Our school is just starting the process of converting from a PTA to a PTO. One of our big questions is how do you transfer the balance of the PTA account to the new PTO account?
Thank You
Lisa

As far as I know we couldn't so instead we "spent" the money by making a check to the school for the Principal to use and he used it for what ever we wanted. I do remember having to "use up" the money.

Duffy
Not sure why I think legal mumbo but our treasurer handled it. Maybe ask a Tax person.

Hi lkulback -

Depends on several factors:

1. Where are you in the process? If you have lots of time before the actual/official disbandment of your PTA, then easiest thing to do is just spend down the PTA funds to zero heading up to that date.

2.What state are you in? How officious is your state PTA? If you're not getting any guff (as you shouldn't), then a simple transfer will probably work. If you expect to take some guff, then that kind of transfer can be a lightning-rod for controversy. If you're expecting questions, then you may be better off donating the funds to your school. Six months later, if you're school decides to donate the funds to your new PTO, they can do that (but know that funds will be the school's and there's no guarantee you'll get that second donation.)

3. Is your new PTO up-and-running and in 501(c)(3) process? Most PTA disbandment (and more importantly all IRS 501(c)(3) disbandment) procedures require that funds remaining when a 501 is disbanded go toward another 501. If your new PTO isn't going to be a 501, then I would counsel against transferring from the PTA to the PTO.

No matter your situation, there are several ways to make sure that your school and your kids get to see the benefits of the funds. There's no way you should lose even $1.

Good luck,

Tim

Ikulback,

You can't legally transfer the money from a PTA to a PTO. Because a PTA is a 501(c)3 organization and part of the National PTA's umbrella group, there are very specific guidelines on how to get rid of any remaining funds if a PTA ceases operations. You could get into very hot legal waters by transferring the money, so you're best off, as others have suggested, to spend the money within the guidelines of the existing PTA budget. Otherwise, consult your state PTA before doing anything else with the money.

Originally posted by Jan V.:
Ikulback,

You can't legally transfer the money from a PTA to a PTO. Not always true, JanV. For the most part, the IRS regs require that the leftover assets of a 501c3 go to another 501c3. And many PTOs are 501c3. If a disbanding PTA sent its leftover assets to a newly formed (official 501c3) PTO -- especially one with exact/nearly same mission/beneficiary as the original PTA -- then IRS likely would see that as fine.

Tim

Tim - I am in the same district as lkulback and therefore am still a bit unclear about the tranfer of funds. The new PTO will be a 501 (c)3 prior to the actual tranfer of funds from PTA to PTO account. Won't that then enable us to legally make the shift from one to another. We are not planning to formally disafiliate from NJ PTA until after the fund transfer has taken place. Is that what you cwould recommend. Spending down is out f the question as we have an ongoing playground fundraising project underway and we are about half way there.
Thanks,
pabrocc