PTO Today

Board newbie here and I could use some help!

Background:
I am the newly elected President to our parent/teacher group. The group was a PTA 3 years ago but it disassociated from them to become a non-PTA parent/teacher group (PTO). Although, our group is not called a "PTO;" It goes by a different acronym. Ever since the departure from the PTA, the group has really been suffering from all of the following: poor leadership, lack of organization, lack of recognition from the parents in the school, lack of participation from parents in the school, and lack of respect from other schools/PTO's in the district. Because the previous President was such a poor leader, the Principal ended up assuming the leadership role of the parent/teacher group---She basically ran and organized everything for the past 2 years. When I agreed to take on the role as President, the principal communicated to me that she'd like to see the group take the more traditional role of a PTO where she's not involved in running it. So, now it's my job to start cleaning up the mess that has been created over the past 2 years.


I can face the challenge that is before me but I do need some advice with the following questions:

1. I plan on proposing the idea that we officially change our name to a PTO. Is there anything special that I need to do or consider before making such a suggestion? Is there anything I need to do after the change is approved?
2. Do all PTOs have to incorporate themselves? Do all PTOs have to apply for non-profit status?
3. If we don't incorporate or apply for non-profit status, can we cover ourselves under the school's non-profit status and EIN?
4. What about taxes and the IRS? Do all PTOs file annual taxes with the IRS? If not, how do I know if ours has to?
5. Is there anything else I need to consider or recognize?


I apologize for the length of this post---As you can see I just want to make sure I'm considering all angles. Any answers or advice I can get would be greatly appreciated! Thanks in advance for your help!

1) "PTO" is probably the most common name for parent groups not affiliated with the PTA. But lots of groups use other names also. There's nothing to prevent you from adopting this name as long as you follow your own bylaws for changing the name (or are creating a new organization.)

2)In most state, incorporating as a non-profit is pretty simple and costs a token amount (maybe $25). It's worth it because it reduces the personal liability of your officers to have the organization become a legal entity instead of a collection of individiduals. You need to see the rules in YOUR state.

3)Operating as a non-profit. If you are basically a volunteer committee of the school and do not control your funds independently, then you can possibly operate under their umbrella. But if you make your own decisions and manage your own funds, then you are independent. If your group brings in (gross, not net) more than $5000 per year, the IRS says you should formalize your group and file for 501(c)(3) status. There are many benefits to doing so, but there are costs in terms of time, effort and the one-time fee of $750. It's not a trivial task; however, many of us that post here have successfully filed.

4. Taxes - once set up properly, most PTOs file an annual informational return called a 990EZ. It provides required information on your operations, but normally a PTO doesn't have to pay any federal income tax.

5. Other - one of the steps will be getting set up as sales tax exempt in your state. That doesn't necessarily mean you avoid ALL sales tax, but it helps.

Browse through the forum postings and ask questions. Lots of folks here will help you.

[ 11-16-2006, 09:36 PM: Message edited by: JHB ]