a) Guidelines and Policies
Booster Clubs should carefully consider limiting the number of major fund-raising activities involving students. All such activities require both the approval of the Sponsor and School Principal.
1) For the fund-raisers planned for the current school year, please submit a list to the Principal by September 15th. On this list, please include the following information:
Purpose of the fundraiser
Type of fund-raising activity (i.e. candy sale, car wash, BBQ, etc.)
Date(s), Time(s), and place(s) of the activity
Name of the sponsoring organization
Name and phone number of person(s) in charge of the fund-raiser
Name and phone number of the person handling the money for the fund-raiser.
Please note that sending a list of the fund-raisers does not constitute an application for approval of the fundraisers and the Principal's acceptance of the list does not indicate approval of these activities.
2) Thirty days prior to the event, the Fundraising Activity Permission Request for Parent Organizations must be submitted to the Principal (or designee) for approval. If the type of fund-raiser changes, please submit a revised or new Pemission Request to the Principal or designee for approval.
b) IRS Regulations
The IRS prohibits tax-exempt organizations from requiring people to participate in fund-raisers. Likewise, Booster Clubs may not require an amount be “donated” in lieu of participating in a fund-raiser. People may choose whether or not to participate in a fund-raiser and may choose whether or not to donate to the Booster Club.
Furthermore, if a person decides not to participate, that person cannot be excluded from having the opportunity to benefit from the fund-raiser and cannot be penalized in any way for choosing not to participate in the fund-raiser. Furthermore, benefits given by a tax-exempt organization cannot be based on participation in a fund-raiser or based on revenues raised individually. Therefore, regardless if a person participates in a fund-raiser and regardless of the amount of revenue raised, that person cannot be denied the opportunity to receive an equal benefit.
High Spirit Booster Club is having a car wash fund-raiser to help reduce the cost of a trip to Florida for a competition. The cost of the trip is $20,000 for 20 people. Therefore, each person’s cost for the trip before the fund-raiser is $1,000.
Of the 20 people participating in the trip, only 10 people participate in the fund-raiser and raise a total of $600.
The $600 must be split equally among the 20 people going on the trip, even though only 10 people participated in the fund-raiser. Therefore, each person receives a benefit of $30 ($600/20). Now, each person’s cost for the trip is $970 ($1,000 - $30).
The IRS prohibits the use of individual accounts by Booster Clubs. Booster Clubs must benefit the group as a whole, not its individual members. (See example above.)
"Individual accounts" are those accounts used by a Booster Club to credit an individual with revenues raised. The Booster Clubs would use these accounts to benefit the individual by offsetting that individual's expenses with the amount credited to the individual from the revenues raised.
c) Accounting for a Fund-Raiser
Within a week of the projected end date of the fund-raiser, complete the Operating Report and the attachment A, B, or C. Submit the Operating Report and applicable attachment to the Treasurer. The Treasurer should verify the information provided on the forms.
d) Analysis of Fund-Raiser
Parent Organizations should use the Operating Report and applicable attachment to determine if the fund-raiser was a success or failure. This type of analysis will help a Parent Organization decide whether or not to repeat a particular fundraiser.
e) Use of Funds Raised
According to the Internal Review Service (IRS), review your application for recognition of exemption (Form 1023) to determine how funds raised or contributions received by a booster club may be used. This document indicates how the organization had intended to use the funds and the IRS granted the organization their public 501(c)(3) tax-exempt status based on this information. Funds may be used for those purposes indicated in the Form 1023 document.
If funds are used for purposes not indicated in the Form 1023 document, the IRS may question whether the organization should continue as a public 501(c)(3) organization.
The District recommends contacting the IRS before expending the funds if a question exists as to whether it falls under the use of funds approved by the IRS. Because the application for recognition of exemption may be written differently from one booster club to another, one booster club may expend funds for certain items; whereas, another booster club may not be able to expend funds for the same items.
The funds raised or donations received by the Booster Club may not be used for the following purposes: