As I've mentioned in other posts, I finally saw the light on the subject of setting up the next year's budget. Thanks to some very persistent members, my last group made about 50% of that goal this year. At least 1/2 of all of the 2006/2007 projects were funded with 2005/2006 funds. They hope to make it the rest of the way by the end of this year. If fundraising goals are met, they should be able to do it. Once this cycle is established it is typically self-sustainging. Unless, of course, fundraising goals fall short. It isn't an immediate process by my last group showed me how their persistence and careful planning have made it a realistic two to three year goal.

I would love to be in the position where all the money we raise this year goes to fully identify next years budget needs (including a General fund reserve for unexpected needs that come up). We won't get there anytime soon but if we did that would mean a full year's worth of funding is in the bank across that FY boundary date.

Originally posted by pmspto:
We are in the business of providing enrichment activities and other educational benefits to the students. We are not in the financial services industry.

True, but you don't want to be spending money just to say you bought something. Better to hold onto the funds. I really wish we would have had an extra $5 k last year. Our Media Center needed it.

That's what our group used to do when run by the school. They tried to zero out the account, so they pushed money all over the place to say that we spent it.

For carry-over, We like to have enough to cover any expenses that might come up before the fall fundraiser kicks in. We had a balance around $6k last year. Even if our fall fundraiser flops, we can cover a couple of budget categories with that.

If our fund raiser is huge, we have an extra $6k to work with. (Our net last year was around $40 k.)

I think it's OK, (if not imperative) for a PTO to think in terms of their fiscal year rather that the school calendar year. Schools have a sense of urgency to do things at the end of their year that a PTO does not necessarily have to deal with.

See my post which is a similar question. The issue I believe is how much should be reserved for good fiscal practice? Personally, I think 15% of the annual budget sounds right but even at that I'm hard pressed to think of a reason for even having that much on hand at year-end. Having lots of money at year-end is counter to our mission. We are in the business of providing enrichment activities and other educational benefits to the students. We are not in the financial services industry.

No limit. Positive.

Now there are practical best-practices, but most don't apply to the typical PTO. Example: you might not want to keep more than the federally insured limits in any one bank, but those limits are like $100k or $200k (if you have that much cash you probably want it working for you in a money market or something anyway..).

If you are saving, for example, to fund a $200,000 Taj Mahal of a playground, then you can definitely keep $175,000 in an account. No limit.

You wouldn't want to build up a huge account (say 4x your annual revenues) just for the heck of it. IRS likes to see you doing the work that you're in business for.

But -- by-and-large -- no limits.

Tim

I know I've seen this discussion before. Someone in our PTO asked what is the limit we can keep in our checking account as a non-profit and I thought I had read that there isn't any. Anyone know this for sure?

Thanks