Glossary
Terms of art used across the guide, each with a plain definition and the page that explains it in full. On guide pages, a term with a dotted underline opens its definition.
Terms starting with 0-9
- 50/50 raffle
- Also called: 50/50 drawing, 50/50
- A raffle in which the winner receives half of the ticket sales and the club keeps the other half, usually sold and drawn during one game or event. It is legally a raffle with a cash prize, so state raffle law applies.
- See: 50/50 raffles
- 501(c)(3)
- Federal recognition under section 501(c)(3) of the Internal Revenue Code that the club is organized and operated for charitable or educational purposes. It makes the club exempt from federal income tax and makes gifts to it tax-deductible.
- See: Getting 501(c)(3) status
Terms starting with A
- Articles of incorporation
- Also called: certificate of incorporation, certificate of formation
- The document the founders file with the state agency that registers corporations to create a nonprofit corporation. It carries the IRS-required purpose and dissolution clauses; some states call it a certificate of incorporation or certificate of formation.
- See: Incorporating the club
- ASB
- Also called: associated student body
- Associated 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.
- See: Working with the school
- Automatic revocation
- Also called: auto-revocation
- The loss of 501(c)(3) status that happens by law when a club fails to file its required Form 990-N, 990-EZ, or 990 for three consecutive years. It takes effect on the due date of the third missed filing, and the club must apply again to regain exemption.
- See: Revocation and reinstatement
Terms starting with B
- Bylaws
- The written rules a club adopts to govern itself: who its members are, which officers it has and how they are chosen, how meetings and votes work, how money is approved, and how the rules themselves change.
- See: Bylaws
Terms starting with C
- Charitable gaming
- Raffles, bingo, and other games of chance that state law allows a nonprofit to run to raise money, often under a state or local license with limits on prizes and on how proceeds are used. Whether a booster club may hold them varies by state.
- See: Are raffles legal
- Charitable solicitation registration
- Also called: charitable registration
- Registration with a state office, usually the attorney general or secretary of state, before asking the public for donations, typically renewed each year with a financial report. Whether it is required, and the thresholds and fees, vary by state.
- See: State registration
- Conflict of interest
- Also called: conflicts of interest
- A situation in which an officer, director, or committee member could benefit personally from a club decision. A conflict of interest policy requires the person to disclose it and step out of the decision.
- See: Conflict of interest
Terms starting with D
- Determination letter
- The IRS letter recognizing the club’s federal tax exemption under 501(c)(3). The club keeps it permanently and shows it to banks, donors, grantors, and the school district.
- See: Getting 501(c)(3) status
- Dual signatures
- Also called: dual signature, two signatures, dual control
- The control that requires two authorized officers, not related to each other and not living in the same household, to approve every check and electronic payment.
- See: Internal controls
Terms starting with E
- EIN
- Also called: Employer Identification Number
- Employer 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.
- See: Getting an EIN
- Ex officio
- Holding a seat because of another position, such as a principal, athletic director, or head coach named in the bylaws. Under Robert’s Rules of Order, an ex officio board member has full voting rights unless the bylaws make the seat non-voting.
- See: Article by article
- Executive session
- A portion of a meeting held in secret, with only board members and anyone the board invites present. Votes may be taken, and the proceedings are confidential.
- See: Board vs general meetings
Terms starting with F
- Fiduciary duty
- Also called: fiduciary duties
- The legal duty officers and directors owe to manage the club’s money carefully and in the club’s interest. It is usually described as three duties: care, loyalty, and obedience.
- See: Fiduciary duty
- Financial review
- An examination of the club’s books after the fiscal year ends by people who did not handle the money, either a committee of non-signers or an outside certified public accountant (CPA). It confirms that every receipt was deposited, every payment was authorized, and the balance matches the bank.
- See: Annual financial review
- Fiscal sponsor
- Also called: fiscal sponsorship
- An established 501(c)(3) organization that agrees to receive and manage charitable funds for a project that does not have its own exemption, usually under a written agreement and for a fee.
- See: Alternatives to forming
- Fiscal year
- The club’s 12-month accounting year, set in the bylaws. Many booster clubs use July 1 through June 30 to match the school year, and the club’s filing deadlines count from the day it ends.
- See: Closing the fiscal year
- Form 1023-EZ
- Also called: 1023-EZ
- The 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.
- See: Getting 501(c)(3) status
- Form 1099-K
- Also called: 1099-K
- The IRS information return a card processor, payment app, or online marketplace files to report the gross payments it processed for an account during the calendar year. Card payments and payment apps have different reporting thresholds.
- See: Online payments
- Form 1099-NEC
- Also called: 1099-NEC
- The IRS information return a club files and sends to a non-employee, such as a private coach or clinician, it paid for services once the year’s payments reach the reporting threshold. It covers the calendar year, whatever the club’s fiscal year.
- See: Paying coaches and contractors
- Form 990-EZ
- Also called: 990-EZ
- The short annual return a tax-exempt club files with the IRS when its gross receipts are under $200,000 and its total assets are under $500,000, and it does not file Form 990-N. It reports revenue, expenses, the balance sheet, programs, and officers.
- See: Filing Form 990-EZ
- Form 990-N
- Also called: 990-N, e-Postcard
- The e-Postcard: the annual electronic notice a tax-exempt club files with the IRS when its gross receipts are normally $50,000 or less. It is due the 15th day of the 5th month after the fiscal year ends.
- See: Filing Form 990-N
- Form 990-T
- Also called: 990-T
- The separate IRS return a tax-exempt club files to report unrelated business income and figure the tax on it. It is filed in addition to the club’s Form 990-N, 990-EZ, or 990.
