Union Public School District may change the structure of its many booster clubs after learning of a rule that requires fundraising efforts for schools to be carried out by a nonprofit organization.
In a Union School Board meeting Thursday, Superintendent Tyler Hansford said both he and Business Manager Abby Winstead been told about the rule in recent training classes.
“We’ve been to several meetings here lately, and in her trainings she’s learned that our booster clubs that are conducting fundraising in our name should have 501(c)3 status,” he said. “To my knowledge, only one of them currently does, and that’s the foundation.”
According to the Office of the State Auditor, “Any fundraising must be approved by the school board and must be on behalf of or in conjunction with a tax exempt charitable organization.”
Obtaining 501(c)3 status is an expensive endeavor, Hansford said, costing up to $1,600 with strict accounting and reporting requirements. For the district’s larger booster clubs such as the touchdown club, that wouldn’t be an insurmountable cost; however, he said many of the smaller clubs may not have the resources to become nonprofits.
“There’s just a worry for those smaller organizations,” he said. “I’m very mindful of the fact that we definitely need our booster organizations and our kids wouldn’t have the things they do without our booster clubs.”
One possible solution, Hansford said, would be to combine the booster clubs under one umbrella 501(c)3 organization. UPSD booster clubs were previously combined into one organization, but the separation of funding for the different activities and sports did not work. To avoid repeating the same mistake, he said he and Winstead would recommend each club have its own account.”
“It is possible to have multiple bank accounts under one big organization that attains the 501(c)3 status,” he said. “They all pool their funds to get that, and then under that umbrella they operate with smaller umbrellas as individual booster clubs.”
If the booster clubs move toward an umbrella organization, Winstead said she would recommend they hire an outside CPA firm to manage the individual funds. A CPA firm would have the skills needed to maintain the accounting records required for 501(c)3 status for multiple funds, and by bringing in a third party, the booster clubs could avoid any appearance of favoritism.
Board Attorney Doug Smith also recommended creating a board for the nonprofit organization with a representative from each of the booster clubs serving as members. That way, he said, each club has equal representation.
Hansford said Union Public School District is grateful for the support of its booster clubs, and no one in the district wants to cause the clubs trouble. Moving to 501(c)3 status is a legal requirement that has to happen; however the district wants to work with the clubs to make the transition as painless as possible for all involved.
“I don’t think there’s any question that it has to happen,” he said. “I think the question is how can we do it in a way that softens the blow to them as much as possible.”
School districts have until the end of the 2022 school year to move booster clubs to nonprofit status, Hansford said, so there isn’t a big rush. He said the district would be working with the clubs in the coming months to figure out how best to make the change.
