Advice from PTO Today

Craig writes:
All of these numbers refer to sections of the federal internal revenue code. Section 501c3 is the section that covers public charities, and most PTOs that apply for tax-exemption become 501c3 organizations. Section 501c4 applies to social welfare organizations. 501c4 organizations must benefit the community as a whole. An example of a 501c4 might be an organization that maintains local hiking trails. 501c7 is for social and recreation clubs that are organized essentially to benefit their members rather than for some broader public purpose. 501c7s are typically supported by dues rather than fundraising. A key reason to choose 501c3 is that contributions to 501c3s are tax deductible, while contributions to 501c4 and 501c7 organizations are not. Being a 501c3 also opens you up to more grant possibilities. On the flip side, 501c4 and 501c7 organizations are allowed more freedom to participate in political activities.

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