Hi AKat --

You bring up a great point. I'm not a lawyer, but I suspect that you're correct, that the PTA's threats of taking your "stiff" (dollars, items) would never hold up if you wanted to fight it. I don't see any argument supporting that contention by PTA.

PTA has a vested interest in making it *seem* like leaving PTA is terrible, difficult, costly, etc. Calling their bluff is intriguing.

I've always advised spending down the funds, because -- why not? Why pick that fight when it's relatively easy to spend down the funds? Or -- as an alternative -- to donate the remaining funds to the school, maybe even with a wink-wink from district that you'll get funds back for your PTO when dust has settled.

BUT -- if you want to fight that fight, I'm completely with you. The funds were raised by your parents for the benefit of your school. (You've already sent away the dues portions which might be claimed as "for other schools".) The IRS only requires that the remaining funds from a disbanding 501(c)(3) go to another 501(c)(3), so I don't see where IRS would have any problem with what you're proposing. Especially since the goals of your PTA and the goals of your new PTO are so, so similar.

Finally, from a practical standpoint -- I don't know what the PTA could do to you. they're not signers on your bank account, so they can't just take your dollars. And if they say that they want, for example, your popcorn machine, then you can tell them to go fly a kite. Are they going to to come in with a sherriff and demand the popcorn machine? It's ludicrous. Even when they say you have to forfeit all your books and records, I'd say: no way! If there's an issue with your past operations (say there's a checkbook discrepancy, for example), folks are gonna ask your local leaders what happened. They're not going to ask the state PTA. That's why i wouldn;t give up the books. It's another example of PTA bluster.

I feel 100% that what you're saying is within the *spirit* of the law and the spirit of the work you've been doing as a PTA (and PTO). I can't affirm that it's within the letter of the law, but I strongly suspect that it is. Would love to see you guys try it out. Once they're done braying, I don't think there's anything else they can do. Let us know what you wind up doing and how it turns out.

Hope this helps.

Tim

Hello. I am president of a PTA that is currently preparing to disband. The timing hinges on whether or not we can transfer our unspent funds to the new organization. The new organization is legal in California and will be submitting its 501(c)(3) application before the May general meeting (we wish to disband in June). Everyone I've spoken to (all of 3 people, not a representative sample, I know) who have made the transition have spent thier money down before the disband vote but cannot tell me why they needed to do this other than fear of having their money absorbed by our umbrella PTA. We could spend down, but this is not the popular choice - a transfer is what we want. I believe that it perfectly legal for our PTA to receive contributions/funds for its charitable purposes and decide as a group to fulfill this purpose(s) by supporting the activities of the newly formed organization. However, our PTA council and district have stated emphatically ,that we cannot transfer the funds. I've asked for the reasons in writing so I can share them with our group, but have not yet heard back. I've sent some information to an attorney, but have not heard back from him either yet. What I want to avoid is avoid doing anything to risk our PTA charter status while we still have funds in our account. Anyone else transition from PTA to independant 501(c)(3) WITHOUT spending down?

Thanks !