Plainview ISD hosts legal briefing on booster clubs, fundraising and compliance

Ron Garcia, a school attorney with Underwood Law Firm, told booster club and parent-teacher organization members at a Plainview ISD presentation that booster organizations must operate as separate legal entities and follow state and federal rules covering nonprofit formation, fundraising, awards and reporting.

Garcia said the talk was “for educational purposes only” and urged attendees not to rely on the presentation as legal advice. He walked listeners through formation steps — incorporating as a nonprofit in Texas, obtaining an Employer Identification Number (EIN) via IRS Form SS-4, applying for federal tax-exempt status (Form 1023), and filing annual informational returns (Form 990 or 990‑EZ) — and warned that failing to file Form 990 for multiple years can result in loss of tax-exempt status and require reapplication to the IRS.

The presentation emphasized why separation from the district matters. Garcia said booster clubs and PTOs are typically “separate legal entit[ies]” and must maintain distinct finances, bank accounts and bylaws. He warned against using the school district’s EIN or having the district hold or control booster funds, because a booster that looks “commingled” with school operations can be treated as a public entity and become subject to public‑records or open‑meetings rules or other legal limits.

Garcia reviewed when and how the district may lawfully assist boosters: district assistance is more defensible when it (1) serves a public purpose parallel to the district’s functions, (2) delivers adequate public benefit for use of public resources, and (3) involves appropriate district oversight. He said the superintendent or a designee has authority to accept unsolicited gifts on the district’s behalf and that booster groups should notify campus administrators before soliciting donations or staging fundraisers.

On athletics and awards, Garcia flagged UIL rules that restrict certain gifts, payments and benefits to student athletes and coaches; he said booster funds must not be used in ways that violate the UIL amateur rule and that local administrators should review proposed awards, travel support and other expenditures to avoid sanctions. He cautioned that gifts or purchases that favor one program (for example, a large gift that benefits a boys’ team but not girls’ teams) can trigger Title IX scrutiny and potentially an Office for Civil Rights inquiry into equitable opportunities.

Garcia also covered fundraising mechanics and legal limits. He explained that charitable raffles in Texas are governed by the Texas Charitable Raffles Act (Occupations Code) and related rules: only qualifying nonprofit organizations may hold raffles, raffles are subject to limits (including a cap on prize value), and raffles that do not comply with the statutory scheme can be unlawful. He advised booster clubs not to raffle cash prizes, to confirm raffle eligibility before proceeding, and to avoid having the district administer or promote raffle ticket sales.

Other practical recommendations included adopting written bylaws and a conflicts‑of‑interest policy, keeping minutes and periodic financial statements, considering insurance coverage and audits where appropriate, and consulting accountants or attorneys when needed. Garcia closed by saying the presentation materials would be provided as a PDF to attendees and reiterated that the session was informational rather than legal advice.

The briefing was presented to booster club members and PTO representatives affiliated with Plainview ISD; no formal board action or vote occurred during the event.