Yes, Critters explanation cleared up a few things that have happened in the past that I know see VERY clearly.

We meet again on Jan 3 and I will be bringing this up, see if anyone else would like to pursue getting our own number and such.

I think Critter explained it all very well.

When our bank account was set up (before my time), we were using the City's EIN. So it wasn't just the Principal that "controlled" the purse strings, it was really the City's Treasurer.

Long story short, we operated that way for many years until the Treasurer decided to crack down on accounts improperly using the City EIN. At that point, we needed to get our own EIN and apply for 501c3 on our own.

Just so you know the implication Critter mentioned are real.

Yes, Yes, Yes!! The posts helped a TON! Thanks for all of the info [img]smile.gif[/img]

Don't panic. If your PTO operates using the school's EIN, with the school's blessing, then your group is an extension of the school rather than an independent organization. That's ok as long as everybody's in agreement with the implications. It's like setting up a separate bank account for the Student Council using the school's EIN. Many PTO's do this, many more have their own EIN and are not (yet) 501c3, and others have their own 501c3. A public school is automatically a 501c3 organization, so any approved committee operating with the school's EIN is also part of that 501c3 .

That said, here are the implications...since you use the school's EIN, all the money you raise belongs to the school. It is out of courtesy and tradition that the school/principal lets the PTO manage "their" money. However, in the eyes of the IRS, the organization who owns the EIN owns the money. If the school decided it wanted to commandeer your account, there really wouldn't be anything you could do about it since you are not a separate legal entity. That's a risk you may be willing to live with.

By using the school's EIN, however, you can honestly tell a donor that their donation is tax-deductible since the shcool is a 501c3, and your group is a committee of the school. There are lots of PTOs who have their own EIN, but haven't filed for 501c3, who are under the mistaken impression that donations received are tax-deductible. Not until you get that 501c3.

It sounds like the principal and superintendant haven't ever given this much thought. That suggests there haven't been any issues in the past that brought scrutiny to the arrangement, so things must be fine. However, personnel changes over time, and eventually your school may get a principal or superintendant who is not so accomodating. You might be faced with the money being taken to cover a budget shortfall, or the PTO being asked to separate legally from the school. This may not be imminent, but you might want to do a little research on 501c3 application, just so you can thoughtfully consider if it's time for your group to apply.

Hope this helps.

[ 12-09-2005, 11:36 AM: Message edited by: Critter ]

HI!!! My old PTO used the school's EIN # & we were not a 501C3. (Something we were going to do but our school was closed due to budget cuts.) We purchased our equipment thru the school's EIN. We had to write a check to the school who deposited thru the board office who then wrote a check to the company so we didn't have to pay sales tax. I wish we would have been a 501c3, we could have saved a few steps. Good luck!!!

This year, our PTO is trying to raise funds for a new wheelchair useable playground. We have always been about fundraising, we have a PTO set up at the bank and everything. Every year we have had fundraisers at this school for as long as I can remember.

This is my 2nd year with PTO so I am still learning alot, I am also the President I should add.

During this fundraising, I thought....Hmmm couldn't we get some grants maybe to help us raise this money? I asked the School Sec. who happens to be the PTO Sec. if we have 501(C)3 status and she said YES, and gave me the EIN number for the school.

I have had this nagging thought in my head that this is just not right. I spoke with the principal and she wasn't sure exactly what being 501(C)3 means, so I asked the Superintendet if PTO falls under the 501(C)3 and he didn't know and directed me to contact the IRS.

All along, I assumed (Yes, first mistake) that we had the 501(C)3 because I was told we did...but all along, we have been using the Schools EIN number. The PTO doesn't have its own and never has. We have always just gone under the Schools number from what I can tell.

The IRS office is closed, so I can't find out and it is bugging me to pieces! I guess the question is..can we continue using the Schools EIN number and if so, would the PTO be considered as having 501(C)3 status?