I appreciate the input. Your point about opening the floodgates and being in the middle is a good one, one that I actually keep coming back to as one the best reasons to find try to a different solution. At this point, our board opted not to accept the donations. The school will accept them; however, the money is going to be used to support any extra expenses for the kids, not the parents. Amazing how something that seemed straightforward ended up complicated!
Sounds just like Odyssey of the Mind. I know some others on this board have had experience with that, so maybe they'll chime in.
For something like that, which is still education related, you certainly wouldn't have the issue of jeopardizing your tax exempt status. I also think you could document it such that you wouldn't need to include the income and expenses as such on your tax return; it's really not anything that's income and expense to your organization, and much different from, say, selling spiritwear. I'm assuming the parents want to do this as a convenience, and not to be able to have donors write off the donations on their taxes--that raises a different set of issues.
But...I still don't think I would do it. For one, I'd be afraid of opening the floodgates. For another, if there's some dispute in how the money is to get distributed for some reason, you end up in the middle of some mess you have no business being in. Finally, with parents out there soliciting donations from who knows where, you have no control over what they are telling potential donors; one of the donors could come back to you and ask for their money back if they were mislead in some way.
And it's just not that difficult for the parents to open an account to do this. They can probably make do with the temporary checks they get when they open the bank account, and they can get a separate tax id number easily enough so no one person has to put their social security number on it.
We actually did the Jump for Heart, and were careful that people understood that the money was to go straight to AHA.
I'm sorry that I didn't give more explanation. The donations that we have been asked to run through our books are donations that would go to help parents offset their own travel costs to accompany their children to a competition later this month. The children and one of the parent sponsors has been paid for, through another source. The parents decided to solicit donation to help pay for themselves, and asked our group to be the keeper of the money, and then distribute it accordingly. It's a different kind of situation than I have ever run across, so I'm trying to get some feedback, because I'm sure something like it will come up again!
The closest analogy I can come up with for this is the American Heart Association's (AHA) Hoops for Heart or Jump Rope for Heart program. Schools and/or parent groups regularly sponsor these programs, but the money raised is for the benefit of the AHA.
What everyone will tell you, though, about this type of arrangement is that it is critical that the checks be made payable to the organization who ultimately benefits--in this case, the AHA. Otherwise, there are two problems. The first is that all that money coming in to your PTA/PTO is counted as your receipts, and you will have to include it as income in your tax return. The second is that (specifically using this AHA example) raising money for heart research is most likely not in your mission statement as a PTA/PTO, and you could be jeopardizing your tax exempt status. The second problem is actually highly unlikely; the first is the bigger issue.
Hard to tell you much more without knowing specifics; I hope you can relate this example to your situation.
Is anyone out there whose PTA/PTO has accepted donations from outside groups, with the stipulation that the donations are to be used to support/fund/reimburse a specific group that is not sponsored by the PTA/PTO? I'm trying to work through what I'd like to do to help, vs. what might be trouble down the road. Any thoughts, feedback, etc., would be appreciated.
