In order to maintain their legal status, booster clubs need to follow a particular set of rules and regulations. These booster club legalities vary from state to state, but there are a number of laws that must be followed everywhere. A few of the rules for running a booster club are enlisted below:
You should register your booster club as a non-profit organization with your state for you to fall under section 501(c) (3) of the Internal Revenue Code. Once all the documentation is filled and submitted to the IRS, registering as a non-profit allows you to be exempted from tax.
To abide by other booster club legalities, make sure to fill out the IRS Form available on the Internal Revenue Service website.
Applying for a Federal EIN (Employee Identification Number) is necessary as it is used by the government to identify any business activity within the United States.
Other than that, you can also fill out the form 8718 from the IRS, also called “User Fee for Exempt Organization Determination Letter Request.” As soon as you receive your determination letter, your club will be listed as a tax-exempt non-profit.
- Keeping your club organized and up to date
Although this isn’t a legal requirement, it would be in the best interest of the booster club to have a consistent way to keep track of any and all transactions and donations that happen throughout the club. Personal bank accounts within the club are not recommended at all. Instead, a single bank account for the club as a whole would be beneficial.
It is also advisable to have digital logging of the records than a manual one because it has become an inconvenient practice in today’s times.
- The Booster Club serves a public purpose.
In order to be able to fall under Section 501(c) (3) of the Internal Revenue Code, it is imperative for any organization to be serving a public purpose. Considering how booster clubs are usually meant to support students and schools with programs relating to music, drama, athletics and academics, it is not hard to get them in the creation. Yet, if the people in charge of the booster club receive direct benefits from its activity or if individual members are given more benefits because of their participation in the club, then the booster club can be penalized, losing its 501(c)(3) benefits.
Keeping a booster club running smoothly requires awareness to a few legalities and all the Laws around Booster Clubs. If you’re in good terms with the members and the other founders, then it shouldn’t be a problem at all!