I understand the key benefit of incorporation is the protection it provides your indivdual officers. For example, if your corporation is sued, only the assets of the corporation are at risk, not those of your officers. Anyway, I think there is insurance that would do the same thing (check with AIM). You'd have to pay for it each year, which is something to consider.
Another approach would be to incorporate, thus creating a new group, and then file for 501c3 with the new group. That means a one-time fee to the IRS and the pain of the application, but gets you the ongoing protection of incorporation.
A "PTO" shouldn't be controlled by people who directly benefit (meaning the school, teachers anad children). It sounds like they are taking away those checks and balances by forcing a school committee control on your organization.
Nevertheless, they can make it hard for any Rogue organization to not have use of school facilities, or to work with teachers in harmony.
What is the purpose of a PTO? I think it's to improve the educational experience of the children. This might mean raising funds, fostering better parent-teacher communication or possibly something else.
But if the meaning is that they control the uses of funds raised by a volunteer PTO group, I don't think so. It's those volunteers that put in their time and effort that should dictate the diposition of funds and items.
But make sure that those checks and balances are in there so that someone cannot easily embezzle or steal the funds.
Thanks again - you all are just confirming my uneasiness with this.
According to their attorney incorporation protects the officers. We are a 501c3 and have not incorporated. We do have written bylaws. I'm just wondering why we can't get insurance to protect the officers?
I would think presenting an annual report to the board we be a good option to keep them up to date although at any time they can see our books and or budget since we give an update at our monthly meetings.
The reason for the subordination clause was given as something to the effect "we don't want any rogue PTOs or other entities that purport to align with the school district and aren't doing that and the school board wants to be able to take action if something unwanted is going on."
When I asked the question what if we decide not to do this - it was met with criticism by the school reps and the statement was again made that "well, I'm sure the school board wouldn't want any rogue PTO's out there" (basically my perception of this was we don't really have any option!)
Thanks for all the comments - it certainly helps to hear what others think (or see as the case may be!)
Knee-jerk reaction: I would resist this at all costs.
"The PTO exists at the whim of the school board" is just a wrong statement and raises red flags with me (real high!).
IMHO, a PTO exists as long as the membership of the organization wants it to exist. The school board has nothing to do with it - meaning it has no control over the operation of the PTO. (However, the district may want some oversight of the finances. Completing an annual form is a reasonable request.)
If you are a 501c3 org then you already exist INDEPENDENT of the school board and don't need to re-organize under their umbrella (unless, of course, your organization decides it is in its best interest to disband and reform under the school board).
When you meet with the disctrict's atty., I would ask lots of questions about why this is being done and what would happen to the EXISTING PTO group (especially the $$ already in the bank). If possible, bring a long your own atty. (or CPA or someone with experience in this area of the law) who can verify what the district atty. is saying (maybe a parent).
Now that my venting is done, I have a basic question (open to anyone who can answer). What is meant by "incorporation"? Can you be a 501c3 and not be incorporated? Is incorporating addressing a liability issue?
Sounds to me like you will be a function of the school district, no longer independent. Or maybe they're looking at an umbrella 501c3, with each school's group under the umbrella. I think that's how PTA chapters operate. In either event, it sounds like a major change from being a standalone 501c3, incorporated or not.
Thanks for your comments. We really are a 501(3)(c) but have not incorporated. We do feel like we need to do this but maybe not just this way.
They have said they want to do this for all the district PTO's for continuity. But making the school district treasurer the agent and having the clause about subordination to the school board seems to be something that we don't want to do.
They have also drafted a Code of Regs for all the PTOs that have the makeup of the bd of directors the officers of the board plus 1 teacher rep appointed by the building principal. Also they want the principal to co-sign any check written for over $200.00.
We are a rapidly growing school district and in theory I understand that they would like all of the PTO's to operate basically the same way.
The statement from them has been made before that the PTO exists at the whim of the school board.
Another item in the regs that seem strange is the purpose we exist rather than language which says things about the students it has language referring to the "school"
Just wondering what others think - I know this is a long process and they are offering to help by filing all necessary paperwork and then allowing the PTO's to submit annual reports and the school district accounting firm would complete our taxes - which is a plus I guess.
All PTOs will have seperate identities (and numbers) it was explained similar to how corporations with subsidiaries work.
