In our elementary PTO, the ownership of fundraisers changed over the years. First PTO owned both, then one and one, the finally, both belonging to the school.

There were reasons for the changes and it was all done in a good spirted way. But as ownership moved to the school, expectations as to what the PTO would fund also diminished. (So we weren't scrambling to REPLACE a fundraiser.)

But the process never really changed. General objectives were stated as to the purpose of the fundraiser, the PTO coordinated volunteers, and the school/children benefited.

The PTO still hosts some activities and events (a couple of which raise funds), but their effort is more towards parent involvement than raising money.

So the point is - changes like this aren't necessarily a bad thing, but might just be a sign of the times. Whatever happens, communication is a key factor.

Our past principal worked with our past president in making the original by-laws when we went PTO four years ago. As a courtesy, we discuss any changes with the current one. He gives us his input and may strongly suggest what we should do, but has never come out and made us follow his directive.

Certainly the principal and Board of Directors are free to plan and execute their own auction fundraiser. But I suspect they'll be short volunteers!

Ok, so now the principal is requesting that all the monies from our annual auction go through the school instead of the PTO, and is trying to get this amended in the Board of Directors bylaws that the annual auction fundraiser will be ran through the school and through the Capital Campaign committee from here on out. So, what is the purpose of a PTO then?

As you can probably imagine I am extremely frustrated right now, and not sure what to do next. The principal is making it very difficult for us to approach her or talk to her, so at this point we are meeting as a PTO group today, and are going to discuss our bylaws. Also, the principal seems to think that she has to approve our bylaws, and is telling us what to put in them. Is this right?

We do have the 501c3 statements in our bylaws (purpose and dissolve).

There are several pieces to your post. First of all, I wouldn't have a problem giving the check to the school, as long as I got a letterhead note accepting the donation and indicating how it will be spent. I would NOT, however, just hand all our annual money over to the school at one time. We have a budget that limits how much the principal can spend on certain types of things (ex: educational materials, camp scholarships, character awards, building extras, etc.). We wouldn't just give over all that money, even if we have raised it already. The principal needs to stay within our budget limits and the definitions of each budget category.

We have an education foundation in our district that is set up as its own 501c3. I'm sure they would love to have the PTO's donate money to their cause, but we are not required. Nor would we do that since it's not for our school only, and we would lose control over how the money would be spent. I'm not sure if that's similar to your situation, but it sounds to me that your capital campaign is a different beast than your PTO. If your group really is its own 501c3, then no one except your members can tell you where to put your dollars.

When your group was granted 501c3 status, your bylaws must have been suitable to the IRS. Just be careful in changing them that you don't inadvertantly make them non-conforming to 501c3. You need to send in the new set with your annual IRS Form 990/990EZ, and it would be a bummer to get a letter back from the IRS saying you have to rewrite them again. You can pull the required language from the instructions for Form 1023 which you can read at www.irs.gov . As I remember it, the 2 critical sections are your Purpose statement and the Dissolution clause.

Even being a private school I really see an issue with all of the money going to a building fund...what about other things the kids need or fun things for the kids?
As far as your bylaws there is a clause that the IRS request be in 501 bylaws but I am assuming that you already have it in there if you are infact a 501c group. it is about where your funds go if the group dissolves, and school dissolves. JHB is an expert so hopefully she chimes in!