Our PTO traditionally gives money to all staff members (teachers, custodians, secretaries, cafeteria workers, etc.) once a year by check made out to the individual. We are a 501(c)3 organization. I am concerned that disbursing checks in this way is in violation of our tax status. For the teachers, we can include a letter instructing them to spend the money on classroom needs. I'd say that's justifiable as far as our "educational purpose" goes. But for support staff, it really just seems like a personal gift. Is this allowable under IRS rules? Can we give gifts of any kind--retirement, hospital, sympathy, etc? All I have found so far in IRS publications is: no net earnings may inure to any individual.