madobee,

Although I took a leadership position in PTO matters for several years, I'm barely a member of our middle school PTO now. Even so, I still find this site valuable for ideas towards other groups. As the parent of two kids, I'm forever helping with a fundraiser or recruiting volunteers or helping decorate for a special event regarding one of their sports or clubs.

It's nice not to have to deal with heavy administration issues any more, but many of the other aspects still apply.

Phil, you interpreted it correctly!

"Thank you" to you and JHB!

I find great info and support at this site, therefore, although we are not independent, we will continue to utilize the assets of PTO Today!

Ma DoBee

Critter really hit the nail on the head.

There is only one thing I would add and it is more of a clarification.

I was a little confused by the 4th question. The way I interpreted it, you asked if it was OK to have a separate EIN that keeps a balance of <$2000 for short term needs - thereby staying under the $5K IRS reporting threshold- but keep the other $8000 you raise each year in the schools books. As Critter said in #3, you can't have it both ways.

Please forgive me if I mis-interpreted.

Critter's done a good job of summarizing the issues.

Something that sometimes happens with groups like yours is that they get a new crop of parents in who decide the system is "broken" or "wrong". In some cases it is and the process should be re-thought.

But in others - especially private schools - the parent group wasn't established with the intent that it BE an independent entity. In that case it amounts to a volunteer committee suddenly wanting to become a organization.

You need to figure out what the intent of the parent group is and how it will best function in the longterm. Any one set of of parent leaders - no matter how wonderful - are probably only around for 1-3 years. (I know, there are exceptions.) But the organization - the school - has to continue to exist indefinitely.

I know it can be confusing. If your group does decide independence is the answer, this Forum is a good resource. If not, that's less administrative overhead for you and there's lot of other help here your core objectives like programs and volunteerism.

Critter,

Thank you for your quick and thorough reply!

Ma DoBee!

Great questions...here's some feedback.

1. Maybe not. If your school and your members view the PTC as a committee of the school, then your group would not have its own EIN. Your group would need an EIN only if it is operating as a separate organization. However, no harm done. If there's no $ associated with the EIN, there isn't anything to report to the IRS.
2. No. It seems you could open a separate checking account using the school's EIN (with the school's blessing), and manage it yourselves, even though organizationally, you're a committee of the school. As long as your money is in account(s) opened with the school's EIN, regardless of who has signature authority to the various accounts, your money belongs to the school.
3. If you mean, can you take advantage of tax exemption for purchases using the school's id, but setting up your group with its own EIN, no. Can't have it both ways. Your PTC and school really have to decide whether your group is an extension of the school, or an indenpendent organization.
4. Assuming you act as an independent group, with your own EIN, then the IRS expects you to apply for 501c3 if your annual gross receipts are normally greater than $5,000. If you have $10,000 in gross receipts for a few years ("normally"), then you should apply for 501c3. Once you are a 501c3, you must file the annual form 990EZ.

As your group matures, you'll want to have that important discussion about independence both with your school administrators and your members. While many, many parent groups are independent of their schools, it's not the only successful model. In your community, at this point in your group's evolution, maybe it's best to stay under your school's wing. That's for you all to decide.