Before Starting a Booster Club: Need, Approval, and Structure

Confirm the Need

A booster club is a permanent legal entity with annual filings, a bank account, and officers who carry fiduciary duties (the legal duty to manage someone else’s money with care and loyalty). It is worth creating when the program has ongoing needs that families can meet together. The founders answer these questions in writing:

1. What will the club pay for? Uniforms, instruments, travel, competition fees, equipment, awards, coaching clinics. A list of specific items makes the first budget and the 501(c)(3) application easier.
2. How much money is involved? A program that needs a few hundred dollars a year may be better served by an existing parent group. A program that runs concessions, travel, or large fundraisers usually needs its own club.
3. Who will serve as officers? The club needs at least three committed adults to start, and new ones every year or two.
4. Is the support ongoing? A one-time project (a single trip or a memorial) may fit an existing organization better than a new entity. See Alternatives to Forming a Booster Club.

Check for an Existing or Dormant Club

A program may have had a booster club in the past. A dormant club may still exist on paper with a state registration, an 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, a bank account, and an IRS record. Starting a second entity for the same program creates confusion for donors, the district, and the bank.

1. Ask the principal, athletic director, activities director, or program director whether a club exists or existed.
2. Search the state’s business entity database for the school name and program name.
3. Search the IRS Tax Exempt Organization Search (external site) tool for the school name. IRS Publication 557 notes that this tool includes the Auto-Revocation List of organizations that lost exemption for not filing.
4. Ask longtime parents and coaches about old bank accounts, records, or checkbooks.

If an old club exists, reviving it may be faster than starting over. If its exemption was automatically revoked, see Losing and Regaining 501(c)(3) Status.

Get School and District Approval

The booster club is legally independent, but it operates on school property, uses the school’s name, and supports school staff. The FCMAT student body accounting manual, written for California districts, states that school-connected organizations such as booster clubs are separate legal entities, and that their funds should not be deposited into or commingled with student body or district accounts.

Many districts have a written board policy or administrative regulation on booster clubs. The founders request a copy before drafting bylaws. Common district requirements include:

• Annual registration or recognition of the club
• Copies of bylaws, the IRS determination letter, and a certificate of insurance
• Annual or periodic financial reports to the principal
• Advance approval of fundraisers held on campus or in the school’s name
• Rules on use of the school name, mascot, and logo
• Rules on how gifts to the program are made (often through the district, which then decides how to use them)

The founders meet with the principal and the program’s staff lead (coach, band director, advisor). The meeting covers what the program needs, what the district requires, who on staff is the contact, and how purchases for the program will be approved. See Working With the School and District and School District Fundraising Policies.

Athletic booster clubs should also read Title IX and Booster Club Fundraising before promising support to one team.

Booster Club vs PTO vs Education Foundation

Parents often ask which kind of organization to form. The answer depends mostly on scope: one program, the whole school, or the whole district.

All three are separate legal entities from the school. A booster club makes sense when parents of one program want to fund that program directly. If an active PTO or other school-wide parent group already covers the school and is willing, a program committee inside that group can be an alternative.

Choose a Name

The legal name appears on the articles, the 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, the bank account, the IRS application, and every receipt. It should be the same everywhere.

1. Make it descriptive: school name, program, and “Booster Club” or “Boosters” (for example, “Lincoln High School Band Boosters”).
2. Check the state business entity database to confirm the name is available.
3. Get written permission from the district to use the school name, mascot, and logo if district policy requires it.
4. Avoid punctuation the IRS online EIN system may reject. The IRS notes that the business name entered must conform to its formatting rules.
5. Use the same spelling on every filing. A mismatch between the state record, the IRS record, and the bank account causes delays.

Recruit a Founding Board

The IRS requires an unincorporated association to have at least two members who signed its organizing document. State nonprofit corporation laws set their own minimums for directors, and Texas defines an unincorporated nonprofit association as three or more members. In practice, a booster club needs at least a president, secretary, and treasurer.

The founders avoid putting spouses or members of the same household in the roles that check each other, such as treasurer and the second bank signer. The IRS Form 1023 instructions include a sample conflict of interest policy, and the club should adopt one early. See Conflict of Interest Policy and Board Positions and Duties.

Rules That Apply From the First Meeting

• No money before the bank account. Until the club has an 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 and a bank account in its own name, it does not collect money.
• No individual student accounts. IRS Publication 526 states that a contribution earmarked for a specific person is not deductible, even when given through a qualified organization. Per-student credits also create private benefit that endangers 501(c)(3) status. See Private Benefit and Individual Fundraising Accounts.
• No mandatory fundraising. A payment a family must make so a child can participate is not a voluntary gift. IRS Publication 526 states that donors cannot deduct the part of a payment for which they receive a benefit, and tying fundraising to individual participation raises the same private benefitPrivate benefitA 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.All terms concern as student accounts. Some states and districts also restrict required fees for school activities. See Fundraising Rules.