I guess a critical part of the equation is whether or not the families in this program are part of the PTO stakeholders. Can their parents be members? If not, why not? I'm not clear WHY they wouldn't be. Do the children physically reside in your building? If the PTO plants flowers, purchase a new sound system, have a staff appreciation luncheon, do they (or their teachers) benefit?

For instance, in our district they've placed a particular pre-school special needs program at one of the 16 elementary schools. It's very much a part of our campus, even though the funding and academic accountability for group is different. And, to be honest, the parents are often too overwhelmed with their home situation be to involved in PTO, and the kids can't really help with fundraisers. But that doesn't matter. They attend class at our school and are considered part of it.

It does all go back to "can you tie the activity to your stated mission?".

Allys5 - I think you see that the group here, while not always sharing the same opinion, is generous about trying to help. However, you do need to post your question one time, with a relevent subject line, so that members can respond most efficiently.

sure you can;130000 wrote: Seemed to me like the question was not if I want to be nice and help someone out but rather is this legal to do and yes it is legal for a 501c3 to run money through their organization for "special projects" or routine maintence of other organizations.

I don't see how you can make a blanket statement like this. When the IRS grants someone a tax exemption, it is based on the purpose of their organization. Your foundation's purpose may be to serve as an umbrella organization for several school based groups, and that's fine--for your group.

We probably don't have all the facts of allys5 case, and her situation may be different, but most parent groups have a purpose which is very specific and directly related to serving the students of their particular school. I understood from her posts that they were being asked to hold money for a playground for a different school that just happened to be located on their school's property, and that they were unable to even use that playground or really have any control over how the money was disbursed--they were just told, by the other school, when to disburse checks. That's doing nothing more than functioning as a bank, and would most likely not be a part of their mission statement.

Let's say for argument's sake that the normal annual budget for allys5's group is $25k. Then this big donation comes along, and they have to list it as revenue on their tax return, along with the various construction expenses. And they go and list all their program services and they list things like funded one field trip for students in each grade level of the school to enhance educational experience, provided cultural arts shows for students in grades 4 through 6 to supplement music education, etc., etc. Then they have to explain this huge expense for a playground which has no benefit to their students....?

As JHB mentioned, it's possible that the playground is open to the general public or to other grades where maybe allys5's school can take advantage of it, so there may be a way to finesse it. At our school, the preschool (which is a part of the elementary school--not separate at all) playground is completely fenced in and separated from the other school playground, and not open to the general public, for safety/insurance reasons. So, it's also possible that this preschool playground that belongs to the other school is not open to students of allys5's school at all.

You bring up a good question in regards to the district holding the money. I think there is an issue there somewhere. When our Education Foundation was started the fact that other groups would be going through us for the 501c3 status and not the district was very inportant. I am pretty sure the district, at least ours, had issues with preforming the task of guardian. I am sorry I don't have that answer as to why(leagl or choice)

The sophistacation of the Education Foundation may be greater but some PTO's, including ours, could handle the situation. No reason to be unable unless you are uncapable.

I am sure the school with the questions will make a choice that best suits them.

It may be legal but I still have a concern with any group outside the school to put their money in a pto account as it could turn into a huge headache. Sure you can I would believe that your foundation is more experience in money coming in and out from different groups than a PTO would be. PTO"s generally raise the money that goes in their accounts and they spend that money. I still go back to the main thing, why are they not asking the school district to hold it in the districts account? why the pto? If it is a part of the district persay it seems the district would be willing to hold money for them...just my thinking.

Pals, I can't answer why they would want to, only their organization can. That would truly be a decision for their board and I am sure they would follow their mission statement.

I see no difference in an Education Foundation's 501c3 staus verses a PTO's 501c3 status. All the non 501c3's are looking for is the designation for the tax deductible designation. Bylaws and the board's vote will dictate the situation and the outcome.

Our Foundation operates much like a PTO, we raise funds(despite where they come from) and dispurse some and invest some.

Seemed to me like the question was not if I want to be nice and help someone out but rather is this legal to do and yes it is legal for a 501c3 to run money through their organization for "special projects" or routine maintence of other organizations. The 501c3 has the burden(legal, financial) for managing the funds, that is what they signed up for.

I see no problem for a PTO to do the same if that's what they are OK with.

Copied in from other duplicate thread:

mum24kids;129960 wrote: I disagree with WFS here. If they are saying that they need it deposited to a 501(c)3, then I think they're in a situation where they have a donor who wants to deduct this $3k as a charitable contribution. Since the preschool is not a 501(c)3, they wouldn't be able to provide the donor with the documentation he needs to deduct this.

I doubt they're trying to avoid paying taxes; they probably just weren't smart enough to set themselves up as a charitable organization.

The $75,000 donation from last year is huge!!!! Your group must have had the responsibility to send a thank you letter to whomever it came from, right? Your PTO should have included that on your tax return, along with all the expenses. I don't know what your annual budget is (excluding all this non-affiliated preschool stuff), but taking in all that money when it presumably had nothing to do with your organization's charitable mission is the type of thing that could jeopardize a group's exempt status. What this group is doing isn't illegal, but it could cause major problems for your group.

I agree with mum24kids UNLESS the PTO truly is a partner on this project. Even though the pre-school program is federally funded, they are a part of your campus. The children could certainly be included in the PTO's stakeholders. The new playground may be specifically for them but is bound to improve the school in general. Won't others - like Kindergartners be able to use it at a different time?

You said the Principal and PTO President accepted the initial funds. That sounds like a joint effort. If the PTO is proceeding as a partner on this project and willing to undertake the administrative burden, then managing the money could be within their mission. If they are merely "holding the money", then could be a problem.