Ralph,
We are in the process of getting 501(c)(3) exemption right now, but we created a Non-Profit Corporation first. You really have 2 practical choices when creating your team as an entity: (1) Non-Profit Corporation or (2) an Association. There are subtle differences, but we chose the non-profit route because we wanted to be an actual corporation completely separate from the school system. I have to tell you that the differences were too subtle for me to tell, but our team lawyer (a friend of my family) advised we go the Non-Profit corporation route, so we did. You apply for non-profit corp. status with your respective state and most have the forms and instructions online. I can give you a copy of our bylaws and articles of incorporation when I get them back from the lawyer. If you want to go the association route, then I think Chatsworth High School Team 22 has already successfully gotten their 501(c)(3) exemption as an association.
I am assuming you already downloaded IRS form 1023 (Application for recognition of exemption) and are plunking through the pages of instructions. But if not, then you can also get that from
www.irs.gov
We got 501(c)(3) exemption so the school system had no control over our funds. Our team mentors were paying thousands of dollars for items and waiting 8-12 weeks to get reimbursed from the school account and we decided it was better to control our own funds. We currently use our school system's 501(c)(3) exemption, but not for long.
I hope this helps,
Paul