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