Booster Club 101 A training for Booster Clubs and Parent Groups

We Appreciate You

Why Training Requirements?

1. Requested by coaches and parents2. Avoid uncomfortable situation due to lack of knowledge3. Support for both programs/groups4. Protection for both parties

Purpose of Booster Clubs

1. We are all here for the success of our children.

2. Extra-curricular activities allow students to participate in programs they truly enjoy.

3. Participation aids in prevention of drugs, dropping out, etc.

Why Booster Club training?• “Although Texas ranks as the number-one

state for having its school districts misrepresented in fundraising schemes, neither size nor climate zone determines which districts are most apt to become targets. It's all about the money.”(Fundraisingforsports.com, 8/2006)

• Knowing this, we must be cognizant and avoid these pitfalls.

Why Booster Club Training?

• Often, a friend nominates another friend to share the joy of being a booster club officer. Many times individuals enter the roles without expectations of the legal requirements to fulfill the roles.

• Training is designed to better educate those of you who obtained a leadership role in the booster club.

Role of Competition• UIL Booster Club Guidelines begin with a

statement regarding competition, “Participation teaches that it is a privilege and an honor to represent one’s school. Students learn to win without boasting and lose without bitterness.”

• In light of this mission statement, we as educators and you as parents must support the programs at all times whether winning or losing.

Purpose of Booster Clubs• In the Lewisville Independent School District,

we encourage the involvement of parents in the education of their children. Parents can be involved through participation in voluntary parent organizations such as Booster Clubs.

• Booster Clubs should be organized to help promote, support, and improve the extra-curricular activities of the schools.

• The fund raising role of booster clubs is particularly crucial in today’s economic climate.

Purpose of Booster Clubs

• Booster clubs must always work collaboratively with the head coach or lead sponsor in the organization.

• Booster clubs support the goals of the particular program or organization.

• Booster clubs are not independent operations.

Forming a New Booster Club

Forming a Booster Club

• Must obtain written approval from the School Principal.

• Must be formed as a non profit charity with the purpose as defined in the Internal Revenue Code section 501(c)3. This is the only way to be recognized as an exempt charity.

Forming a Booster Club

Annual budgets must be formulated and approved by the membership, setting forth the fund raising projects and the purpose for which the funds will be expended.

Forming a Booster Club

• Get a sales and use tax permit. Booster Clubs are required to pay state sales tax when purchasing taxable items and to collect sales tax when selling taxable items subject to certain exemptions. Apply to the State Comptroller of Public Accounts requesting issuance of a sales tax number to be exempt.

Forming a Booster Club• It is recommended that Booster Clubs have

proof of liability insurance in place. (approximately $300 a year) Protects executive board and club.

• Obtain a post office box/permanent mailing address.

• All checks require two officer signatures – typically the Treasurer and President.

Forming a Booster Club

• A checks and balance system must be in place during fund raising. Reconciliation statements must be used individually and with whole groups.

• Students should not be selling pass cards door to door.

• Begin submitting timely audited financials yearly.

Booster Club Forms

• Budget• Annual Report• Fund Raising Application• Contribution Acknowledgment Form• Certificate• Audit Report• Statement of Purpose

• Link to forms - http://www.lisd.net/apps/pages/index.jsp?uREC_ID=129237&type=d&pREC_ID=481548

IRS/State Information

IRS and State Processes• Once you are properly set up, you must maintain

good standing with the State of Texas and the Federal Government. You must file your Sales and Use Tax reports as well as your IRS Form 990’s.

• You must also have an internal yearly audit. The Audit Report and the Financial Report must be turned in to the Principal by September 1st of each year.

• You may also want to refer to the Booster Club Checklist.

Audit Committee

• LISD requires each club to establish an audit committee to conduct an annual review of the Financial Report. The treasurer cannot be on this committee. The audit committee must prepare a written Audit Committee Report that communicates the results of the audit to the members at the next regular meeting. See Business Operating Guidelines for Booster Clubs. Link provided on athletic website.

Irregularities in Audit

• Contact the treasurer for additional records or information.

• Contact the President if matter cannot be settled to the committee’s satisfaction; and

• Contact the Principal for further assistance.

IRS and State Processes

• Obtain an EIN: Complete form SS-4 or complete form SS-4 online. www.irs.gov (no fee) LISD’s Employer Identification Number should never be used for any purpose.

• With an EIN and bylaws, you may open a bank account.

• Obtain a State Sales and Use Tax Permit. Form AP-201.http://www.window.state.tx.us/taxinfo/taxforms/ap-201.pdf (no fee)

IRS and State Processes• Contact the Secretary of State in order to become incorporated.

This step is strongly recommended. Complete form 202. http://www.sos.state.tx.us/corp/forms/202_boc.pdf ($25 fee)

• If you desire, complete Form 1023 in order to be recognized as an exempt organization. http://www.irs.gov/pub/irs-pdf/f1023.pdf Also complete the user fee, Form 8718/501(c)(3). ($400 - $850 fee)

• Contact the State Comptrollers Office Exempt Organizations Department in order to be recognized as exempt with the State. (no fee)

UIL Requirements

UIL Guidelines for Roles of Booster Clubs

Booster Clubs should develop and annually review policies to cover the following:o how to obtain administrative approval before beginning projectso how to plan and publicize meetings;o bookkeeping and fund administration including process to obtain

superintendent’s approval prior to raising or spending funds;o election of officers;o taking, distributing and filing minutes;o public communication;o proper interaction with fine arts directors and academic and athletic coaches;o a sportsmanship code governing behavior of booster club members and fans at

contests, treatment of officials, guests, judges, etc.;o plans to support the school regardless of success in competition, keeping the

educational goals of competition at the forefront of all policies.

