JHB is right but I want to focus on his use of the words "thereby reducing the personal liability of the officers and board members".
This is the part that is most often over looked. There are things an organization can do or fail to do that will cause the officers or employees to be directly responsible for taxes and or penalities. This is one reason, and a rather important one IMHO, to carry the insurance.
It is not normally the things we know that end up hurting us, but the things we never knew anything about!
Incorporating protects the individual person from liability, not the position or the group. In other words, if a lawsuit were filed against the president of the PTO as well as the PTO, any judgement could not include personal assets of the president (ie. house, bank accts). Any judgement would be against the corporation and assets of the corporation, in which case, if covered by D & O and general liability insurance would be paid by the insurance company.
This if off topic but...JHB if you are not a lawyer you missed a good chance. It's never too late, I would be glad for you to represent our school district.
Most groups incorporate not for the ability to get loans or because they're hiring. Instead they incorporate to: 1) add a level of seriousness to the operation; 2) protect officers from liability.
We think it's a wise move to incorporate and then get 501(c)(3) status.
