Tag: Taxes

Donated Items and Giving Donations to Those in Need

Posted on by Ray Kinyon

by Leadership Services Commission

Donations, Fundraising, Disasters and Taxes–what’s a PTA to do?  Knowing how to handle donations your PTA receives and perhaps some they want to make can be confusing. Tax laws affect both. California State PTA often gets questions about what PTAs can and can’t do.  Here are some common questions and answers.

PTA Events and Donated Items

Q: What should our PTA do with leftover donated items from our silent auction or other events?

A: If the donations were solicited specifically for this event and not as a “general” donation to the PTA, the PTA needs to contact the donors (all of them) and ask them what they would like the PTA to do with the donated items. This is easiest via email because you will have written instructions from the donor, which is really what you need. If the donor wants the items returned, you have to give them back. If they give you permission to keep them/use them as needed, then you can vote as an association on how to “repurpose” those donations at a future time.

FYI: Only donations that you keep must be reported on tax filings, either as cash or in-kind donations. Returned donations do not need to be reported.

Q: What guidance should our PTA give to donors who want to deduct their contributions?

A: We encourage you to review PTA’s guidance Providing Documentation to Donors– cash and in-kind. 

Tax laws require the PTA donor to obtain a receipt for every cash donation, regardless of the amount. A donor must have a canceled check, bank record, or receipt that shows the name of the PTA to which the contribution was made, the date, and the amount of the contribution; therefore PTAs must give a receipt for every cash donation.

In-kind contributions of $250 or more require written acknowledgment from the PTA that lists the items donated and includes the PTA’s Employer Identification Number.

Donations to Other Nonprofits or Families in Need

Q: Can our PTA donate to other community non-profits who are taking lead roles in supporting the many under-served families in our district? Can we offer some sort of direct support to members (individuals and families) in need in our school communities?

A: The IRS is very clear that a 501(c)3 public charity (which all PTAs are) may donate funds to another 501(c)3 public charity with a similar mission. That means that a PTA can donate money only to nonprofits that have similar purposes. For example, your PTA could not donate to the Red Cross, but the PTA could donate to a non-profit children’s library, provided it has 501(c)3 status.

Likewise, the IRS is very clear that a public charity may not gift funds to individuals or families unless that is what the charity was organized to do. PTAs are not organized for that purpose, so PTAs may not give money (including gift cards) to individuals or families in our school communities, regardless of need.

The PTA may donate to other community organizations if they meet the criteria above (and if  the association voted to do so), but the PTA could not gift funds to an individual or family. 

Refer to the California State PTA Toolkit section Handling Requests for Relief Assistance. 

Q: Are there other things our PTA can do to help families in need?

A: Yes!  We encourage PTAs to consider the following:

  • The PTA may get the word out about any and all benefits/fundraisers being held for individuals or families in need or about local charities who are assisting those in need, regardless of who is organizing them. That includes letting everyone in your community know about GoFundMe campaigns, etc.
  • The PTA may also help with a fundraiser by advertising it and encouraging volunteers, but it cannot be an official PTA activity, and all money collected must go to the organization holding the fundraiser. Checks cannot be made out to PTA, and no deposits may be made to the PTA account on behalf of another organization or family in need.
  • The PTA may sponsor a food/diaper/necessities drive or solicit donations of those items to be given to a local food bank, etc. 
  • A “free will offering” may be held at a PTA meeting where members donate funds, with the collected funds being delivered to the organization providing assistance. 

If you have additional questions about how to handle a donation, contact your District PTA.