Question: Share nonprofit status for teachers' fundraiser?

Our PTO was recently approved for 501(c)(3) status. This fall, we will be hosting a fall carnival that is designed as a family fun event, not a fundraiser. The only money raised will be from baskets that each teacher creates for the auction. The money raised will go directly to the teachers, not the PTO. Several of the teachers have asked us for our 501(c)(3) number so they can solicit donations for their teacher baskets. We do not feel comfortable doing this since the donations are not for the PTO. Should we give out the number?

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Advice from PTO Today

Elly writes:

As long as any funds collected in their fundraiser are used to advance your group’s tax-exempt purposes (helping the students and the school), then Elly thinks it’s fine to honor their request. On the other hand, if the teachers are collecting funds to buy a personal gift or make a major monetary donation to a retiring colleague, that would be a different matter. Elly would tell you to say no to any requests along those lines because those activities don’t necessarily fall within your group’s exempt purposes.

Elly also wants to clarify that the teachers would not use a 501(c)(3) number; instead, most donors will ask for a copy of your determination letter—and possibly your employer identification number (EIN)—from the IRS. Be sure your PTO has both documents on file.

Elly says it never hurts to ask when your PTO has doubts about the proper use of its tax-exempt status. If your group is unsure about whether an activity is appropriate to your 501(c)(3) status, you can contact the IRS tax-exempt help line at 877-829-5500. You may also find it helpful to read the agency’s Compliance Guide for 501(c)(3) Public Charities, which outlines the activities that may jeopardize a charity’s nonprofit status.

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