Fundraising Fundraising and the Purpose of PTA
The primary emphasis in PTA should be the promotion of the PTA mission and the purposes of PTA. The real working capital of a PTA lies in its members, not in its treasury. Fundraising is not a primary function of PTA. When PTAs invest their human resources in programs that improve homes, schools, and communities, they earn benefits for children and youth with very small outlays of money. PTA-sponsored programs can provide enrichment activities for families. PTAs can work with other community organizations on community-wide issues that match up with PTA priorities. The purpose is not to subsidize public funds by hiring teachers, etc. Any funds generated by a PTA, including the local portion of dues, should be predetermined and budgeted for purposes that advance PTA work, such as participating on committees, and undertaking projects and programs. Participation in state and national PTA conventions is an appropriate and important use of PTA funds.
Children should never be exploited or used as fundraisers.
Program and Project Funding Sources
Annual membership dues are the primary source of funds for PTAs; some PTAs are able to do excellent work with no financial resources other than their dues. However, special projects and programs may require additional funds. If dues are not sufficient to finance a PTA’s work, supplementary funds may be raised within the context of the mission and purposes of the PTA. The framework for how a PTA should conduct its fundraising is determined by the policies of the National PTA and the government regulations for 501(c)(3) tax-exempt organizations. Any funds generated by a PTA, including the local portion of dues (not state or national portions of dues), should be budgeted for purposes that advance PTA work. PTAs should begin each year with specific goals in mind, and should identify strategies for reaching those goals before determining the dollar amount needed in a fundraising event. Only those funds necessary to meet the needs of the year’s activities and projects, as outlined in the PTA’s budget, should be raised. One well-planned fundraising project will usually raise whatever funds are needed to finance the year’sactivities.
If the fundraising event is to reflect the high principles of the association, it will have educational, social, or recreational value in itself.
Before undertaking any financial enterprise, a PTA should check with school, local, and state authorities to determine whether the planned activity is prohibited by state or local law or by school policy, or whether the PTA requires any special permit.
Sponsorship vs. Endorsement
Corporate sponsorship is a funding mechanism in which a commercial concern provides cash, products, or know-how to a charitable or educational association in return for an acknowledgment of thanks. The acknowledgment of thanks generally takes the form of public recognition for the sponsor’s support. Corporate sponsorship activities stand in contrast to endorsement activities, in which charitable or educational associations endorse the products or services of commercial concerns.
Sponsorships are an appropriate means of funding projects and programs that promote the objectives of the organization.
Endorsement activities are not appropriate for PTA participation based on PTA’s noncommercial policy. In return for sponsorship, a PTA may thank the sponsor for its contribution; the thank-you may be in writing or on posters, banners, or other appropriate media. The written acknowledgment must be limited to an expression of thanks and can list identifying information for the sponsor. The acknowledgment can never make a qualitative judgment regarding the sponsor or its product, and it cannot request that people patronize the sponsor or buy its products; otherwise, the sponsorship payment will be subject to federal income tax. A 501(c)(3) charitable or educational association is not prohibited from engaging in corporate sponsorship activities. A special provision in the IRC makes 501(c)(3) organizations exempt from paying federal income taxes on income from corporate sponsorships, as long as the benefits that are given back to the corporate sponsor fall within IRS guidelines. Because qualifying corporate sponsorship income is considered a charitable donation, there is no limit to the amount that can be received by a 501(c)(3) organization.
Seeking Corporate Sponsorship
Listed below are elements of the national policy that state and local PTAs may find helpful when seeking corporate sponsors:
Sponsorships shall help further the programs, aims, and goals of the association.
Sponsorships can be linked to specific events, programs, activities, or publications, or can be added to general funds.
Sponsorship money or in-kind donations shall not be solicited nor accepted from companies that manufacture products or take public positions inconsistent with National PTA’s positions and resolutions (e.g., alcohol, tobacco, or firearms companies). A successor clause will appear in all sponsorship contracts.
