Question: Kindergarten Supply Fund

Our Kindergarten teacher team writes a welcome to school letter that includes requesting a $40 school supply fee in lieu of having parents purchase school supplies for their student. The Kinder team has checks made out to our PTO and then spends the money on what the Kinder team decides on submitting reimbursement requests and receipts. In the past two years that I have been treasurer, I haven't seen any purchases that is not for the kids in some fashion. However, I have seen not all of the funds used during that year. I have four questions. First, is this IRS legal for a 501(c)3? Second, as a fundraising organization, can we require parent's to pay a fee for this grade level? Third, according to our by-laws the PTO decides on how money is spent. This therefore does not sound like we are following our own by-laws, does it? Fourth and finally, if the money is not spent by the Kinder team during the year, should the money go into the general PTO fund for the PTO to use or should it carry over year to year for the Kinder Team to spend on the next year's Kinder group?

Asked by grasslandgirl

Answers:

Advice from PTO Today

Rose H writes:
Ok, let’s go through your list! 1-It is legal for a 501c(3) parent group to accept the parent donations and reimburse the teachers for materials purchased. Also, it is legal to carry over funds if not all funds are spent during the current school year. 2-Regarding a request for fees, it is more common for parent groups to request a donation. When you get into the topic of “fees,’’ it can be more tricky because it can vary by community as to what is acceptable. 3-On the by-laws, it sounds like the financial setup doesn’t appear to violate any by-laws you referenced. It's a little bit of a risk for the Kinder team because the money belongs to the PTO and they can choose to use it however your group would like. Also, it sounds like your group has traditionally budgeted all of the money to go back to the Kinder team (whether the process is formal or not), but you don't have to. So, as long as the Kinder team is submitting receipts and asking for reimbursement, it doesn't seem like this system violates the bylaws. 4. Leftover funds should be treated like any other funds in any other budget area -- the money becomes part of the general fund. To this point, it looks like your group has reallocated the money back to the Kinder program for the following year, which is fine and makes sense. But keep in mind you do not have to do that. Hope this helps!