Fundraising for School Clubs, Teams and Booster Clubs

This hub is part of the school fundraising guide. It is written for the adults who run student groups: coaches, club sponsors, activities directors, booster officers and the school bookkeeper who ends up holding the receipts. Most of what's here applies from middle school up. The high school and senior class guide covers class-level fundraising, and the guides at the bottom of this page go deeper on each kind of group.

Whose money is it?

Every dollar a student group raises ends up in one of three places, and each comes with its own rules. The name of the group doesn't decide it. A "band booster club" may be a separate nonprofit, or it may just be the parents who help the band director spend the band's school account.

How school activity accounts work

Most clubs and teams that a school sponsors don't have a bank account of their own. Their money sits in a school-held account, often one ledger line among dozens in the school's activity fund, and the district sets the rules for putting money in and taking it out. The names differ by state and district, but the pattern is consistent: money goes to the office, the office deposits it, and spending needs more than one approval.

California spells this out in law. Under Education Code section 48933, every expenditure from a student body organization's funds needs three approvals: an employee or official the district's governing board designates, the certificated employee who advises the organization, and a representative of the student organization itself. The same section lists where those funds may be held, starting with federally insured bank deposits, with the board's approval. Other states leave the details to district manuals, so ask your bookkeeper for yours.

What that means for a sponsor or coach in practice:

• Turn money in the same day, counted and signed for by two people. Cash doesn't go home in a coach's bag. The cash handling guide and the free cash count sheet work for school accounts too.
• Buy through the school's process. Purchase orders or approved reimbursements, with receipts. A sponsor who pays a vendor personally and asks to be repaid later may wait or not be repaid at all.
• Expect students to have a say. Where student government or club officers approve spending, it's part of the lesson, not a formality.
• Ask what happens to leftover money. Districts decide whether a balance carries over to next year's club and what happens if a club stops meeting. Get the district manual's answer in writing and keep it with the club's records, so a sponsor who inherits the club two years later isn't surprised to find the balance has moved to the general student body account or been closed out.

The trade-off is speed for safety. A school account is slower to spend from, but the club gets the district's bank, audit and insurance, with no separate tax filings for volunteers to manage.

When a booster club is the right home

A booster club is an outside organization formed by parents and supporters to back one program, such as football, band or theater. It is not the school, and it doesn't share the school's tax status, bank account or rules. It needs its own bylaws, officers, tax ID and bank account, and often its own state registration and tax exemption. It still needs the principal's approval to use the school's name, students or buildings.

Many districts draw that line sharply. Miami-Dade County Public Schools, for example, requires a booster club to open a separate bank account in its own name and file for its own tax ID number, says booster money "must not be commingled" with the school's internal funds, requires principal approval of the club's bylaws and of every activity, and says the faculty advisor or coach "must not handle booster club funds." That last rule protects the coach as much as the club.

A booster club makes sense when a program's costs are large and recurring (uniforms, instruments, travel, a stadium sound system), when parents want to run events away from school property, or when the program needs to raise money in summer, when the school office may be closed. A small club with modest costs is usually better off with its school account. When the cost is equipment, who owns donated sports equipment explains how purchases reach the school.

Pooled funds, not individual student accounts

This is the rule student groups break most often, usually with good intentions. A team needs $600 per player for a tournament trip, so each family's fundraising is credited to that player's balance. It feels fair, and it is the setup most likely to cost a tax-exempt booster club its exemption. The same habit shows up as "student accounts," "player credits," "fundraising points" or scrip rebates applied to one family's fees. The label doesn't matter; what matters is whether the money a family raises comes back to that family.

Why the IRS objects: private benefit

A 501(c)(3) organization has to operate for its exempt purpose, such as supporting a school program, and not for the private interests of particular people. When each family's fundraising pays down that family's own bill, the club's income (and the gifts of the relatives and neighbors who bought from that family) ends up serving the families who sold the most rather than the program. The IRS calls that private benefit. And because the families in a member-run club can count as insiders, it can also be inurement, which the tax code bars outright.

There is a donor problem too. IRS Publication 526 says you can't deduct contributions to specific individuals, and that includes gifts earmarked for a particular person even when they pass through a qualified organization. A grandparent who writes a check "for Maya's trip" hasn't made a deductible gift to the club, whatever the receipt says.

The case: Capital Gymnastics Booster Club (Tax Court, 2013)

In Capital Gymnastics Booster Club v. Commissioner (T.C. Memo. 2013-193), a gymnastics booster club credited each participating family with points in proportion to the profit that family's fundraising produced, and the points paid down that family's own competition assessment. The Tax Court upheld the IRS's revocation of the club's exemption, finding that the arrangement gave substantial private inurement and private benefit to the families who raised the money rather than serving the club's athletes generally.

The IRS has relied on the case since. In a determination letter revoking another booster club's exemption (released in 2023), it said an exempt organization may not keep individual accounts earmarked for a particular person, said fundraising should benefit the whole organization whether or not a member takes part, and noted that the club offered no scholarships or need-based help for families who couldn't pay. Determination letters aren't precedent for anyone else, but they show how the IRS reads these setups.

What pooling looks like

Pooling means the group raises money for the program, and every member gets the same benefit from it.

• One budget for the whole group. Total season or trip cost, the fundraising goal, and the fee each member owes after fundraising is applied equally.
• Fundraising lowers everyone's cost by the same amount, or pays for things every member uses: buses, entry fees, team uniforms, equipment.
• No per-family balances. Families get a fee notice, not a statement showing what they raised against what they owe.
• Track sales for recognition only. Thank top sellers by name, or give a small prize the budget sets aside in advance. The money doesn't follow them.
• Write it down. Put the pooling rule in the bylaws or club policy and in the season letter to families, so new officers don't drift back to credits.

