This is not a discussion of PTA vs PTO, it is IRS law. If you compromise your 501(c)3 status by distributing money to the benefit of individuals, that is not what the organization was set out to do - you are not the Red Cross regardless of the acronym the organization goes by.

Thak you this is just what i was trying to get across but you said it much clearer!!

... oops, I meant for that last line to say "As such, you have an obligation to use that money ONLY in support the purpose of your group, and not for any other purpose, no matter how worthy."

OK, I'll admit I didn't read ALL of the above replies, but I thought I'd give my take on this.

I USED to be a lawyer, way back BC (before children). It's been a few years, and tax law wasn't my specialty, but...

First of all, you have to remember that those of you who are non-profits under 501(c)(3) are under the category of a group that benefits education. There are several types of groups that can get non-profit status; educational groups are just one of them. However, as your group's purpose is educational and not social services (or whatever category would cover paying funeral expenses), paying for the funeral expenses would be outside the scope of the organization's tax-exempt status.

Providing teacher's gifts, incentives, etc. that are related to the group's purpose is altogether different. These types of expenses would legitimately fall within the scope of the organization's purpose.

As a parent and PFA member, I would also have two other concerns. First, does this expense fall within the bylaws? Our bylaws specifically state that our purpose is to support education at our school, foster underatanding between parents and teachers, etc. We have a clause that specifically prohibits us from lending PFA-owned items to any other organization. Second, where do you draw the line? We've had several children with life-threatening illnesses (cancer); some who have lost parents due to illness or other circumstances; several teachers sick with cancer; etc. It's not our purpose to make donations to any of these individuals to help with their expenses.

This situation came up after Sept. 11th. Some on our Board wanted to make a donation to a 9/11 fund; however, after some discussion, we decided that that was really not our mission. This did NOT mean that it was not a worthy cause! We did organize a separate collection for those who wished to donate something to this cause.

So, my advice (for what it's worth) is to remember the PURPOSE of your organization, and use its funds only to further its purpose. If you wish to support other causes, your school can set up a VOLUNTARY donation/collection system. If you are concerned about tax implications or PTA restrictions, let the SCHOOL (teachers, principal, etc.) handle this, not your organization. Remember that you are stewards of the moneys collected and raised by your group. As such, you have an obligation to use that money ONLY in support the purpose of your group, no matter how worthy.

Our PTO has been a very informal one all along with no by-laws, not a non- profit etc. Last year we had 3 families that we made money donations to due to serious illnesses of parent or child. Also we had a spouse that died due to suicide of a facilty member. All together we probably gave over $600.00 to these people. Our school enrollment is 300 students and our profit from the fall fundraiser was only $3000.00. The other fuctions we had only brought in a few hundred dollars each. We had people complaining that the PTO did this because we had missed giving to some families who also had tragedies happen to them. I think if you let the parents know when you do your major fundraiser in the fall that monies may be used for charitable donations of families in the school that would cover you. As in our case we thought we ended up spending to much money on charitable donations since we didn't raise that much to begin with. Also, since we had people complaining you didn't give to my family etc. we decided to stop this practice. So the new board for this school year decided to get policies and by-laws in place. We limit $25 donation to death of a family member of staff working in our building. ((We haven't had to deal with any students death recently thank goodness!) Before my kids went to this school a student died of Cancer and a cookbook was done in his memory. The family ended up donating the money made to the Cancer foundation. ) Many times this is a donation to their favorite charity or books in the deceased name to be donated to our school library. We also decided to limit $25 to Nurses day, Librarians day etc. If there is a tragedy we decided that a bake sale, or popcorn sale or pass the card would be done for that specific family etc. Just don't get in the situation we had and miss giving to a family due to an oversite, and get people turned off on the PTO.

I think its pretty sad when people have to find reason's to donate money. When someone (child or parent) has an unexpected bad event happen to their family that changes their lives in some way, people should be happy that it did not happen to them and that they should be willing to help out any way they can. Because you never know if it will happen to you.

As far as the IRS revoking your non-profit status becuase you made a donation (big or small) to someone in need, I find it hard to beleive that they would do that. I think if your organization started making a habit out of it and could not prove that these tragic events occured, possibly someone would complain to the IRS to investigate. I mean if someone were trying to get money from your organization for their new kitchen, I think you would know the difference. But if you keep good records, and keep newspaper articles or some sort of documentation regarding the issue, and keep a copy of the check that is written, I find it very difficult to beleive that even THEY are that heartless. And if they are, I would certainly make sure that everyone knew about it.

And in regards to the Teacher Apprectiation gifts, in our school we give them a luncheon at the end of the week and last year gave them all $5.00 gift certificates to their favorite lunch place (they order from every friday) and they were thrilled. Our money comes from the parents who support our fund raisers. We are a small school and I am sure that some school could not do this, but we are able to come up with it and no one has complained about spending this on our teachers for the one time of year. Also, I feel if I want something from the teachers (help or cooperation in organizing something) they feel a little more appreciated than if we didn't do anything.

Just my opinion. [img]smile.gif[/img]