Critter has it right regarding the IRS regs. The question I have is whether the Student Council qualifies.

I would doubt whether the SC is itself a registered 501c3 organization, so the rule may not apply. However, the SC is probably an extension of the school, in which case that does fit in with the purpose of a PTO (to support the school). You probably need to check how the SC is organized and who pays their bills (it is probably the principal through the school's bank account).

I agree that $2700 is a lot of money to be handing out without approval of the organization.


BTW: We hold a Coin Drive every year and most years that money goes to charity, usually elected by the students. So long as it is a 501c3 charity, there is no problem with the donation. Part of any schools purpose is to produce prodcutive, active and civic-minded adults, and a charity drive does support that goal.

On the contrary, a 501c3 can donate to another 501c3 no problem with the IRS. I'd be more worried about the problem with my members. $2,700 is alot of money in most PTOs budgets to just hand over without a vote, no matter how noble the cause.

If you want more info about IRS regs related to non-profits, go to www.irs.gov. Search the Publications. They produce lots of documents that address these issues. Try Publication 557 and 526 for starters.

The Student Council at our school is basically the same thing as PTO except run by the students. What I mean by that is their purpose is to help out the students and teachers. We have never given them money outright, but have helped to pay for things that they couldn't afford.

I think if I were you, I'd rather help fund whatever they were working toward rather than just giving money to them. This would alleviate the concerns you have and give your PTO a little advertisement. It looks good and accomplishes more when you work with another group, especially a student-run group.

Why didn't student council request this ahead of time? It should have been voted on by everyone. I would have voted no. Why does student council need money? Are they going to spend it on the students, teachers, & school? Now your group has left the door open for other groups/classes wanting matching monies. I don't know about the IRS aspect but if the student council isn't a 501c3...
Good luck!

I can't answer about the IRS thing, but my concern would be if there is anything in your bylaws that state how much money can be spent without general membership approval. We have a line item budget that is approved by the membership at the first of the year which covers most of our expenditures. Our board is allowed to spend up to $100 with the approval of a majority of the board members. Any amount over that has to be voted on by the general membership.

We are a 501c3 PTO. Our Articles of Incorporation state that our purpose is "to enrich the students" of our school. Back in the fall our Board considered giving some of our money to Hurricane Katrina victims via Red Cross. It was decided then that it was inappropriate to just write a check, because that did not enrich our students in any way. We held a Bead Sale, proceeds from the Bead Sale went to New Orleans. This alternative was chosen because we decided there was educational value in it for the students. Now months later the Student Council decided to host a Spirit Week, where the kids could pay a buck each day and be allowed to wear a crazy hat, backwards clothes, etc. It raised 2700 or so. The Student Council teacher asked the PTO to match it (after it was over) and we did. We just cut a check and sent PTO money. No prior advertisement that we were going to do this.

Anyone out there know if this is legal according to the IRS. I heard some rumblings that one non-profit cannot give to another unless they notify their members/donors that they are doing so beforehand.

If you know of any official information/publication/website to point me toward, I'd appreciate it.