Q&A

District requires PTO w/in district umbrella

I am trying to understand our PTO and make a meaningful contribution. Our district currently houses all ‘district support organizations’ within the district financial umbrella, keeping a separate ‘activity account’. The school board policies specifically encourage district support orgs to pursue 501c3 status and spell out that the support orgs cannot use the district EIN for tax exempt purchases. However, the district requires all purchases with these activity funds to go through the district PO process. All deposits and income is filtered through the building secretary and principal. The district superintendent has indicated the PTO board is covered by district insurance, including D&O and crime. The business manager has advised the district insurance does NOT cover the PTO. The district does not have 501c3 designation and currently refuses to pursue because it’s not been an issue in the past. Is this normal? Can the district require support organizations to turn over their funds to the district? Is requiring that and then not covering the pto with district insurance even possible? What is the risk being assumed by PTO board members in this scenario? Any insight/guidance/thought suggestion on any/all related to this convoluted scenario are appreciated.
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Hi there,
There are a few different things going on here.
If the district is encouraging parent groups be set up as independent 501(c)(3) organizations, then it shouldn't also be requesting that all deposits and income be filtered through the school. That's not OK. You should be handling that independently, and could have a problem if somehow income raised as part of an independent organization somehow didn't match what the school accounted for. Having said that, you do need to follow the guidelines and suggestions of the district, because you don't want it making life miserable for you. We have certainly heard of districts determining when groups can fundraise and how often, but it is unusual to hear about this level of control.

Insurance is a separate matter. If the district is telling you that your group is not covered at all by its insurance policy, then your group should look into getting insurance. PTO Today offers insurance, and we also have a leader support team that would be happy to talk to you about what kind of insurance your group should have.

If you want to contact leader support, call them at 800-557-2670.

Rose
- Rose H
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Our PTO sometimes donates funds to the district for particular purposes -- eg, buying some laptops -- and those purchases are made through the PO system (and it's important that the district buys the computers, so they have the warranties, etc.). The school board has to formally approve those donations. But otherwise the PTO handles its own finances: we collect the dues, reimburse for purchases made, etc.
- gjcoram
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