Authoritative Guidelines

Authoritative Guidelines

• Booster Clubs and Parent Groups represent the school they support. It is necessary to follow the guidelines set forth in federal and state law as well as UIL and district guidelines.

• Training is done to protect our parents, patrons, and most importantly, our students. All laws and district policies must be followed.

Authoritative Guidelines• Booster Clubs are governed by various

entities. The School District has Board Policies and guidelines that Booster Clubs must follow (Board Policy GE Local). Also, the Booster Clubs must follow the guidelines of the University Interscholastic League (UIL), the State of Texas, and the Federal Government, through the Internal Revenue Service (IRS). Some state regulations relate to state sales tax while other regulations involve becoming incorporated or involve the holding of a raffle.

Authoritative Guidelines

• The UIL Booster Club Guidelines do not necessarily include all rules that may apply to your organization. For specific questions, you should contact the UIL directly.

Authoritative Guidelines

• Board Policy GE Local:http://pol.tasb.org/Policy/Search/384?filter=ge%20local• UIL Guidelines: http://www.uiltexas.org/policy/booster-club-guidelines• Lewisville ISD’s Booster Club Guidelines:http://www.lisd.net/pdf/business/Booster_Club_forms/Booster_Club_Guidelines_with_forms.pdf

Authoritative GuidelinesThe required federal regulatory information discussed does not include all laws or rules that may apply to your particular situation. This information is provided by the District’s Internal Audit Department; however, Internal Audit is not an authority on specific accounting situations or tax-related issues concerning individual Booster Clubs. Therefore, Booster Clubs should obtain competent independent counsel, such as a Certified Public Accountant (CPA) or an attorney, to address accounting and tax matters related to their specific circumstances. The cost of these services would be the Booster Club’s responsibility. In addition, the IRS and the Texas State Comptroller’s Office may be contacted for questions related to your organization’s specific situation.

Authoritative Guidelines Booster Club officers are solely responsible for

ensuring that their Booster Club is in compliance with all federal regulations. The most important regulation is the duty to comply and the duty to report. Therefore, the District is not responsible for a Booster Club not being in good standing with all federal agencies. However, the District has provided the following information that includes steps Booster Clubs should take to comply with federal tax regulations.

Required Forms to Principal

Required Forms Submitted To Principal• Booster Club/Organization Statement of

Purpose• Booster Club/Organization Budget• Booster Club/Organization Annual Report• Permission to Collect Funds Form• Contribution Acknowledgement Form-

Principal must submit to the Distribution Center Manager for approval of donated items if $1,000, but less than $50,000. Contributions of $50,000 or greater require Board approval.

Required Forms Submitted To Principal

• Certificate – Treasurer must complete a Certificate which is submitted to the Accounting Department. Accounting uses the Certificate to determine if the materiality requirements are met.

• Audit Report• Campus Based Improvements – Must submit to

Executive Director of Facility Services. Improvements greater than $50,000 require Board approval.

LISD Special Information

Important Note:

• During any kind of fund raiser, coaches should never collect the money. Booster club members should always run the fund raiser including the collection of funds.

• It is the recommendation of the school district that individuals not hold debit cards. This includes the coaches or sponsors who represent the group Booster Club is supporting.

Special Notes:• LISD forbids any student, regardless of grade,

from participating in door to door sales.• Per the IRS – Booster Clubs cannot require

that members participate in a fund-raiser nor require that each member raise a certain amount. In addition, the IRS stipulates that a member who does not participate in a fund-raiser would be entitled to the same benefits as those members who did participate.

Special Note: • Booster clubs cannot give anything to

students, including awards. The school principal must give prior approval for any banquet or get-together given for students.

• Unlike music and academic booster clubs, athletic booster club funds shall not be used to support athletic camps, clinics, private instruction or any activity outside of the school (See UIL Link).

Special Note:

• Booster groups or individuals may donate money or merchandise to the school with prior approval from the principal. These kinds of donations are often made to cover the cost of commercial transportation and to cover costs of out-of-town meals. It would be a violation for booster groups or individuals to pay for such costs directly.

Special Note: Music Boosters

• Many music groups schedule educational field trips with the approval of the School Board and building principal. Principals are required to monitor the number of days used for UIL absences. For these trips, specific educational components must be included such as performing for a music festival, an adjudicated contest or a concert tour. Marching performances such as the Macy’s Thanksgiving Day Parade or other similar ceremonial appearances also qualify.

Special Note: Music Boosters

• However, educational components need not be limited to performances. Concert attendance, visiting university/conservatory music facilities and other music related non-performing opportunities would be appropriate if approved by the Board.

References

Reference List• Internal Revenue Service-Non Profit Section

1-877-829-5500• Texas State Comptrollers Office-Exempt

Organizations 1-800-252-5555• University Interscholastic League 1-512-471-

5883• Texas Secretary of State 1-512-463-5555• Texas Attorney General www.oag.state.tx.us

Houston Office 1-713-223-5886• LISD’s Business Operating Procedures

District Contacts

• Tim Ford (Athletics) 469-713-5209• Jan Lowrey (Athletics) 469-713-5209• Cristie Liles (Athletics, Cheer) 469-713-5209• Bill Watson (F. Arts, Drill Team) 972-350-4715• Rhonda Godbey (West Zone) 972-350-4737