First, just to make sure, you do have an exemption from the IRS as a 501(c)(3) organization, right? Because if you do not, nothing anyone gives to you is deductible as a charitable contribution.

If you take in cash from people, what are you doing with it? Are you depositing it in the PTO bank account, or are you depositing it in some kind of special trust account that is not in the PTOs name, or what?

Keep cash donations out of your PTO bank account! If you are putting it in your PTO account, it is going to count as PTO revenues and you are going to need to put it on the PTO tax return. Also, if people are stipulating that this is cash to help with disaster recovery, you need to make very sure that your financial records are kept in such a way so that you can prove that that is exactly what is was spent on. And yes, you would give people a tax deductible receipt for that--they have made a donation to a qualified charity.

It does get a little tricky, though, because then how you spend the cash probably does not necessarily fall into your typical mission statement. Technically, the IRS could call you on that and create some problems (that's the type of thing they would yank an exemption for). However, let's face it, the likelihood of that is pretty darn slim--and even if they were to catch it, it's clearly a one time thing with extenuating circumstances, so they'd be foolish to do anything. But, nonetheless, I don't think it's something you should be doing. Dealing with cash donations for something like this is best left to professionals in that area. If the intention is to funnel cash to the kids that have relocated to your school, a better bet is to work with a bank there to set up some kind of trust fund that the money would go into. I believe donations to those types of funds are generally non-deductible, but I'm not sure.

If you take in non-cash items, it sounds like they're probably non-deductible. If people are giving clothes, etc., to specific identified people in your school only, that's sort of like an "adopt a family" program. In that case, those are just gifts to those families, and are not deductible.

All that said, while I'm an accountant, I'm not a tax accountant, so the advice is probably worth about as much as you're paying for it....

Tim,

That was more or less my thought as well.

They aren't donating to our PTO, they are donating through us. The reason we are collecting clothing, etc, is that we got several evacuee families that have enrolled in our school and have nothing. We plan to set up the donations for them to take from, and then give the rest to other families (believe me, we have SO many in our area). So if people are more concerned about getting a tax donation, they need to give to one of the area shelters that is set up for that.

We aren't spending any PTO money to do this drive, so I think we are ok there.

Hi rach -

First, I'm not a lawyer, nor a tax specialist, so... take this as informed guesswork much more than any definite answer.

I don't think items donated to your parent-teacher group for this purpose would be tax deductible. People interested in the tax deductibility issues here should likely be giving to the red Cross or Salvation Army or similar formal charities dedicated to this kind of work.

I'm all for your group pitching in for the Katrina victims, but -- technically -- I suspect it's not even what your own group's dollars are *supposed* to be going for. I don't think you'll get in any trouble whatsoever for helping, but nonprofits are supposed to spend their dollars and efforts toward their official nonprofit cause.

You're right in thinking that "stuff" donations (used clothes, appliances, etc.) can be tax deducatible. Just to repeat, though, I think donors who are trying to get the tax deductibility there would be best served donating through an official disaster relief nonprofit.

Tim

We are taking in donations, both cash and non-cash, to assist the hurricane victims that are here in Houston, and more immediately that have enrolled at our school. Would the non cash items people donate be tax-deductable? In other words, do I give them a receipt that has the PTO tax-id # on it? These are not really donations TO the PTO, but rather donations THROUGH the PTO. Any help or advice is sincerely appreciated! Thank you!