Example A team of 24 players needs a $600 trip for each player, or $14,400 in all. The team raises $9,600 together. Pooled, that is $400 off every player's cost, so each family owes $200. Under individual accounts, a player whose family raised $600 would owe nothing while a teammate whose family raised nothing would owe the full $600. The pooled version is the one an exempt club can defend.

Helping families who can't pay

Pooling doesn't mean every family must pay the same no matter what. A club can set part of what it raises aside for families who need help, as long as the help follows a written policy and need, not who sold the most.

• Set the amount in the budget up front, before anyone knows which families will ask.
• Write simple criteria and a private way to ask: a note to the sponsor or treasurer, with no proof required beyond what the board agrees on.
• Keep decisions away from interested parents. An officer whose own child would benefit steps out of that decision.
• Keep it confidential. Help shows up as a lower fee on the family's notice, not as a list read at a meeting.

Example The same team holds back $1,200 of its $9,600 as a need fund and pools the other $8,400. That is $350 off every player's cost, so each family owes $250, and the need fund can cover the full $250 for four families and part of a fifth.

School activity accounts follow similar thinking for a different reason: the money belongs to the school, on behalf of the group, and many districts already have fee-waiver or trip policies that say no student is left out because of cost. Ask your bookkeeper for that policy before building your own.

Approvals, step by step

Every district handles approvals its own way, but the sequence below fits most of them. For a deeper walk-through of who signs what, see district rules and fundraiser approval.

1. Agree on the purpose and the path

   Write one sentence on what the money is for and which account will hold it. If a booster club and a school account are both involved, decide now which one receives the money.

2. Get the sponsor's or coach's sign-off

   The adult responsible for the group confirms the dates work with practices, games and competitions.

3. Submit the district's request

   Most districts want a form filed with the principal or activities director before anything is advertised, and many set a minimum lead time. Find out yours before you pick a date.

4. Check the activity's own rules

   Food sold to students during the school day falls under federal Smart Snacks rules and your state's limits on exempt fundraisers; see the state food-sale table. Raffles and 50/50 drawings are regulated by state law, often with a license, and some districts don't allow them on school grounds at all, so ask the principal and your state's charitable gaming regulator before planning one.

5. Book the space and the calendar date

   Facilities requests and the school's master fundraising calendar are often separate. Do both.

6. Plan the money handling

   Name the two people who will count, where the money goes that night and who deposits it.

Copy and adapt this request for your sponsor or principal:

The profit calculator gives you the expected net to put on the form, and the fundraising calendar maker helps an activities director lay every group's fundraisers out on one year so teams aren't asking the same families in the same week.

Fundraisers that suit student groups

Student groups have something parent groups don't: members who can do real work and an audience that already shows up to watch them. The best fundraisers use both.

High school club fundraising ideas

High school clubs can run fundraisers that younger students can't: students can plan the event, staff it, handle the publicity and make the ask to a business owner, with an adult present. The ideas that work best put a club's own skill or audience to use, so the money comes from something only that club can offer.

• Sell what the club knows. A robotics demo night, a debate club's public debate on a school issue with audience ballots, an art club's commission day, a language club's cooking night. A skill-based event is easy to explain and rarely competes with another group's sale.
• Run one event for the whole school. A trivia night, a faculty-versus-students game, a powder puff game or a battle of the bands brings in ticket and concession money in one evening. Book the space and the custodian first; the date is the hard part.
• Teach younger kids. A Saturday clinic or a summer half-day camp for elementary students pays well when a club has a skill parents want, such as cheer, robotics or chess. Expect waivers, a set adult-to-child ratio and district approval for the use of the building.
• Ask businesses for sponsorship, not donations. Two student officers and an adult, a one-page budget, and a clear list of what the sponsor gets. The sponsorship letter templates help with the follow-up.
• Work for donations. A car wash, yard cleanup or a babysitting night for parents during a school event. Some districts restrict car washes because of traffic and storm-drain rules, so ask first.
• Team up. Three small clubs can share one well-run event instead of holding three thin ones. Agree in writing, before the event, how costs and proceeds are split between their accounts.

Two habits keep any of these from going wrong: get the event on the school's master calendar before announcing it, and remember that food sold to students during the school day falls under the Smart Snacks rules, while an evening event usually doesn't.

A pledge event deserves a special mention for teams, because it turns the thing they already do into the fundraiser. See the sports team walk-a-thon guide, the team and booster club jog-a-thon guide and the sports team fun run guide. For local businesses, use the sponsorship letter templates, and keep an adult with students on every visit.

Guides by club and team

Each guide covers the costs that group typically faces, the fundraisers that suit it and the money questions it runs into most.

• Athletic teamsConcessions, travel costs, equipment and game-day fundraisers.
• Cheer and dance teamsCompetition fees, uniforms, camps and showcases.
• Band and orchestraInstruments, uniforms, trips and concert-season ideas.
• Yearbook and student mediaAd sales, senior ads and printing costs.
• Robotics and STEM clubsRegistration, parts, travel and sponsors.
• Academic and debate teamsTournament fees, travel and brain-powered fundraisers.
• Student councilDances, spirit weeks and running school-wide fundraisers.
• Service and honor clubsService fundraisers, drives and giving to a cause.

Sources

1. Publication 526: Charitable Contributions (2025), Internal Revenue Service (accessed 2026-10-30)
2. IRS letter 202334016 (revocation; individual accounts), Internal Revenue Service (accessed 2026-10-27)
3. California Education Code section 48933: Student body organization funds, State of California (statute text as published by California Public Law) (accessed 2026-10-30)
4. Booster Club Guidelines (August 2023), with Manual of Internal Fund Accounting, Chapter 12, Miami-Dade County Public Schools (accessed 2026-10-30)