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Pto Paying Operating Expense Of For Profit Private School

Defamation Law Discussion Forum

Pto Paying Operating Expense Of For Profit Private School

Postby Howe » Sun Nov 20, 2016 7:46 am

I am the treasurer of a 501(c)3 PTO associated with a for profit private school.  I believe most of what the PTO funds qualifies as specific projects that further the PTOs purpose. For example the purchase of equipment for the computer lab, the science room, or the art room.  The PTO also purchases equipment for the playground, and equipment or teaching aids for the classroom.  The PTO retains ownership of all of these items.

However, the PTO purchases ongoing supplies for the art room, science program, computer lab, and classroom curriculum. Additionally, the PTO has been asked to purchase a computer for the classroom which will be used primarily by the teacher to prepare class materials as part of the school curriculum.

My question - Does the ongoing purchase of supplies such as paper, toner cartridges, art supplies, science supplies, etc  cross any line?  Would this type of ongoing support of the curriculum be considered a private benefit  or inurement to the owners of the school.

Thanks for any input on this issue.

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Pto Paying Operating Expense Of For Profit Private School

Postby Carvell » Wed Nov 23, 2016 9:58 pm

I don't know what you mean by "associated with a for profit private school", but see www.irs.gov/pub/irs-tege/eotopica93.pdf

starting on pages 11 "Private Facility Owners" which discusses prohibited private benefit and excessive control of the booster

organization by such private facility owners.

An extensive discussion by the IRS of the private benefit issue

relating to 501(c)(3) organizations is found at:


(it takes a while to load the 19 page pdf file).

Especially note page 8 about a private school benefiting the insiders.

If you think that the private school has some control over the PTO(as PTO are like booster organizations), let me know, but, otherwise, I can comment that the computer may be considered to be giving too much private benefit, but supplies, if only used for the students would be generally allowable as the 501(c)(3) organization is to benefit students directly, but the Board of the PTO should require detailed reporting as to the use of the funds to show such direct benefit.

Harvey Mechanic, Attorney at Law - [email protected]

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  
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