Jeff,
Dave has given you a tremendous amount of terrific info, but I differ in one aspect from Dave. Our Articles of Association is a one page outline for organizing our group and giving it a birthdate as a PTO. Our bylaws answer the questions you have about how things are done. Both Dave's way and our way will work for you. We successfully filed for non-profit status, so I know our ducks are in a row. [img]smile.gif[/img]
If you'd like to see what we have as an example, send me an email. This email address is being protected from spambots. You need JavaScript enabled to view it.

Jeff,

There are two great articles from the PTO Today magazine that you need to read. One deals with to incorporate or not and the other is about federal tax exemption. I believe you will find them in the archive section. There are pros and cons to incorporation and tax exemption these articles do a great job of covering them.

Tax exemption comes from the IRS and if that is approved the state normally recognizes it, again it is a state by state issue, but I am pretty sure that WI follows that form. That said though state tax exemption does not mean you are exempt from paying all state taxes, Ohio as we have found out has some (IMHO) rather strange laws on this about its sales tax.

Typically the process used for all this follows this type of form (subject to state laws of course):

1. Create the organization - Articles of Incorporation (if you incorporate) and/or articles of organization. These can be one and the same and you can choose to organize and not incorporate and then later down the road incorporate. You need to be familar with the state and federal laws when creating the documents.
2. File for a Federal Employee Identification number. This is your organizations Social Security number used to identify you to the IRS.
3. Obtain the forms to file for 501(c)(3) status.
4. Complete the application (1023) for non profit status. There are a couple of decissions to be made here on how to file so read publication 557 carefully to know which applies to you.
5. File the 1023 the date you send it in starts a clock for you. Once you recieve your letter approving your organization as a non profit you are, if you have to resubmit because of insufficient information do so promptly - remember that clock that started? You will be able to go back and everything you did fromt hat date to the date of approval provided it falls within that clock will be as a non profit. But you may not act as a non profit until the IRS says you are so dont represent yourself as such until that time.
6. There may be post state filing requirements to complete state requirements most states want you to tell them that you are now an approved non profit organization.
7. Always file your 990 each year even if you do not hit the minimums required for filing once you are an approved non profit. Otherwise you may find yourself dropped off without your knowing it and you will have to refile.

Exception to all this is contained in Publication 557 - if your organization has gross reciepts under 5,000 a year.

That is a quick veiw of the process again you will have to ceck the state requirements because it will affect some of the language you use in your organizing document. Once you get publication 557 and have a few hours to spend reading it you will understand more of what I am talking about here.

What I meant by not rushing is non of this has to be done next week. Take your time and understand all that is involved and get as many people involved as you can, it will go much easier with help.

When we wrote our new Charter of Organization I had one person trying to rush it through. If we had done what they wanted to do we would have had it finished in a month and it would have been worse than having nothing at all. As it is we took 3 months writting. changing, modifying, thnking, arguing, tearing our hair out reading a lot of law - then once the committee was happy it was presented to the board which made a couple of minor modifications after more than 2 hours of debate. A month later it was presented to the general membership in a very formal meeting for an up or down vote. Because the committee did its homework, becaise the board spent the time debating, and because we had a lot of people who cared, the membership approved in without a single nay vote. It is a lot of work, but it is work that has to be clearly thought out and you and many other people are going to become experts in a lot of areas I bet you never thought for a second you would ever need to be

Dave,

Thanks for all the information. I'm finding as I dig more and more into all this PTO "stuff", that there is so much I don't know and wouldn't have known had I not gotten involved. As I talk to more and more people, I keep picking up little tidbits of information that I didn't have before.

To answer your last question about standing aside from all this for the majority: yes I would be willing to do that if I didn't believe the majority was being swayed to vote. Funny thing is this, all we've heard from the past board is how few people were willing to be involved with the PTO the last couple of years. Suddenly we're getting twice the people they ever got to come to meetings and ironically, all these new people happen to be friends with the old board members and vote exactly as they do. They don't even have their own opinions about why they vote the way they do. I'm not the only one who has noticed this......the other board members have mentioned the same thing to me as well the Principal and some of the teachers who show up.

My main reason for wanting to amend our by-laws is because they don't provide any guidelines for anything. I don't want to copy anyone else's laws or articles but just having read some of them shows me that there are huge loopholes in ours that need to be tightened up. To tell someone "we're doing it this way cause that's how it's always been done" doesn't work for me. From what the previous board tells us, we (the PTO Board) actually have no power to do anything. They even tell us we have to vote at a PTO meeting to form a committee. Not sure how they got anything done last year cause they held their meetings every other month. We have changed them this year to every month (of course our two previous board members voted against that). I merely want to make sure that when a question arises as to a procedure or how things are supposed to be done, we have it down in our bylaws.

