Why go 501(c)(3)?
You do not have to, but most booster clubs do. It makes gifts tax-deductible, opens grants and sponsorships, and keeps the money separate from the school's books with its own accountability.
Forming it
Same path as any nonprofit: incorporate, get an EIN, adopt bylaws, and file with the IRS. Most small clubs qualify for the shorter Form 1023-EZ. Our how-to-start guide and state guides cover it.
The rule that trips booster clubs up
This is the one to get right. The IRS prohibits individual fundraising accounts, crediting a family based on how much they personally raised or sold, and applying it to their child's fees. That is private benefit, and it can cost the club its tax-exempt status. Fundraising has to benefit the group as a whole, not buy down specific families' costs in proportion to their effort.
Governance and money
Run it like a real nonprofit: a board separate from the school district, bylaws, and a treasurer. Keep a dedicated bank account, require two signatures on large expenses, and give receipts. Clean books protect the volunteers and the club.