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Ask Elly: Finance & Budget

Correct ways to spend PTO money?

Dear Elly,

We are hearing a lot about IRS audits and want to be sure that we are spending our PTO money correctly. We understand that the money must be spent specifically on the children—items used by them or programs for them. What about items requested by teachers that can be used for classroom use, such as printers, since we cannot guarantee that everything the printer is used for will be student-related? Is it acceptable for the PTO to purchase teacher appreciation items or food?

Also, I remember learning from PTO Today that we should thank ourselves with a PTO dinner at the end of the year. Is this still OK? Thanks for your help!

You are right in the sense that the IRS cares how charitable organizations spend their money, and the IRS does often monitor the activities that charitable organizations choose to support. However, the IRS does not require your PTO, or any other parent group, to spend all of its money specifically on children.

As far as the IRS sees things, your PTO exists for nonprofit (charitable) purposes, and in your case, that means educational purposes. By that broad definition, your parent group can freely engage in activities that enhance the students’ overall learning environment at school. Purchasing items such as library books, classroom manipulatives, computer software for teachers, and even printers is fine because those items fall within the criteria. And shelling out a little of the PTO’s cash for a continuum of caffeine and cookies every so often so teachers stay happy (and sane!) until June—you betcha!

As far as spending money on volunteer appreciation: Elly says it’s more than OK to thank volunteers with dinner; but don’t wait until the end of the year to say thanks! Check out “Treat Your Volunteers Right” for ways to make volunteer appreciation an effective involvement tool for your parent group.

One final thought: Elly has never heard of IRS agents coming to a school and penalizing PTO members or seizing their printer because it was used to copy humorous cartoons for the faculty. And as far as she knows, there has never been a case where the IRS confiscated cartons of ultra-soft toilet tissue from staff restrooms or the coffee maker from the teachers’ lounge that were purchased with PTO funds. So while it’s great that your PTO wants to support major programs and activities at school, it’s equally important to put a little cash aside for the small niceties (toilet paper included) for your teachers and parent volunteers, too. Good luck at your next meeting!

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