Sponsorship agreements shall never involve techniques or marketing approaches that exploit children. This does not preclude the sponsor from using child actors in advertising and promotions Sponsors product shall not be labeled as ―official product of the PTA‖
Selecting Appropriate Fundraising Activities
One well-planned fundraising project will usually raise the funds needed to finance the year’s activities. If the fundraising event is to reflect the high principles of the PTA, it will have educational, social, or recreational value. The following questions should be used as guides in selecting and planning a fundraising project that will be both successful and worthy of the PTA:
o Does it adhere to the PTA mission and the purposes of PTA?
o Does it conform to the noncommercial, nonsectarian, and nonpartisan policies set forth in the PTA bylaws?
o Does it refrain from using or exploiting children?
o Will it create goodwill for the PTA?
o Is it a type of activity that can serve as a positive example for children and youth?
o Will it provide the revenue to help meet the PTA’s goals?
o 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?
o Do the state and local governments require the PTA to collect and remit sales tax?
o Are special permits, such as special licenses or health permits, needed?
o Is the liability of the PTA and its members protected through sufficient insurance or otherwise?
o Did the president sign the contracts for vendors and/or manufacturers? Do the contracts for products cover who is responsible for spoiled or damaged goods? For unclaimed goods?
o Is the PTA using volunteers, or does it have to pay or contract with workers?
o Have procedures been established to safeguard the handling of products and money?
o What are the costs for using a facility? How long is the event going to be held? Are there special requirements or restrictions for using the facility? Are fire laws and safety precautions strictly observed? Is the facility accessible to people with disabilities?
o 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.
o 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 fundraising ideas, review this list, as well as other questions and concerns, to determine which fundraising event to choose.
The 3-to-1 Rule
When planning the year’s activities, PTAs should use the 3-to-1 rule. For every fundraisingactivity, there should be at least three non-fundraising projects aimed at helping parents or children or advocating for school improvements.
Fund raising PTA.org 2012–2013 PTA Money Matters Quick-Reference Guide |
PTAMoneyMatters Standards for PTA Fundraising
PTAs are often called upon to finance programs and purchase needed equipment that tight school budgets do not have the money for, and each PTA must decide what it will do. Before approving proposals for material aid to the school or community, a PTA should consider whether or not theproposed equipment or service is a public responsibility. If a public service is urgently needed and public funds are not immediately available, a PTA may initiate and coordinate the service while encouraging public agencies to take over the financing and operation of the service. In emergencies, PTAs may provide for the pressing needs of children and youth while they work to alert the public to its obligations.
A PTA renders a greater service by working to secure adequate funding for programs that have an enduring benefit than by purchasing equipment for schools. PTAs should not contribute to the problem of inequities within a school district by excessive fundraising.
As money for services and equipment becomes available from other sources, a PTA should allocate more of its funds to such projects as leadership development, parent education, and child health and safety programs. PTA funds should always be used to further PTA’s mission. PTA fundraising should be carried out within the framework of National PTA’s policies. A PTA should never undertake any form of fundraising that may be detrimental to character building. Once the goal of the fundraising project has been thoroughly considered, the following points can help guide a PTA in deciding on a fundraising event: The PTA should check with its state PTA to determine whether guidelines exist for working with individual companies or corporations. The anticipation of a successful fundraiser should not cloud the judgment of the PTA or be exploited by those outside the PTA who may have something to gain privately. Project organizers must take care not to improperly obligate their PTA when soliciting or accepting commercial contributions to help finance a project Children should not take part in fundraising activities PTAs need to be aware of the risks involved in soliciting or accepting commercial contributions to finance, or assist in financing, projects. Such contributions may create obligations that violate the noncommercial policy of PTA—a policy designed to protect PTAs from exploitation. Every PTA leader should be familiar with and understand the noncommercial policy.Considerations in developing standards for selecting fundraising materials :Does the program require children to purchase a product in order to participate? Is it expected or implied that children will be required to sell to others?* If there are classroom materials, are they credible and accurate? Has the company produced the materials in partnership with a recognized authority? Are the materials complete and not deceiving or misleading by omission? Is the language and organization of material age-appropriate? Is the information designed to sell products? Do the text and illustrations uphold the PTA’s nondiscrimination policies? Is this a win-win situation where the PTA is benefiting financially or otherwise from the relationship? * PTA policy is very clear that children should never be exploited