- See: Unrelated business tax (UBIT)
- Form W-2G
- Also called: W-2G
- Certain Gambling Winnings: the information return a club files with the IRS and gives to the winner when a raffle or other gaming prize reaches the federal reporting threshold.
- See: Federal tax rules
Terms starting with G
- Gross receipts
- The total amounts the club receives from all sources during its fiscal year, without subtracting any costs or expenses. Gross receipts decide which Form 990 the club files.
- See: Which Form 990
- Group exemption
- An IRS ruling issued to a central organization that recognizes its affiliated subordinate organizations as tax-exempt, so each subordinate does not have to apply on its own.
- See: Alternatives to forming
Terms starting with I
- Internal controls
- The written rules a club follows so that no single person can receive, spend, or record the club’s money without someone else seeing it, such as two signatures on every payment and two people counting all cash.
- See: Internal controls
- Inurement
- Also called: private inurement
- Any 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.
- See: Private benefit
Terms starting with M
- Minutes
- The official record of what a meeting decided, not a transcript of what people said. The secretary takes them, the next meeting approves them, and the club keeps them permanently.
- See: Taking minutes
- Motion
- A formal proposal that the club take an action or a position. Under Robert’s Rules of Order, a motion is the only way a board or membership meeting makes a decision.
- See: Motions
- MOU
- Also called: memorandum of understanding
- Memorandum of understanding: the signed agreement between a booster club and the school or district that applies the district’s booster club rules to that club. Some districts call it a booster club agreement.
- See: District policies
Terms starting with N
- Nonprofit corporation
- A legal entity created by filing articles of incorporation with the state, separate from the parents who run it. It can open a bank account, sign contracts, and apply for 501(c)(3) status.
- See: Incorporating the club
Terms starting with P
- Parliamentary authority
- The book of meeting rules the bylaws adopt to cover anything the bylaws and state law do not, almost always Robert’s Rules of Order Newly Revised (RONR).
- See: Meetings
- Private benefit
- A benefit to private individuals that is more than incidental to the club’s charitable purpose. It applies to anyone, not only insiders, and it is why crediting fundraising to individual families endangers 501(c)(3) status.
- See: Private benefit
- Proxy voting
- Also called: proxy vote, proxy
- A member authorizing someone else to cast that member’s vote. Robert’s Rules of Order does not allow it unless the bylaws authorize it or the law requires it, and state law can change that default for incorporated clubs.
- See: Voting
Terms starting with Q
- Qualified sponsorship payment
- A payment from a business that expects no substantial return benefit, only acknowledgment of its name, logo, or product lines. It is not unrelated business income, unlike paid advertising.
- See: Sponsorship vs advertising
- Quid pro quo contribution
- Also called: quid pro quo
- A payment that is partly a gift and partly a purchase, such as an event ticket that includes dinner. When the payment is more than $75, the club must give the donor a written statement of the deductible amount.
- See: Donor acknowledgments
- Quorum
- The 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.
- See: Quorum
Terms starting with R
- Reconciliation
- Also called: bank reconciliation
- Matching the club’s books to the bank statement each month: the bank balance, plus deposits in transit, minus outstanding checks, equals the book balance. Someone other than a check signer reviews it.
- See: Treasurer's report
- Registered agent
- Also called: resident agent, statutory agent
- The person or company designated to receive lawsuits and official state notices for the corporation at a street address in the state. Some states call it a resident agent or statutory agent.
- See: Incorporating the club
- Reserve
- The money a club deliberately holds at the end of the fiscal year to pay early-season costs before fundraising starts, plus a cushion against a fundraiser that falls short. The board sets the target in a written reserve policy.
- See: Reserves and carryover
- Restricted funds
- Also called: restricted fund, restricted gift
- Money a donor or grantor gave for a stated purpose. The club tracks each restricted balance separately, reports it in the treasurer’s report, and spends it only on that purpose.
- See: Reserves and carryover
- Robert’s Rules of Order
- Also called: Robert’s Rules of Order Newly Revised, Robert’s Rules, RONR
- Robert’s Rules of Order Newly Revised (RONR), the rulebook most booster club bylaws adopt for running meetings. It governs a club only if the bylaws adopt it, and state law and the bylaws come first.
- See: Robert's Rules basics
Terms starting with S
- Sales tax exemption certificate
- Also called: exemption certificate
- A state form a qualifying organization gives a seller to buy without paying sales tax. Many states do not exempt nonprofit purchases, so whether a club can use one varies by state.
- See: Sales tax
- Segregation of duties
- Splitting each money task so that the person who handles the money is not the only person who records it or checks it. No single person handles a transaction from start to finish.
- See: Internal controls
- Standing rules
- A club’s administrative rules, adopted by an ordinary vote and changed the same way: dues amounts, reimbursement deadlines, meeting times, and other details that shift from year to year.
- See: Standing rules vs bylaws
Terms starting with T
- Title IX
- The 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.
- See: Title IX
Terms starting with U
- UBIT
- Also called: unrelated business income tax
- Unrelated business income tax: the federal tax a 501(c)(3) owes on net income from a business it regularly carries on that is not substantially related to its exempt purpose. Most volunteer-run booster club fundraising falls under an exception.
- See: Unrelated business tax (UBIT)
- Unincorporated association
- A group organized under a written constitution or articles of association without incorporating with the state. It is cheaper to form, but its legal status, including the liability of officers and members, depends heavily on state law.
- See: Incorporating the club
Terms starting with W
- Written acknowledgment
- Also called: contemporaneous written acknowledgment
- The receipt a donor needs from the club to deduct any single gift of $250 or more. It names the club, states the cash amount or describes a noncash gift, and says whether the donor received anything in return.
- See: Donor acknowledgments