Our PTO group purchases small gifts for our teachers and staff that we give out at our annual December Teacher & Staff Appreciation Luncheon. We also purchase a nice plant or flowers for teachers and staff for bereavement and retirement. We have an account at a local floral shop. We spend about 100-300 dollars per year. What we do works for our group but may not work for another PTO.
A lot of groups shy away from purchasing small gifts because they feel all of the money earned by the school should be used for the students. I don't see anything wrong with buying inexpensive gifts for teachers and staff once a year to show our appreciation. This boosts their morale. After all, they are teaching our children. We all know how hard that can be!
Let me add that some groups try not to get involved in gift giving at all because it becomes difficult to draw the line: sick family member, retirement, new baby, birthday, death in the family. Others set policies on what situations are okay and maximum amounts.
Still other groups may have this as one of their specified activities. They may have Sunshine or Hospitality committee and things like honoring retirees and defined special occasions are part of the plan.
Obviously, if a charity's funds were blatantly being used for things like lavish trips or jewelry - that's a no brainer. But on the smaller scale, the part about not benefiting individuals is open to quite a bit of interpretation.
When I spoke to a senior IRS rep about this, he said the clause was often too strictly interpreted. That it was never intended to mean a charitable org couldn't buy someone gift such as flowers for retirement or gifts for volunteer appreciation. There are no guidelines on "what's right" or how much is too much. For a small organization a gift worth $100 might be considered huge. For an organization with budget in the millions, that might be considered a token value.
It usually boils down to understanding the spirit of the requirement and applying it with common sense to your own situation. Further, the organization may have policies about this.
Important note though - if the school handles your funds, you are mostly part of THAT organization and subject to its rules. (Although I never heard of a school not being able to buy gifts. Naturally, they would have similar constraints, but I never heard of it being illegal.
Here's the IRS citation:
A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization.
My understanding is if you are recognized non-profit organization, your funds can not be used to benefit your members, but I'm not sure to what extent that goes. Our PTO has donated towards gifts for retiring staff, but we don't purchase gifts for leaving board members.
Our PTO's money is run through our school's books. We understand that it is illegal for the school to purchase gifts from its funds. Is it legal for the PTO to purchase gifts for board members and retiring teachers? If so, is it a common practice of other organizations?
