Advice from PTO Today

Craig writes:
Dividing all your funds by grade level is extremely limiting and can result in some real management challenges. Worst case is you end up running lots of extra fundraisers because the needs for each grade are not equal every year and although you may have raised enough money, it's in the wrong account (if only on paper). You also may end up with arguments about who should pay how much for what, especially on items that aren't straightforward about which grade benefits the most. And you may even end up with fights about who controls the money--the PTO as a whole or just parents/teachers with children in a specific grade.

One compromise that some groups use is to place a percentage of the money collected in any one fundraiser in dedicated (paper or actual) accounts, while the rest goes into the PTO's general fund. That way you're able to budget well for the year, but students are able to impact some of the events and programs that matter to them the most. This system also reduces the possibility that you'll have a significant difference in opportunities and events for each grade -- you'll be able to supplement from the main PTO budget as appropriate.

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Community Advice

mum24kids writes:
My kids have been in seven different schools between elementary school and high school, and none of them separate the funds like this. And I'm in a major metropolitan area and don't know of any others around that do that, either. If for no other reason (although Craig gave you some good ones), it sounds like a bookkeeping nightmare. How do you handle something like teacher appreciation? If the 7th grade raised more then the 8th grade, do the 7th grade teachers get a catered lunch and the 8th grade teachers get a candy bar thrown in their mailbox?

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Community Advice

acsg10 writes:
Our elementary school PTO has recently become 501(c)3, and are stating that extra fundraising money from this year needs to be spent down before the end of the school year per IRS and cannot be carried over to next year, because it wasn't fundraised for "2014-2015". Is this true?

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Advice from PTO Today

Craig writes:
Not true. The IRS is a lot more concerned about how you spend your money (in line with your mission) than how you save it. Think about much larger 501(c)(3) organizations, like the American Cancer Society or the Red Cross -- it's simply good business practice for those organizations to save money and carry it over from year to year. Not doing so could really jeopardize their operations. Likewise, we recommend that PTOs carry over at least enough money to get started with some involvement building events the following year. In addition, if you're saving for a large project -- new playground equipment or technology for the school, for example -- those projects often take more than a year, and you would need to carry the money forward. All that is perfectly fine with the IRS.

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Community Advice

acsg10 writes:
Craig: thank you for your reply. I neglected to mention that there was also fundraising done this year specifically for 2014-2015, and I am not sure if that would change your answer. I am told by the PTO that because the money in question, about $3500.00 was collected for 2013-2014 school year it must be spent by June 30, 2013. Please advise.

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Advice from PTO Today

Craig writes:
That doesn't change things. You can carry money over from one fiscal year to the next, no matter when the money was raised. Semi-related example: Say you raise $40,000 for new playground equipment and the equipment and installation ends up costing $32,000. You don't have to spend the remaining $8,000 on things for the playground that you don't necessarily want. You can put the remainder into the general budget.

Likewise, you don't have to spend every dime you raise in one year just to spend it. You make the purchases you need, then you carry the rest over to the next year. As long as you spend it in line with your overall mission, you're OK.

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Community Advice

mattkelb writes:
If our school allocated fundraising money to PE and didn't take a vote on it, can the principal legally give the remainder of the money back to the PTO general fund?

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Advice from PTO Today

Craig writes:
It doesn't sound like there's any legal issue, whether or not the group voted on the allocation. You can always change budget allocations. The IRS mostly cares about whether you spend your money in line with your mission -- pretty much anything you do for the school or to help your group would qualify. If you've actually given the money to the principal already and he wants to give some of it back, the issue would be on the school side. If he's willing to give it, you can take it.

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Community Advice

mattkelb writes:
Would the answer or decision change if we designated that a portion of the fundraiser profits go to PE and sent letters home to parents?

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Community Advice

admobile writes:
Here is a unique and new idea where AdMobile pays the school in the name of each grade's percentage based on parent participation. This solves your problem.

Here is the idea. Parents are burned out with selling, collecting money and distributing products. AdMobile created a unique idea where parents trade off doing all that for receiving a few text ads per day. It doesn't cost the fundraiser or parents any money. The money is made when ads are sold to businesses who like the idea of sending their coupons, promotions, etc. to the parents' mobile phones via text. Fundraisers don't even really sell the ad. They just refer the advertiser to AdMobile who manages the advertisers, collects the ad revenue and pays the fundraisers. All the fundraiser has to do is have their supporters subscribe via text and show an app about the advertising to advertisers.

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