Saturday, February 4, 2012

Can a unit raise money for a national charity?

Some parents and teachers want our local unit to conduct a fundraising drive to raise money for a national charity that is qualified as tax exempt under section 501(c)(3) of the Internal Revenue Code. Is this something  that PTAs can do without jeopardizing our tax exempt status under section  501(c)(4) of the Internal Revenue Code?  Would your answer be different if our PTA converted to a 501(c)(3) status?

The Internal Revenue Service has recognized that students’ education is enhanced by participating in activities such as you describes because it expands their awareness of and connection to their community, the rest of the country and the rest of the world.  Assuming that promoting education opportunities for students (or words to that effect) was included as one of the PTA’s tax exempt purposes in the IRS 1024 when it applied for tax exempt status, the answer is yes, PTAs can participate in such activities.

If the PTA were tax exempt under section 501(c)(3), than its application for tax exempt status (which would include its statement of purpose) would be on a IRS 1023 form; other than that the answer to the question would be the same.