1	Basics of PTO Organization Sandra Pfau Englund Pfau Englund Nonprofit Law, P.C. Alexandria, VA 703.304.1204 * sandy@nonprofitlaw.com
2	How is your PTO organized? Unincorporated volunteer parent group? Stand-alone nonprofit tax-exempt corporation?
3	Advantages of incorporating your PTO Decreases personal liability of officers/members of the group Decreases liability if former group did not file appropriate tax returns Increases credibility
4	Disadvantages of incorporating your PTO Cost/paperwork Incorporation ($75) VA annual reports ($25) NOTE: IRS return required for all groups with $5000+ gross receipts
5	Disadvantages of incorporating your PTO May raise concern of school administrators While both unincorporated and incorporated PTOs are usually, legally, organizations separate from the school, incorporation highlights the separation School administrator participation can be addressed in bylaws
6	Advantages of tax exempt status for your PTO group The $5,000 rule Qualify for state sales tax exemption Eligible for grants Credibility Process: File IRS Form 1023
7	Disadvantages of tax-exemption for your PTO group Cost/paperwork IRS filing fee $500 Legal fees ($1000 or more)
8	Incorporation & Liability Liability of unincorporated PTOs Need for insurance School insurance often does not cover PTO activities, whether unincorporated or incorporated Schools may add rider to cover PTO activities whether unincorporated or incorporated Insurance is recommended in regardless of corporate status
9	Recommendations: Incorporate PTO Apply for federal tax-exempt status [501(c)(3)] Apply for state sales tax exemption Obtain insurance coverage (either under school policy or with a separate policy)