This is a little girl whom had a very bad accident and we almost lost her. Due to the fact that she will need pretty extensive physical therapy, one of her parents will be out of work for a while. I believe both parents work (although seperated)and they have some kind of insurance. Cans have been put out around and the PTO is now planning on having a benefit supper to raise funds for them. Is this legal? I'm a little afraid it may set us up in the future for all kinds of things. In the past we have even been leary of spending on a specific grade. I'm all for helping people and I don't think the amount spent to have the dinner will be too much, I'm just concerned what may come out of the woodwork from spending PTO funds on one child?
Thanks for your help!

We have a line item on our budget for things like this. We call the line item welfare and it can be used if a kid needs glass, a winter coat, gloves, etc. Things that are essential.

During this past year a teacher came to us hoping we could help a little boy in his class. We have helped the family before with uniforms (we have a recycle program) but this time the need was greater, his glasses were so out of date the teacher was concerned.
After a free exam the doctor called our President and told her he really needed our help as the glasses he was wearing were donated by the Lions club and making his eyes worse. SO $60 later the family left the eye doctor (by the way, THOSE WERE THE CHEAP GLASSES- his eyes were so bad!) beaming.

Not only did the membership want to do this but one mom wanted to keep tabs on the boy and help the family herself this fall. We felt we not only helped the boy, but his Mom, the teacher and the class!

Now as far as raising funds...that's the million dollar head scratcher for me.

I'm not a lawyer, but here's my understanding...

Yes, a non-profit can expend funds to benefit a single child if the activity in question supports the non-profits' mission AND if it isn't for the direct benefit one of the stakeholders that has influence over the operation of the organization. (Not to say, for example, a board members' child would always be exempt from any such awards, but in such a case, you better have all the t's crossed and i's dotted and the member in question should abstain from any part in the decision making.)

So again, we are back to legality versus policy. Can you? Yes. Should you? Depends.

In general, PTO's try to expend their funds to benefit the majority of children, so you'd have to be certain that whatever you do had the support of your membership.

Here's some of the IRS language...

The organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of an IRC Section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction.

[ 06-03-2004, 09:21 AM: Message edited by: JHB ]

Can a PTO (not PTA) spend money and/or raise funds to benefit one child, if there is nothing in the bylaws that says they can't?