My standard response to that is something like this: "I'm not aware of that. Could you please get me a copy of the law so I can get it in the files so everyone knows about it going forward?"
In this particular case, I doubt that she can produce anything. What she's probably thinking about is a part of the IRS code that essentially says that benefits can't inure to individuals, but they're not talking about nominal gifts (generally thought to be under $25, although I think the real limit might even be a bit higher). It's very common for parent groups to have what is commonly called a sunshine fund or committee, and they might send flowers if someone dies or is in the hospital for awhile, a get well card to someone who is sick--stuff like that. There's really nothing wrong with that. Some places have very formal rules for that kind of committee in terms of who "qualifies" to get something, but I think most kind of wing it based on what they hear about and how serious the situation is. Sometimes these sunshine committees will also organize collection drives for clothing or gift cards if, for example, there's something like a family who is left homeless by a fire.
What you cannot do is organize a fundraiser to benefit an individual/family. That's usually something that would require significantly more time/resources, and you would run the money through the PTO. Since the PTO's mission is not to raise money for the homeless, or for cancer patients, or the local hospital, etc., that creates a problem--you have to stick with what is in your mission. Plus, that can end up resulting in a significant check going to an individual/family.
All that said, some people prefer a more conservative approach, and when something like this happens, the officers or committee chairs just chip in their own money and send it along in the name of the PTO. There's really nothing wrong with doing it that way, either, if people are willing.
