If your group is organized as an independent parent group, then it should be focused on community building and activities that enrich the school experience for the kids. Your issue here is having such a different point of view from the principal and your board should try to sit down and have a (non-confrontational) conversation with her. Share with your principal why building community and holding family events really makes a difference. Let her know that more involved and connected families support the school in so many ways. Yes, fundraising is important, but shouldn't be a parent group's only mission, not by a long shot. If the principal isn't budging on this issue, can you at least come to a compromise to host a family event before year's end? Propose something very simple, like an ice cream social or picnic after school. Maybe if the principal sees how positive this kind of event can be, she may start to think differently.
Many PTO leaders have had challenges dealing with the principal, so we've written many articles on this topic. You might find these helpful:
Improve Your Relationship with the Principal
Make the Principal Your Partner
Whose Rules, School or PTO?
Improve Your Relationship with the Principal: https:/classic.ptotoday.com//pto-today-articles/article/1360-improve-your-relationship-with-the-principal
Make the Principal Your Partner: https:/classic.ptotoday.com//pto-today-articles/article/209-make-the-principal-your-partner
Whose Rules, School or PTO? : https:/classic.ptotoday.com//pto-today-articles/article/167-whose-rules-school-or-pto