I'm currently the president of the PTA for my kids elementary school in Royal Oak, Michigan and our members are seriously considering switching to a PTO. I've spoken with the state rep regarding this situation and we are abiding by their requests. My question to any new PTO converting from a PTA is this: How long did the process from application to approval take for your 501c3 status? Is there a chance that it would not be approved?
Thank you for your help and I may have other questions as they come up.

Hi mabes -

Couple of reactions/questions:

1. I'm interested to know what requests you're abiding by. What requests/demands were made?

2. The approval process for getting your 501(c)(3)may take several months, but the most importnat thing to note is that -- once approved -- your 501c3 will be retroactive to your date of application. If you're starting an entirely new group (the way I'd recommend you go), then you actually have 27 months to get approved, and -- once approved -- the 501c3 is retroactive to the day you started your group. Sooooo, provided you apply relatively soon after you get your PTO started, then there's a very good chance of there being no gap in your nonprofit status at all.

The experts I've consulted report that the vast, vast majority of PTOs are approved. (I've personally never heard of a single denial). There's a certain percentage of applicants that don't gain the 501c3 status, but in almost all cases that's because the applicant didn't complete the process, not because the IRS denied.

As a side note, the first "Expert Guide" available through our new National PTO Network (www.PTOtoday.com/npn) is called "PTO Start-Up" and it covers the incorporation and 501c3 process (and much more!) in great detail.

Hope that helps.

Tim

Tim, thanks for your help. Yes it all helps when you're just starting this stuff from scratch. We're abiding by the bylaws of the PTA regarding disbandment (general membership voting on issue, surrendering materials and closing bank accounts). They make it sound like their throwing us to the wolves and we will be orphaned for life. I think we have a pretty good handle on things- right now we're waiting for the vote ( which I think is just a technicality)and all the other paper work is being sent (501c3). So if you have any other suggestions or comments I would love to hear them.
Again Tim thanks for your help- wish me luck!
Lori

just a question to those switching from pta to pto. If you abide by the by-laws and notified PTA that you were considering disbandment. Did they come to your general membership meeting? If so how did that go over. Let me know... that is what we are waiting on now. Our general meeting is in a couple of weeks, however we have no general membership except the board as all others have expired and no one interested in joining if we are planning to switch . so.......
:eek:

I was told by the state rep. that she just needed to meet with the elected board before the meeting where the subject will be voted on. She already surmised that the general membership was behind us otherwise we wouldn't have give our recommendation to disband. Also we were told that all memberships with the PTA from last year are good till 9-30-02 AND good for 30 days after that to vote on any issues relating to the PTA. That info. came from the state rep. (we didn't want to sell any new memberships either). But we also didn't want to exclude new families from being able to vote on the PTA vs. PTO issue so we are offering only them (new families) memberships- then sending their dues to the state (as required by the bylaws) and when we switch to a PTO those people already signed up don't have to do so again. Hope this helps.
Lori

Tim, I was hoping you could help me out regarding something. The state rep. told me since the money in the PTA account belongs to the members- meaning all our dues have been paid and we don't owe the PTA anything- that all we would have to do when we disband is transfer the funds to the new PTO account that we set up (after I get our tax id#). We would close the PTA accounts, show a zero balance and turn over our books. We would then apply for 501c3 status figuring we may have to pay the tax on our interest earned during the period we're waiting for approval. Does this sound correct? If the PTA is saying the money is ours to do with what we want why can't we just transfer to a new account?
Thanks for the help.
Lori