Parent Teacher Association Fundraising

Need more pencils, time for new books…that means it’s time for PTA school fundraising!

The football team is out of decent uniforms, the choir is lacking sheet music and the chess club need funds to travel to a district competition in the next town over. Who do you think the school depends on each and every year when they need ideas to fundraise?

Why the Parent Teacher Association (aka the PTA) of course!

Every year, as government school funding is cut, the fundraising needs of schools go up. The PTA is basically in charge of raising money to finance PTA programs and projects. They run a tight ship! But there is a reason behind what is typically portrayed on television sitcoms as the PTA tirade…crazed parents with too many stringent rules to uphold!

The reality is that the PTA runs as a tax exempt organization, which means that there fundraising projects must be related to the educational, charitable, and philanthropic purposes. The PTA must honor the 3-to-1 rule when operation, which means that for every fundraising activity they plan, they must plan at least three non-for-profit programs aimed at helping parents or children or advocating for school improvement projects.

The PTA has a hard job. With every fundraising program they create, they must stick to some pretty stringent guidelines, for instance their fundraisers must:

Include all PTA members and be fun
Cannot burden to the school staff (teachers, custodial or parent volunteers)
Cannot compete with or take away from school lunch and nutrition programs
Can’t conflict with other school programs
Can’t ask children to sell door-to-door or raise funds
Can’t involve commercial or advertising
Have the approval of all PTA members in advance of the event
Reflect the majority vote in the PTA meeting minutes
Have a specific purpose, and
Approval from the entire association membership

PTA Tax Exemption Status

In order to qualify for PTA tax exempt status under Section 501(c)(3) of the Internal Revenue Code, the association must ensure that their fundraising event doesn’t have money as its primary focus. Kind of defeats the purpose, doesn’t it?

Well because PTAs receive tax exempt status, one member in default of this rule can ruin the entire efforts of the organization. For instance, if one PTA member uses commercial activities to advertise their fundraising cause and is found out by the IRS, the entire PTA association will be slammed with a tax penalty—or worse—loss of their tax-exempt status.

PTA Fundraising Guidelines

If you are new to the world of PTA, or if your child’s school has decided to seek PTA tax exempt status by organizing a PTA association, be aware of the PTA standards as follows:

PTA fundraising activities are conducted via committee, so majority vote always rules
The PTA chairman is an appointed via election by the executive board
The PTA’s fundraising committee’s main responsibility is to plan fundraisers in order to raise the decided fund goal to meet the proposed budget
The fundraising committee answers to the PTA president and treasurer. They must keep all receipts and disbursements for all activities
All fundraising events must be pre-approved by the executive board and PTA board association
This majority approval must be recorded in the meeting minutes
The PTA fundraising committee is also responsible to recruit volunteers to conduct the project, and assignment of volunteer tasks via a work schedule.
They must also have the dates of their events pre-approved with the school for facilities, equipment and to ensure their event doesn’t hinder other school programs and events
The PTA fundraising committee must also seek all necessary permits for their fundraising events
Ensure any vendor used has insurance for liability and Workers' Compensation, as well as a vendor's certificate of insurance
As part of their Noncommercial Policy agreement, PTA members can’t use their names for any commercial activities, even with non-PTA activities
PTA officers must never make endorsement of sponsors products or services that they use for fundraisers, which means they cannot write an acknowledgment of thanks, or recommend sponsor products or services to the public