer it to the principal.
3. Have the board review the draft against the bylaws and approve it by vote.
4. Negotiate open points (insurance limits, reporting format, approval deadlines) before the school year starts.
5. Sign, keep a copy in the club’s permanent records, and calendar every reporting deadline.
6. Review the MOU each spring with the incoming board.