Question: Can the PTO hold monies collected from an event that was to go towards a purpose?

Can the PTO hold monies collected from an event that was to go towards a purpose? Our PTO collected funds during an event that was held in March – April 2011 (2010-11) school year. As of November 3rd, the proceeds from this event was not paid out towards it’s purpose i.e. School Library. As of our PTO meeting of November 3rd, I asked the PTO as to why this fund (monies) was not distributed according to its purpose, and received (5) different responses that gave no logical reasoning, other than the PTO wants to control the spending of these funds. Does the PTO not trust those they support i.e. their school? All the PTO has to do is ask that the school generate a financial report reflecting the amount of the funds that was distributed. Simple! My question is…with the Federal, State, and BOE guidelines is the PTO in any kind of violation to this specific issue? If so, please direct me to that source, so that I may be able to give light on both sides.

Asked by lphilley



Advice from PTO Today

Craig writes:
From your description, it doesn't sound like the PTO is violating any IRS rules for nonprofits. I can't speak to your own state or local regulations, but it seems unlikely there is any violation there, either. If the school promoted the fundraiser as having a single purpose -- for example "100% of your donation will go toward buying books for the school library" -- then the money should be used for that purpose. There's no requirement that I know of for the money to be spent (given to the school) within a certain time period after it's raised. And if the purpose of the fundraiser was only discussed internally -- ie the board agreed that the funds would be used for the school library but the fundraiser was just promoted as a regular PTO fundraiser to the general parent population -- the PTO isn't obligated in any regulatory sense to use the money for the original purpose; it's free to allocate the funds as needed.

Community Advice

lphilley writes:
Craig, Thank you so much for responding and your help.

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