Question: Charity questions

If your organization has a 501C-3 status are you legally allowed to give some of the monies raised to emergency cases to families within the school? Such as a fire, death, etc? Also, if you hold a small game license are you allowed to use the license to hold a benefit for family of the school? Where all money raised will be given to the family.

Asked by Anonymous



Advice from PTO Today

Craig writes:
There isn't a yes or no answer. There are two issues at play:

1. The IRS wants you to spend your money in line with your mission. Does this fit under your mission statement?

2. The IRS is very concerned about "private benefit" -- that money you raise not benefit in a significant way an officer or board member.

If your group normally raise $15,000 and you donate $100 to a family in need, that's not likely to raise an issue. If you donate $1,500, that could be a problem, in particular if the beneficiary is an officer.

It's safer to take up a collection among group members and make that separately from PTO funds.

Another way to handle such situations is to create a discretionary fund for the principal to use for families in need. He makes the decisions on who gets the money and how much. You simply provide the funds as a budget item.

Regarding the gaming license, that's governed by state and/or local rules. You might start by checking with your town clerk.

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