Question: Handling Funds

How much money should be carried over from year to year? I have one opinion that we should carry over only what we need to for the few things we need to do at the beginning of the next year before we would have our fundraising monies. Then we have another opinion that we need to carry over enough money to cover all expenses for the next year. I personally feel the first opinion is best because you will have parents get very upset for not spending the money they help you raise when their child is there. what are some of your opinions?

Asked by Anonymous

Answers:

Advice from PTO Today

Craig writes:
First of all, there's nothing to prevent you legally from carrying over money from one year to the next -- even enough to cover an entire year's expenses. I know you didn't ask that, but it's a question that comes up fairly often -- whether nonprofits are allowed to carry over money, invest it in certificates of deposit, etc. The answer is yes. As far as how much to carry over, we recommend you keep at least enough to cover your early-year expenses. We feel it's important to start the year with a parent involvement activity. If your first communication to parents is about a fundraiser, that sends a wrong message about what your group is about (primarily fundraising rather than creating a supportive school community) and will limit your ability to build involvement. Carrying over a whole year's budget seems excessive to me. PTOs don't have the kind of fixed expenses that businesses do (rent, salaries, etc.), so if you have a cash shortfall, the risk is low. You simply adjust your activities to meet the current reality. And that doesn't necessarily mean doing less. Lots of groups accomplish a tremendous amount with a small budget and a lot of parent involvement.