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Keeping Our Residual PTA Funds!

23 years 3 weeks ago #75157 by <Buffsfan>
Replied by <Buffsfan> on topic RE: Keeping Our Residual PTA Funds!
MDMom, like with a lot of other things i'd check your bylaws. Some bylaws are kind of specific on this.

academy.d20.co.edu/mve/sicpto/ptabylaws.htm

Says can't deposit PTA funds in another school organization's account. We left the PTA and just followed the bylaws. PTA tries to make it seem all tricky and complicated but it wasn't that hard.
23 years 1 month ago #75156 by JHB
Actually, I think it's not that the funds have to be distributed TO a 501(c)(3)but within the exempt purposes of a 501(c)(3).
The dissolution clause was one of the things we had to amend when getting our 501(c)(3) status last year, so I had the opportunity to talk to the IRS rep quite a bit about it. He sent me some standard language appropriate for a PTO to use, which I'll copy into the bottom of this message.

Either spending the account down to zero within the normal operations of PTA activities before phasing out or giving the money and other assets away as appropriate dontations (probably to the school) both seem like workable solutions.

*********************
501(c)(3) Dissolution Clause
Upon dissolution of this organization, after paying or adequately providing for the debts and obligations of this PTO, the remaining assets shall be distributed to {schoolname}. If {schoolname} ceases to exist, remaining PTO assets shall be distributed for one or more exempt purposes within the meaning of section 501 (c) (3) of the Internal Revenue Code, or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose.

Note: This seems pretty standard, but I'm sure other acceptable versions also exist. The last sentence was the piece the IRS insisted be included before they would approve our application, and they really wanted us to use that exact language.

[This message has been edited by JHB (edited 11-05-2001).]
23 years 1 month ago #75155 by Susieq04
Replied by Susieq04 on topic RE: Keeping Our Residual PTA Funds!
Better check with the IRS regulations on 501(c)(3) organizations which are what PTA's are...If you dissolve a PTa which can only be done with a certain % of membership votes- check into the bylaws on dissolving the PTA the IRS requires that any monies left over in that nonprofit organization be given to another already established nonprofit organization (501c3)..
23 years 1 month ago #75154 by <Buffsfan>
Replied by <Buffsfan> on topic RE: Keeping Our Residual PTA Funds!
You could also start the PTO now and keep the PTA nominally alive. Your fundraisers would be PTO fundraisers and your major expenditures could be PTA expenditures until your PTA funds run out (we could spend a mint just on Ellison dies!). Then you could disband the PTA. Wouldn't cost you much because you might only have 20 members of your PTA or something.
23 years 1 month ago #75153 by MDmom
Keeping Our Residual PTA Funds! was created by MDmom
We are a PTA in the process of becoming a PTO. I understand that the PTA will seize any "residual" funds after all obligations are met. This is a big problem as we will still have a large balance left over from funds we were collecting for some major acquisitions planned for next year, which cannot be made this year. So it seems to me that the best solution is simply to form the PTO now, apply for non-profit status, and start making donations from the PTA to the PTO account. (The PTA bylaws simply states that leftover funds must be donated to one or more non-profit organizations.) The PTA would be disbanded when all donations have been made. Is there any reason why this might not work? This just seems like such an obvious solution to me that maybe there is something I am overlooking?
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