We had a fire at an apartment complex directly across the street from our school, displacing about 30 familes. Several of our school families live in the complex, although I don't think there were any in building that burned.

Yesterday, our current PTO co-presidents sent home a very nice note explaining that it was an opportunity for the students to help people in need and in showing community spirit, so they were encouraging families to donate cash to a Red Cross Fund set up for that apartment fire and that money would be collected at school this week for anyone who wanted to contribute. The note also directed people where they could take donations of food and household items (to a separate group handling that).

In my opinion, that's a good example of a role the PTO could play. It benefits those in need, fits our goal of school/community spirit, but doesn't put us in the middle of dispensing funds. (None of this will go through the PTO account - it will be sent directly to the Red Cross.)

I would encourage your group to try to help the family in need with personal contributions. Maybe some folks in your group would be willing to contribute privately, and not through your PTO. One thing that you will have to consider is being a non-profit, any time money is disbursed, that becomes public knowledge for the entire membership. Even if you request that it be kept private so as not to embarrass the needy family, you will absolutely have at least one big mouth that will tell everyone they know (speaking from experience when I asked people on my board to shut their traps about a sensitive issue-one didn't-got on her cell phone as soon as she left the meeting) if it gets out who the family is, you would not want them to be embarrassed. Maybe your group could raid your closets, or some of you would be willing to contribute gift certificates to the grocery store, etc. It is amazing what a group of truly caring parents can accomplish when their hearts are in the right place. I would give your new Pres credit for her compassion, and try to help her without going through the PTO. Good Luck!

What I have been told is that this often gets erroneously interpreted to mean a non-profit cannot help an individual by giving them money or goods. It's been explained to me that this is NOT true.

(I too am not a lawyer or accountant)
It is not necessarily true based on being a 501c3 alone. It is the purposes that were set forth when you established your 501c3 that establishes what your capabilities are.
If you were set up to be a charitable organization to assist others, like those that provide assistance with rent or other financial assistance, then it is not true.
However, if you are established for another purpose, to promote education etc, then that is the primary legal purpose of your group.
You can't just change that by changing the bylaws.
You can read the explanation from the IRS here
www.irs.gov/charities/charitable/article/0,,id=96099,00.html
Thought it was kinda funny that international amateur sports competition is a listed purpose... [img]smile.gif[/img]

I have to agree with JHB...to help one family opens your doors to so many others. It is a hard decision to say no, only you know whether it may backfire into "well you gave to this family". I know there are alot of schools that do things around the holidays as far as giving to less fortunate in their school. Maybe someone can give you tips about that. We have had this come up and it was tough but we only raise so much money and it all goes back into family fun nights and projects that go school wide.

This is a tricky one - and let me start by explaining I am not a lawyer or accountant.

The Internal Revenue Code allows for tax exempt status for many types of organizations which operate for various nonprofit purposes. Generally, no part of the net earnings of such organizations "may inure to the benefit of any private individual or shareholders or the organization".

In*ure"\, v. i. To pass into use; to take or have effect; to be applied; to serve to the use or benefit of; as, a gift of lands inures to the heirs.

What I have been told is that this often gets erroneously interpreted to mean a non-profit cannot help an individual by giving them money or goods. It's been explained to me that this is NOT true. Obviously there are lots of non-profits that provide rent assistance, food, clothing allowances, supplemental funds, etc. for individuals.

The clause is supposed to prohibit a non-profit to be set up as a shell simply to funnel money/assets to an organizer or stakeholder in an unacceptable manner.

So you have to go back to your mission and your internal policies. In our case, we might well give a school T-shirt or a set of school supplies to a needy student. Yes, that benefits an individual, but in a way that our mission supports.

In our PTO, we do not provide FUNDS to our families. It's not what we were set up to do, and the consequences of setting such a precedent are too high. If you do it this time, how would you turn someone down next time? Who would qualify? What are your criteria?

If you get into this, it would need to be tied to your mission and available in a fair way to anyone who meets the criteria you set.

I don't think it's an activity many of us here would support.

[ 09-14-2004, 07:35 PM: Message edited by: JHB ]

I am the treasurer of our school's PTO. We have a new president this year and she is very well-intentioned and enthusiastic. However, she wanted to give money to a family in need I and our accountant said no, we cannot do that since we have tax exempt status and we cannot give directly to individuals. Now she wants to revise our by-laws so we may make such contributions in the future. I do not believe this is a good idea as all monies should be strictly for school/kids. Can anyone point me to a rule/law that states that we can/cannot do this?

Thanks.