I may have gotten lost along the way, but I thought I'd make a comment. One of our organization's purposes (as listed in our Articles of Association)is to provide repository services for class project monies. We accept donations and fundraising money for many purposes within our school. We just keep the Choir money in a Choir fund and the Outdoor school money in the Outdoor school fund. Note: these Articles of Association were submitted with our 501(c)(3) filing many years ago and were never questioned or rejected.

We do not accept funds from any other group that raised them to be deposited into our account no matter what--that is considered money laundering...Plus espeically with filed trips if you are the one writing the check then you are the one accepting the liability if someone gets hurt, lost etc.. Our school has their own school account that the principal recevies from the district- if a tacher needs to have checks cashed then those monies get written to A) the place where they are going or the school account name..
Legally the IRS can tax you on all monies deposited in the PTO account and that is GROSS not net. They do not care when you say it is not our money--well yes they will care they will go after your organization and the organization or individiual you laundered for..(Please don't take the word you personally I am meaning your organization). Even if you clearly mark your records tha t this is not our money it is still laundering..
Now as far as the district telling you how you can spend your money or their money that was deposited in their account. You need to tell them tactifully that once the money is deposited into your account you legally as a 501c3 organization cannot accept funds from another organization that are earmarked for a certain expense. So if they are making a donation to your account saying this money has to be used for ABC event you can legally turn it down. tThis is a sticky situation becuz you do not want your school board to turn on your PTO but they cannot have say over your accounts just becuase you are holding hteir money for them. This is a practice you may want to get your organization out of. The best way is to blame the IRS guidelines --You will hear but you will never get caught--If this is what they tell you this is how we handled it--What example are we teaching our children then that it is okay to do spomething illegal as long as we don't get caught? My board stated to the Board of education and principals when we had a sit down that we new our PTA in the past has done some very questionable things, and this has put our tax exempt status in jeopardy which is one of our most important and valuable assets. We as parents would not allow our intergirty to be put into question and would not allow this practice to continue. As officers of the corp we have a responsibilty to ptortect the tax exempt status and we would not allow ourselves to be brought up on charges of mismangement (which is what could happen..So basically I would recommend that your PTO EXEC OFFICERS ONLY sit down discuss the issue and get everyone on the same page. remember the goal is to protect the organization for the present future children it will serve. Then i would schedule a meeting with the your PTO board and then the principal. If necessary follwo up with the school district. It will seem like a difficult thing to do but in the end no one will be able to call your organization or you on the lack of intergirty for doing the right thing even if it is not popular..

Susiq04,

Could you please e-mail me at This email address is being protected from spambots. You need JavaScript enabled to view it.. I have been researching IRS issues concerning PTO cash donations to PTO families and you appear to be very knowledgeable about such things. I was hoping you could tell me where I can find the IRS code about such donations. We have made donations to families in the past because of deaths in the family and such but we have always given "stuff" that was purchased so that we had a receipt for tax purposes. It sounds like this is not o.k. and I was wondering if you could guide me to where I might find some legal documentation of the rules so that our PTO can do the right thing. Thank you so much. I look forward to hearing from you.

Dear Susieq04

Thanks for the info. The reason why I was asking what to do is that all of a sudden we seem to be getting more and more into others telling the PTO what we can and can not do but yet there are no quidelines nor bylaws set by any others example district telling us what can be done. So we once again have to take it upon ourselves to do the right thing. Quick question for you if you don't mind me asking do you put any funds thru your PTO for others in the building example Student Council - music - orchestra - teachers in general when they want to do a field trip who do they have the checks made out to - we have them made out to the PTO and then deposit the checks and then write a check for one amount back to the person incharge of the fieldtrip (well the place they are taking the students to)is this the correct way to do this?? As far as the question I was asking about the orchestra funds - the orchestra teacher did a fundriaser for her students in orchestra this was to take them on fieldtrips and to help out in the orchestra dept where and when ever needed - we put the funds into the PTO account but have it listed as orchestra in the account so that we can keep track of the funds going in and out (these funds are used solely for the orchestra department students which totals about 90 in one school and
34 in the other) but now all of a sudden I have heard from our district office
who by the way has no quidelines nor bylaws telling us what to do that now we have to get permission from district and if we give the orchestra teacher monies for a fieldtrip we have to mark it as a fieldtrip donation from the PTO
is this the correct way to do this. I know I have probably asked the same question a few times here but I need to know exactly what I should and should not be doing - I am new as the PTO president and I want to make sure that things are done correctly. I mean our bylaws have not been updated since 1993 if I am not mistaken and I definately think that is an area that needs to be corrected - Also do you know of any district bylaws or quidelines informing the PTO and such in your area of what they can and can not do??
Thanks again for helping
Robin

ok 1st things 1st--Money laundering is the biggest no no for ANY TYPE of organization..2nd thing- If you raise funds the organization/person raising the funds should disclose(and they might legally have to)what the funds are going to be used for--Now if the organization fundraises and people purchase these items under theimpression of what they were told as to why they were raising funds and all of sudden the game plan changes and the funds are not spent the way they were disclosed you have a MAJOR LEGAL PROBLEM--That is considered FRAUD!! Even the Redcross got into some trouble with the $ they raised for 9-11 and then it wasn't being used the way they told the public, what makes a school district think they are exempt from this type of FRAUD..

Now about getting this into your budget line as an allowable budget line. Does it promote education and/or advocacy for all children in the school and not just a select few--If so then you should have no problem. But it should be stated as with all committees what the funds are being raised for and how they will be disbursed and on what. These must be disclosed and have approval of the organizations board members. Also make sure that this person (the music teacher) is a member of your organization.
One more thing though--if this funding is now coming out of funds your organization is raising, and it is going towards field trips you have the HUGE Liability issue--Should someone get injured your organization would be liable..Check with your insurance carrier about what your organization should obtain (from parents/guardians and the school district) before sponsoring a field trip.

[ 03-03-2002: Message edited by: Susieq04 ]

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