One more thought - at our meeting last night, we voted to allocate any remaining surplus at the end of the year to a future "special project". It might be a new school entrance sign or some other major expense, but the point is that we are identifying it as something different than just our general incoming checkbook balance. Next year when I create the budget, I will include a special line item for this future project. We may need a year to decide what it is and to raise enough funds to do it, but we have seeded the fund at this point.

Thanks for all of your input. We do track our budget closely, and had made the money we had needed for the year back in March. This particular event was never intended to make money; it was an end of the year event (early May), so it was the end of April when we realized that we were going to make a substantial profit, than making just close to breakeven. This has given us about a third more money than we would have had. At this point we have included this money with other surplus moneys and created a proposal as to what it could be used for, based on input from the school and from other board members, as we would have with any other event that had made more money than expected. I've heard two differing opinions from people: one, that this money goes toward the overall budget, and that it can be reallocated and included in an overall proposal for end-of-year spending; and, two, that the profit from this event should be treated separately, and used perhaps to offset the cost of the same event next year (it is an annual event). Anyway, the plan at this point is to present the overall proposal, as well as explain how the total amount was arrived at, and see where the conversation leads.

We track that kind of surplus throughout the year and start to spend it in April or so. This year we told the principal we had $5000 unbudgeted surplus (we had a great fall fundraiser) which he distributed to the different grade levels. Plus we are using some of it for a nice Volunteer Appreciation Reception in June. The key to being able to spend your surplus is knowing you have one in the first place. If you budget and track your income performance closely, you can do something fun like a picnic or additional monies for the school (and end the year on a high note). If you don't really know how much surplus you have, it'll just stay in the checkbook doing nothing. And, no, we don't call family events "fundraisers" since that's not their intent, even if they earn a profit.

Any kind of money we make goes into our general account unless we vote on it to go in another account or have a special function for a specific function. We never have any problem finding a way to use it, but the members always decide.

Hooray learning--it's nice to make some money without really trying!! Our principal considers the intent of the event to determine whether or not it's a "fundraiser". We are obligated to give 20% of fundraisers to the school directly. Dances aren't, but say, the carnival/ Santa's Workshop or selling Entertainment books would be. I personally would put the money you made into the general monies or...
LUVMYKIDS had a great idea--use the money to host a free event for the school. (I originally typed membership, but we always make our events a school wide thing not limited to just those card carrying members of PTO.) We did it earlier this year--a pizza evening, no charge, but we did request an RSVP so we had enough pizza to go around. We had entertainment by the chorus and it was a nice evening without having to pitch some volunteer/fundraising thing that was coming up--just some time to eat & get to know each other.

I would just explain the situation at your next meeting the way you explained it here. I can't imagine anyone being upset because you unintentionally earned some money. Let your members decide what to do with the unexpected windfall. Maybe use it to host a final year end family night or buy some special materials that the teachers need.