1. Legal and Tax Aspects Tim DavidsonErika Trujillo Marilyn JacobsCheryl Martin

2. Part 1: PTA as a Nonprofit Public Charity Part 2: Funding the PTA Part 3: PTA as an Exempt Organization Part 4: Paying Workers Part 5: Accountability to Donors Legal Concerns

3. Part 1 PTA as a Nonprofit Public Charity

4. California Corporations Code Section 5000 Organized for Charitable Purposes Limited legislativey Part 1: PTA as a Nonprofit Public Charity No political activity Incidental private benefit; no inurement

5. Part 2 Funding the PTA

6. Unrelated Business Income Taxation Unrelated business revenue is taxable Part 2: Funding the PTA Advertising revenue is taxable

7. Avoiding UBIT: Sell donated merchandise Part 2: Funding the PTA Substantially all help is donated Activity is not carried-on regularly Activity is related to PTA purposes

8. Sponsorships An “acknowledgement” is okay Part 2: Funding the PTA Advertising is not okay

9. Gambling Register annually with Gaming Control Part 2: Funding the PTA Pay fee ($100) One event per calendar year 90% of revenue goes directly to NPO See handout for other rules

10. Alcohol No alcohol on a school campus Part 2: Funding the PTA No PTA funds to buy alcohol PTA may not buy, sell or serve Auctioning donated bottles of wine OK

11. Part 3 PTA as a Tax-exempt Organization

12. Part 4 Paying Workers

13. 13 “Contractor” vrs. “Employee” (per IRS) Paying for a School Staff Position Paying a Contractor Paying an Employee Paying Workers

14. PTA is a Volunteer Organization First Option = Ask for volunteers Paying Workers

15. “Contractor” vrs. “Employee” “Control” vrs. “Independence”

16. Employees: Contractors: teacher; aid; staff; accountant speaker; event expert; sitter Paying Workers

17. Paying a contractor 2. Certificate of Insurance 1. W-9 3. 1099-MISC Paying Workers

21. Do NOT hire an employee 2. Personal Income Tax 1. Register with State EDD 3. State Disability Insurance Paying Workers

22. Paying an employee 5. Unemployment Insurance 4. Employment Training Tax 6. Payroll Tax Deposit Paying Workers

23. Paying an employee 8. Social Security 7. Federal Income Tax 9. Medicare Tax Paying Workers

24. How to pay for a school staff position? Do Not Hire Employees! Paying Workers

25. Paying for a school staff position 1. Deposit funds with the school district 2. Fiduciary Agreement form Paying Workers

27. Summary 1. Ask for volunteers Paying Workers

28. Summary 2. Paying a contractor * Certificate of Insurance * W-9 * 1099-MISC Paying Workers

29. Summary 3. Don’t hire an employee * Fiduciary Agreement * Gift funds to district Paying Workers

30. Part 5 Accountability to Donors

31. PTAs must give a receipt for every cash donation Accountability to Donors

32. “In kind” donations Accountability to Donors $250 = list the items

33. “Quid pro quo” donations Accountability to Donors $75 = quantify the value and how received

34. Charity Solicitation Disclosure Law Accountability to Donors must use the donation for the intended purpose “Fiduciary Agreement” form

35. illegal use of charitable funds Accountability to Donors diversion from intended purpose false or misleading solicitations Attorney General Concerns

36. Member participation in decision-making Accountability to Donors Transparency to members Best Practices

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