The key cost is a one-time fee of $750 when you apply with the IRS for your 501(c)(3) status to become tax exempt at the federal level and recognized as a public charity.
If you incorporate (which is a good idea and should be done before the 501 application), there may be a fee. That's handled at the state level and is often pretty small, like $25-$50. But you'd have to see what the fee/process is in your state.
Many feel that the actual dollars spent are more than recovered by not having to submit a portion of your dues to state/national PTA.
Another consideration isn't the dollars but the investment of time. To have a PTO as an independent entity, rather than part of a larger organization, you have to take on all the responsibilities for running it. A PTO is a non-profit business. This is also true of a PTA unit, but I don't think you notice the administration side of it quite as much. With a PTO, you don't have template bylaws and shell programs or legal advice or training classes for officers. Many organizations are fine with this trade-off. And this site is a wonderful resource to network with others in the same boat.
I've built a 501(c)(3) PTO from the ground up, joined an small informal PTO, and become a member of a PTA chapter - all at different schools. All can work well, so I'm not advocating one over the other. But it's important that any change should be made with eyes open and good information about what it will take to run such an organization well - not just the year you are in office, but for those people who will follow.
We are working on changing from a PTA to a PTO. We have been told by someone at our Board of Ed that it is very expensive to become a nonprofit.... Is this true?
