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For new nonprofits
How to start a booster club
A booster club raises money to support a school team, band, or activity. Most become 501(c)(3) nonprofits so donations are deductible and the money is handled cleanly.
Booster clubs are simple to form but easy to get wrong on one IRS point: you cannot tie fundraising to individual families' accounts. Here is how to set one up and stay clean.
This is general information, not legal or tax advice. The private-benefit rule below is where clubs most often get into trouble.
Starting a booster club
| Legal structure | Usually a 501(c)(3) nonprofit corporation |
| Federal step | Form 1023-EZ ($275) fits most small clubs |
| The big rule | No individual fundraising accounts (private benefit) |
| Governance | A board separate from the school, with bylaws |
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.
Ember Spark
Ember Spark is a free, step-by-step checklist for starting a nonprofit, and each step explains why it matters. In Ember it drafts your bylaws, conflict-of-interest policy and Form 1023 narrative for you to finish, and puts your filing deadlines on Ember's compliance calendar. Turn on Ember Compliance and it emails you a reminder before each one. Unlimited users on every tier.
General information for people starting or running a nonprofit, not legal or tax advice. Rules change; confirm specifics with the IRS, your state, or a qualified professional.
Sources: IRS, charitable organizations · IRS, inurement / private benefit · councilofnonprofits.org. Verified August 2026.