Hi there. My district's schools are currently thinking of disbanding our PTA and starting up as a PTO. Is there anyone out there that has handled this that would give me some insight.

Thanks.

Roe

You can probably find plenty of other posts in this section that will offer more complete advice, but usually they go like this...

First form the PTO.. More detail on how do do this can be found be reading older posts on this message board and by buying the starter kit. (I resisted the purchase too long before buying).

Have the PTA spend the money, and have the PTO raise all new money.

When all the money is gone, disband the PTA. PTA bylaws say they keep the money if you don't.

On forming a PTO...

Decide if you want the school to hold your money or you want your own checking account.

_____

Read on only if you want your own checking account ...

You should study posts about incorporating and 501 (c) 3's. Laws vary from state to state, and I had to call my state officials and the IRS to figure everything out.

The largest difficulty I have was figuring out what comes first.

Here's what to do in KY

1) Get PTO approval for all costs ahead of time.
2) Bylaws
3) Conflict of interest policy
4) Articles of incorporation for Non-Profit Corporation - Filed with State Secretary of State Cost $$
5) Articles of incorporation for Non-Profit Corporation - Filed with County Clerk -Same form approved by state in 2 above. Cost $$
6) EIN Number - from IRS - Free (hint: online for requires a SSN, mail in does not)
7) IRS 501 (c) 3 -from IRS (costs $300-$700 dollars. This is for federal tax exemption, requires inclusion of copy of bylaws, conflict of interest policy, and articles of incorporation) - I am awaiting approval
6) Application for Tax exemption - State form (approval of IRS 501 (c) 3 is used for this.


Then annually based on the fiscal year you define, you have to submit one of the version of form 990, depending on gross revenue you forecast

JHB has some good posts.

Good luck.

Is the 501c3 a difficult process that would be best handled by a lawyer? Also, what about other types of non profits? Does it have to be a 501?

Is the 501c3 a difficult process that would be best handled by a lawyer? Also, what about other types of non profits? Does it have to be a 501?


Hi purple -

No the 501c3 process doesn not require a lawyer. I'd say 85% of the groups I interact with go without a lawyer. And a good chunk of the remaining 15% only use a lawyer because they have access to a willing lawyer-helper.

Is 501c3 required? No. Recommended? Yes.

If you're not a 501c3, you tend to be a bit more informal and often (but not always) more of a "club" of your school. Donations to you are most often not tax deductible and some grants and the like can be more difficult to get. But there are arguments (mainly simplicity) the other way, as well.

Tim

I agree with Tim that the 501(c)(3) does not require a lawyer (unless you have one that will donate his/her services). But it's not a trivial application process. You need a detailed person who is willing to chip away until it's done.

The process of completing the application is actually a very instructive excercise because it makes you think about what your organization is, its goals, and how it operates. However, the long application form can indeed be frustrating.

PTO Today, with its paid membership, offers some excellent resource materials to streamline the application. Also, members of this forum will help you with free advice. So you have options.