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How much $ does your PTO have?`

6 years 6 months ago #172038 by Margaret Wittig
Replied by Margaret Wittig on topic How much $ does your PTO have?`

fade wrote: This is a question for all the organized and well managed PTO's. Does your PTO have any sort of savings, "emergency funds", or long term goal funds set aside? If so how much?

We had a very rare opportunity to gain money 2 years ago. Both through fundraising for a playground, donation of a companies stock when they went out of business and through a child's memorial fund. Our playground was built but the ground cover was not done because we only had a quarter or what was needed to complete this portion of the project. It was thought that we could use this remaining money as an emergency fund and continue to add to it so in the event the emergency money was never used, we could someday purchase the ground cover, however a few people are complaining. Just wanted some input.

21 years 5 months ago #97251 by TheMetzyMom
Replied by TheMetzyMom on topic RE: How much $ does your PTO have?`
WOW! Thanks for the correction. I was under the impression that it was a 'no no' with the IRS. Maybe I got my wires mixed up. Maybe it is just most groups who consider it a 'no no'. My guess would be that most groups figure the kids this year raised it and it should be spent on them. Either way, I apologize for my inaccurate response.
21 years 5 months ago #97250 by Rockne
Hey Metz -

I don't think that is true. Not a lawyer, but I don't believe that there is any prohibition against 501(c)(3)s utilizing interest-bearing savings accounts.

Remember, there are huge 501(c)(3)s, as well as the many smaller groups. The rules are the same for both. These large 501s can have lines of credit and own property/buildings and have significant investments.

The IRS has no problem with 501s being smart (or even just long-term focused) with their money.

Tim

PTO Today Founder
21 years 5 months ago #97249 by TheMetzyMom
Replied by TheMetzyMom on topic RE: How much $ does your PTO have?`
An interest-bearing savings account is somewhat of a 'no-no' for a nonprofit group. I'm sure JHB can give the exact wording, but if I'm not mistaken, you cannot just have money sit from year to year. You raise funds for specific items and the money should be spent on those items. If there is a surplus, it should be revoted on and earmarked for something else. Only earmarked money (example: big expenditures like playgrounds or computer labs, sometimes require more than a one year commitment) should be held over. Start up funds, teacher reimbursement funds, etc. all fall under this catagory. Check your bylaws, and then, more importantly, check the IRS code for 501c3 organizations.
21 years 5 months ago #97248 by Critter
Our Bylaws require that we carryover at least $2,000 each year, but there has always been several thousand more than that. I prefer to spend as much as possible each year, but that requires a very close eye on your budget as the year winds down. As far as "emergency" funds go, NO, we don't have a special account. I agree with keep_on_trying - we have set up a special savings account in the past to hold funds specifically earmarked for a large, multi-year project (play structure). Now we are considering doing the same thing for new school signs. But we would only do that if the money was designated (by vote) for a specific project.

Honestly, what sort of "emergency" does a PTO anticipate?
21 years 5 months ago #97247 by keep_on_trying
Replied by keep_on_trying on topic RE: How much $ does your PTO have?`
Our past president always wanted to keep $6,000-$8,000 in the PTO's savings account. She always said it was good because it would earn interest. Duh!!! Interest for what? She acted like it was her personal savings.

As the current president, I can't see having a big savings account, earning interest, when there are so-o-o-o many needs in the classrooms. The teachers, principal, and the majority of the parents agree with me. I don't mean to bankrupt the PTO, but how can we possibly ask the parents to get involved in any type of fundraiser, stating the PTO needs money, when there is that fat savings account sitting there, earning interest.

It might be a good idea to open a special savings account specifically earmarked for the completion of the playground with a specific dollar amount as your goal. This way your regular savings is available for more immediate needs. You could even designate a certain percentage of your fundraisers to go into the special savings, or do a penny drive, etc., just for the playground.

Hope this helps!
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