You really should have this designation. If you don't have it, then legally you're a for-profit business and would need to fill out tax forms (and pay business taxes!).
It's not a huge amount of work to keep up with, once you've been through the filing process. It takes me about 6-8 hours over two weekends to do the elementary school IRS and state forms each year, starting from a Quicken spending report. Much of that time is sorting the income and expenses into the proper line items on the IRS report.
HI Miranda,
There are lots of good reasons to go for 501(c)(3) status. If your group is keeping up to date on its financials, the annual work it will need to do is very manageable. Here's a great article on the tax return process. There are fairly simple forms your group will need to fill out each year.
Our PTO is considering applying for 501c3 status. Members are concerned with the amount of annual work that will be involved with filing tax forms once we have achieved our status.
Are there any other groups or members who have achieved nonprofit status, and could tell me about the annual upkeep of the designation? Is it worth it to have this designation?
We hope to use it to increase tax deductible donations and gain more grant funding opportunities to expand our school's reach in the community.
