I agree with the others, it's not an IRS thing, but probably some policy decision from somewhere else that made it into your bylaws at some point. You'll have to try to trace the history of it as it might no longer be valid - or at least eliminate the possibilities.
Possible ideas/orgins:
1) District/School Policy. Example - we're a PTO, not a PTA - but we have a similar cap. For us there is a district policy that each elementary may have only 2 sales type fundraisers per year. (Note - we can have other types of events, just not big sales activities.)
It's not in our bylaws, but the way this stuff gets passed word of mouth, someone could have easily inserted it during a revision. It's amazing how distorted this policy gets as it's explained. AND - the policy was made years ago when we had a different superintendent and a different principal. I don't even know that it's still an enforced policy district-wide, although our principal chooses to follow it.
2) Your own PTA Chapter - your unit may have made a conscious decision when it was formed to limit the number of fundraisers. If this is the case and it's what your parents expect, they may not be receptive to increasing the number of sales events.
3) Based on state law. There's probably no state law that restricts you to only two fundraisers, but there may be a cap on the number of tax exempt fundraisers. In our state, as a qualified non-profit, we can have two tax exempt fundraisers per year. Again, this regulation gets horribly misquoted and misunderstood. It's not in our bylaws, but - in a similar situation - I can see how it might have been slipped in by a well-meaning but mistaken person.
The only reason there would be something like that in your PTA bylaws is if your PTA put it in there or your state PTA put it in there. I can't imagine that it would be required verbage from your state though (I've seen quite a few state bylaws templates and haven't seen that one yet!) and it's not required by national.
PTA bylaws don't usually get so specific on things like fundraising. Things like that are generally added to policies and procedures and developed by your own school's PTA. I would go back to the history of your PTA and the last time your bylaws were done and see why it was added and what the reasoning behind it was.
Point blank- there is NO IRS cap for ANY group, PTA or otherwise. Again, it was probably put in by previous board members at your own PTA. National PTA recommends that you hold 3 non fundraisers for every one fundraiser. This is so that you're doing more than just asking your parents for money. But again, it's a recommendation it is not a rule or a law.
Yeah, luvmy is right. There's no cap. There are 501(c)(3)s that raise millions -- like your soon-to-be-ex-dues-receivers the national PTA -- and lots and lots that raise $5,000 or $25,000.
In the eyes of the IRS, all of those type organizations are basically the same. No cap.
From what I have read in regards to this, there is no limit as to what you bring in dollar wise or how many fundraisers you have, but you have to spend the funds in accordance with your mission statement and the IRS has rules on things such as the money not benefiting the officers and such.
That said, having a myriad of fundraisers through the year can wear out your families. Try to establish a budget for the year and look for a couple of fundraisers that can fulfill your needs financially. Also, while the IRS does not set limits on what you can raise, personally I think the organization should spend most of what they bring in each year unless you're saving for a future planned project or want to carry over a sum for beginning of the next year plans. I'm much less enthused about working my tail off fundraising if I know it's just going to sit in a checking account and not be used to benefit our children.
We are currently a PTA that will probably become a PTO within the year. Does anyone know if there is an IRS "cap" as to how much you can make from fundraisers? Right now, our PTA bylaws tell us we can only have 2 fundraisers per school year, regardless on how much we make. I am just wondering if there are IRS regulations that dictate how much a PTO can "bring in" from fundraising?
[ 03-16-2005, 01:57 PM: Message edited by: Karla Merlak ]
