The $30,000 we roll is carefully budgeted for the following year. Every item and/or event that we anticipate funding in the following school year is listed. So if there ever were questions from the IRS as to why we have a large sum rolling over, we would have a detailed answer.
The money is just sitting over the summer, but it is very active during the school year. Much of that amount will be spent during the first couple months of the school year. We generally start the year with $30,000, raise $50,000 throughout the year, spent $50,000 during the year, and hope to end with $30,000. The kids and teachers are actively benefiting from any money raised by the PTO.
Our Accountant advised us that the State and Federal Governments do not like to see the PTO hold large amounts of money unless they are earmarked for a specific project. In that case, those funds would eventually be spent down. If the project is canceled, the PTO needs to find a new project to earmark the funds for or spend them down. The purpose of any PTO/PTA is to raise funds that are to be spent on the schools and the children, not to become a cash cow.
We hold over several thousand dollars to start off the new year. This allows us cash flow for cultural arts assemblies and other expenses while we start the fundraisers for that school year.
I find it almost necessary to roll over funds. You definitely do not want to start at square one. Year before last, we rolled over $15,000 from the previous year. We were really glad we did, too, because with the budget cuts across the country, we needed that extra money to help support the school's needs with things for which the county couldn't provide. We ended the following year with less than $3000. So, don't feel bad about rolling over money. You never know when you're going to need it, and it's nice to know it's there in case it gets any worse............
What a timely topic...we have been having this "discussion" with the co-chairs of our PTO. We mostly carry about $7K from year to year but the majority now feels we should up that number so we start the school year with the entire years budget in the bank.
Then any fundraising done during the year is building up to next fall.
One of our co-chairs is concerned with what parents would say if they saw too large a balance. The other believes if the balance is explained it won't matter. Other schools in the same city carry larger balances year to year.
There is also a concern about 503 issues and the difference between a PTO and PTA requirements. Anyone know about this stuff?
I love the idea of starting the school year off with a free event so that it isn't all about fundraising all the time.
Our PTO uses our income from one year to fund the following year, so we always have a decent balance in our account. We set our budget for the school year in August based on our income for the previous year. Let's say we made $10,000 this year, when we plan our budget in August, we will base it on the amount. Whatever income we make during the year will be calculated towards next year's budget. With this method, if we have a bad or exceptionally good fund raising year, we can plan for it or take advantage of it with the upcoming budget, and we know that our budget expenses are covered for the current year no matter what our income is for that year.
Critter;149697 wrote: Consider this....if you start the year with $30,000, and end the year with $30,000. then you never spend the $30.000.
Eventually the money gets spent. We figure if the PTA disbands, the funds will all be donated to the district so that field trips and stuff are at least funded for one more year.