I'm not in a huge rush to get all this done as I've heard a rumor I may be pushed for VP or Pres for next year. I'd like to accomplish a good portion of this by the end of this school year.

I'm also working with the State of Wisconsin to see what we have to do to obtain a Tax Exempt Status. Do you know, would we have to get a state exemption and a Federal Exemption as well? The IRS paperwork is quite lengthy from what I've seen so far. Are there any huge benefits to being tax exempt? I'm also looking to get out from under the school districts ID # so we can become our own entity and be separate from the district. Any thoughts about that? We are a very small school (about 250 students) and we're in a relatively poor neighborhood.

Thanks again for you response Dave. Appreciate all the help I can get.

Jeff

The basic answer to your questions is yes! You can form a committee or anything else to write new Articles of Organization (regardless of what you call them) and then submit them to the membership for approval. Normally the memebrsip vote is an up or down vote. We ourselves have done this this year and our new Charter is functiooning very well.

I would suggest that except for form, do not copy the various by laws you will find running around, although using them as a very general guideline is hlpful. One of the things you all will need to decide is if you want to be a non profit organization if you do there is specific language that you will need to include required by the IRS. Also someone on you committee will need to explore your state laws concerning non profits and corporate law; also do not forget sales tax information, requirements, etc.

There is a lot that goes into this. One of the key things you will need to decide early on is will the by laws be very specific as to duties and other micro details or will some other process work best for you.

The key is to take your time, there is no rush, gather your information, get as many opinions as you can, get people involved, create a document that will work best for your school and organization, and not a copy of someone elses that may leave you wanting down the road.

As for joining the NPN on your dime. I would recommend not to do it. If the organization is not willing to pay such a small amount to oin then they will nto take advantage of the things the NPN offers anyway so why waste your own money?

I would suggest to get your house in order first, the by laws, then come back and explore the NPN, once the organization (parents and teachers) understand the organization is a legal entity and treat it as one (which a new organizing document shuld help with) then the other things will follow.

But here is one more thought, what if the organization is happy with what they have already and dont want to rewrite the rules? Are you willing to give this up to the majority opinion?

Food for thought [img]smile.gif[/img]

Dave

I am the new Treasurer for our PTO and I know the President should probably be researching all this but I've found myself becoming very interested in the "legalities" of our PTO. Our current bylaws cover about one page when typed correctly. Our listed purpose is reads just like the schools. There is a section mentioning the officers (Pres, VP, Treas and Sec), when meetings are held, terms of office and where meetings are held. That is it!!! There is no reference to voting procedures, forming of committees, how money is raised and who can approve the spending, who handles the money or audit procedures, who can sign checks, etc. Plain and simple, our bylaws contain no rules or governing laws of any sort. We operate under the schools tax ID, we're not incorporated and the previous administration ran the checkbook under the past Treasurers personal SSN.

My question is this: Since the bylaws do not say anything about forming committees, could the existing PTO Board form an executive committee to propose and and accept new bylaws that would govern the board and provide a direction to be followed? My thoughts are this: form an executive committee consisting of the 4 board members, the Principal, one parent and one teacher. We would have representation from all aspects who would benefit from anything the PTO does.

The reason I'm doing this is because a couple of the past board members return to every meeting and anything that the PTO tries to do, we can't because they bring friends and relatives to vote against everything. We're a small school and the majority of our school is made up of "less fortunate" families so we don't have alot of money and we don't make alot of money on our fund raisers. We're trying to find ways to improve that but the past board members even vote against doing an additional fund raiser. In the past they have done one fundraiser a year. They did one this school year before we were voted in and they started it two weeks after school started and it only lasted a week. Then they were disappointed by the poor performance of it. DUH!!

Another agenda for me is to join the NPN but I'm sure I'll have a hard time getting those same members to approve an expenditure of $180 for this. Maybe I'll just have to foot the bill myself.

Sorry for rambling but I'm very frustrated over the lack of power that we currently have as board members. I want to make sure that before we change the bylaws that we can do it. There's nothing in the past bylaws that gives a procedure for changing the bylaws (i.e. board or entire membership vote).

Please help me if you can.

Thanks