Dragonlady - The paperwork to become a 501(c)3 nonprofit looks daunting but it really isn't too bad. If your group decides to file, look for advice on these boards. I've done the paperwork for three PTOs and couldn't have done it without info and advice from lots of folks here. Everyone is sooo helpful!

You are a small group but I feel better about the way you describe your self (as if you needed my permission . It sounds like you are getting organized in the right way and have a good chance to start growing this year. Good for you!

We thought the process was to get 501c3 first, then go for MA Public Charity. This was the recommendation of the pro-bono CPA who helped us get through the processes. Our application for MA PC was basically a cover letter to the Atty Gen with the IRS 501c3 approval letter and a copy of the 501c3 application. I don't know if you can go in the other direction - get the MA PC done first then apply to the IRS. If you are aware of a MA PC application form, then I guess you can do it in either order.

I think most businesses - especially large, multi-state businesses - require the 501c3 to make a donation. So if you want to get donations from them they want to see the 501c3 rather than the state forms (in our experience). This also goes for avoiding state sales tax, they may want to see the ST-2/ST-5 forms but they also want to see the IRS approval.

You are not required to apply for 501c3, however, even if you are incorporated as a MA Public Charity, you will legally be required to file federal taxes on what you raise unless you become a 501c3 Non-Profit. This is because you raise more that $5K (gross receipts) - below that the IRS isn't as concerned.

I think it is worth doing. Let me know your decision and if I can help you I'd be glad to.

Phil,

Right now its about 8 of us. 3 of us are the officers the rest are BOD for filing purposes. They are willing to help they just don't want to be officers. We are meeting this week (3 officers) to discuss everything we need to do for the year. But our first steps were to become incorporated in MA (which we've already done) and to file the paperwork (Articles of Organization, Bylaws, BOD names and Short Form PC) to become a charity in MA and get our certificate to solicit so we can start fundraising, we'll file that next week. We realize that we have 15 months (I think thats the number, its in all the paperwork I have) to file with the IRS.

I guess what we are trying to decide is it worth it to file for 501c3. We really want to try to get donations for everything they have paid for in the past. (Food for spaghetti night - cost $750 LY, raffle items, etc.) But to do that and allow the businesses to write it off we know we need to be 501c3. So the question is do we file or not.

Since we have incorporated are we required by law to file for 501c3? We guess that our gross receipts will be above $25,000 again? I'm used to dealing with a PTO whose gross receipts are over $100,000 so not sure if this new group really needs it. We were thinking that maybe we could use the schools tax ID # for donations, but in reading the posts we might not be able to legally do that. In the other PTO I was in we got almost everything we needed donated for every event we had. We are thinking we'll be able to get more donations if we are tax exempt.

So I'm trying to figure out which is the way to go, if we even have a choice at this point so that when we meet next week I can give both pros and cons to becoming 501c3. Hopefully once the school year starts we'll get more parents involved. Its pretty much been run by a handful of people. We are hoping to get the word out about the PTO and bring lots of people in to help.

Thanks for all your responses.

dragonlady,

The cold front blew in some really good T-storms for a couple hours this PM. If the weathercasters didn't hype every storm within 100 miles, you would never watch the news (it's all about ratings).

To answer your question about how far back you have to go, it depends. The first step is to get an approved Charter (or what the IRS calls Articles of Organization). I think technially, the date the organization approves the Charter is the day you become an official organization. Which means 1. a clock starts ticking for applying for 501c3 and 2. Your application does not need to include financial information before that date (or rather the begining of that fiscal year).

Getting the Charter done well (for your group) and approved took us the longest amount of time - mostly because we didn't rush it through. The IRS requires certain things in the Charter - if you can send it to me I can review it for you and give you my opinion.

Even while that is going on you can start to fill out the 501c3 application. Even though it runs to 35 pages, if you take it a little bit at a time, you will see there are lots of things that are easy to do, and quite a few that you don't need to fill out. We delayed for several years even contemplating the application until our hand was forced. It was not nearly as bad as we feared.

If your Charter is in good shape, you could finish the application by the end of the summer and posisbly have IRS approval by Thanksgiving (the state is another process which is simple, but takes another month or so.

You are already ahead of us in that I didn't know enough to Incorporate before we applied for 501c3. I now understand that is the way to go.

I am a little concerned that such a small group is doing this alone. Is it that the entire PTO is made up of only the 3 of you, or are you the ones pushing the issue (and getting all the work dumped on you as a result)?

Chadldy,

Sure. Let me know your e-mail and I'll pass it along.

Phil,

Would you be willing to share a word.doc version of your charter with our PTO so we can use to begin our draft? We are unable to edit the pdf version.