As the new school year approaches, many PTAs are planning their budget for the coming year. One part of that budget is fundraising. The National PTA Back-to-School Kit has a list of questions for PTAs to use as guidelines when selecting and planning a fundraising project.
- Does it adhere to the PTA mission and purpose?
- Does it conform to the noncommercial, nonsectarian, and nonpartisan policies set forth in the PTA bylaws?
- Does it refrain from using or exploiting children? Will it create goodwill for the PTA?
- Is it a type of activity that can serve as a positive example for children and youth? Will it provide the revenue to help meet the PTA’s goals?
- Did the fundraising committee provide a budget of expenditures (e.g., materials and advertising for the event), as required by the PTA’s bylaws and standing rules?
- Do the state and local governments require the PTA to collect and remit sales tax? Are special permits, such as special licenses or health permits, required or needed?
- Is the liability of the PTA and its members protected through sufficient insurance or otherwise?
- Did the president sign the contracts for vendors or manufacturers? Do the contracts and products cover who is responsible for spoiled or damaged goods? For unclaimed goods?
- Is the PTA using volunteers, or does it have to pay or contract with workers? (Note that in Illinois, paying workers may be considered working with a professional fundraiser, which can result in the PTA needing to file an AG-990 form with the Illinois Attorney General’s office. Also be aware that once a PTA files an AG-990, it must continue to file annually.)
- Have procedures been established to safeguard the handling of products and money? What are the costs for using a facility? How long is the event going to be held? Are here special requirements or restrictions for using the facility? Are fire laws and safety precautions strictly observed? Is the facility accessible to people with disabilities?
- Is it an infrequent or ongoing activity? Be aware that unrelated business activities could result in some federal or state taxation of the income earned or, in the extreme, the loss of your tax-exempt status.
- Are there local, state, or federal laws that apply? Is care taken to see that no law is violated?
Depending on the PTA and the activity, there may be other questions that need to be addressed. When considering several funding ideas, review this list, as well as other questions and concerns, to determine which fundraising event to choose.
You can find more information on PTA fundraising in the National PTA Back-to-School Kit.
Many PTAs have their fiscal year ending on June 30th (check your bylaws), which means it’s time to handle all of those end-of-the-year tasks so your PTA is ready to start off on the right foot when school starts.
- Close your books. Make sure you get those last deposits in and write those last checks before the end of your fiscal year. Send in your last dues payment and any unused PTA membership cards.
- Prepare for your audit. Your bylaws spell out how your audit should be conducted. Remember, nobody authorized to sign checks can be on the audit committee, though it is helpful for the treasurer to be accessible to the committee when they are conducting the audit. Make sure the committee has all of the financial records, including treasurer’s reports, the checkbook register, the ledger (or spreadsheet or wherever you record income and expenses against your budget lines), deposit and expense vouchers, copies of meeting minutes, and last year’s audit report.
- Conduct your audit. Be sure to have the committee sign off on the audit report form. Your PTA membership will need to vote to accept the audit report at your first meeting prior to adopting your budget.
- File your 990 form. Once your audit is done, you have all the information you need to file your Form 990 with the IRS. If your PTA has less than $50,000 in gross income, your PTA can file the online Form 990-N. Be sure to keep a copy of your receipt from the IRS saying that you’ve filed. If your PTA made between $50,000 and $200,000, your PTA needs to file the Form 990-EZ. National PTA has a helpful step-by-step guide to walk you through these two forms. The IRS Charities and Non-Profits page also has useful information.
- Register your PTA’s new officers. You can register online, and doing so ensures that your PTA will get the new Local Unit Packet stuffed full of useful information when it comes out later this summer.
- Plan next year’s budget. Look at what you spent this year, what programs you plan to retire or introduce, and what changes you plan to make. Consider having a budget line to send someone to the Illinois PTA Convention next spring or to support the Illinois PTA Scholarship Fund with volunteer and other awards. If you’re not sure where to start, take a look at our sample budget.
- Get trained. Contact your district or region director to find out when training will be available in your area. Be sure to check out National PTA’s E-Learning Library as well.