It is true that we are not to raise funds FOR other organizations. I have found though, that PTA can be supportive in others efforts. We have certainly been their when asked to count money or lend an adult hand. So even though we are not running the drive we can certainly lend ourselves to their efforts. We did do a food drive and a mitten tree. Niether of course raised money, just goods. We also took part (with many other community non profits) in a community effort that raised money for local organizations that serve kids, (our kids) It would have been sad not to have PTA presence. Money there raised on site and never passed through our books, so again, man hours.
Our PTA doesn't do anything for anybody else. The school has a number of events -- we did a penny drive for Red Cross after 9/11; a parent donated a stamped envelope addressed to the White House for every child who wanted to send $1 for the children of Afghanistan; canned food drives for a local food bank; etc. But these events are done by the school, under the leadership of the student council. If anybody came to us, we would send them to the StuCo sponsor.
Actually, we do receive a number of mailed solicitations, and we simply put all of them into File-13. If they were to make the effort to contact us personally, then we would send them to StuCo. But just because you've put the PTA's name and address into your mailing database isn't enough to warrant any effort on our part to respond.
But SusieQ had a good point, and I will make a note of it in the presidents handbook for my successors. It's not enough that we, as a 501(c)(3), shouldn't be doing fundraisers for somebody else. It's that we, as a 501(c)(3), cannot be doing fundraisers for somebody else -- and they, as a 501(c)(3) should know that it is inappropriate to ask.
I agree 100% with SFilak. Events related to September 11th were an exception. I know many non-profits have been hit hard this year and donations are down. However, our position would be that we need to focus on our mission and activities as a PTO. That would not generally include sponsoring other fundraisers like you mentioned. We, too, do some generic things, like perhaps a can food drive as part of a PTO event. But these are general charitable works both for their own worth and as an opportunity for the children to paricipate in philanthropic activities.
If it were me, I'd simply write a polite letter wishing them well on their efforts but explaining that the PTO needs to focus on its own mission and goals. I'd keep it short and sweet, and probably not refer to the other activities at all. Good luck.
Actually as a 501c(3) organization the IRS will not allow you to raise or donate to another non-profit organization unless you are terminating your 501c(3)organization. This means any monies you collect should not be deposited (or funneled) through your organizations bank accounts. Your organiation should not be depositing the money and then making out the check from your organization. If you are going to collect you should have the people make out cks directly to the organization you are collecting for and you can forward the checks to the organization &/or have the bank make a bank check out for the cash you collect (but do not deposit it into your PTA/PTO account. This could result in a tax problem if you are audited.
I hear they are big money makers... 
