In this blog, we will address a common question about whether a PTA can restrict eligibility for a program, for example after school enrichment classes, to students whose parent/guardian is a PTA member. In a separate post, we’ll consider the question “Can a PTA require school staff to be members to be eligible for classroom grants?”.
There are two issues: what the IRS says tax-exempt membership organizations can do, and public perception of what they should do.
First the IRS rules:
The IRS has rules around “public benefit” vs “private benefit.” To stay tax-exempt, a charity must serve a broad public interest and not a private group of people. So, if everything a PTA did only benefit members or their families, that would be a private benefit, and against IRS code.
However, if the PTA offered enrichment classes as one of its programs, it could require someone to become a member as long as anyone can become a member. PTA membership is open to anyone who supports the mission: Without discrimination, membership in each local PTA shall be open to anyone who supports the purposes and basic policies of the National PTA, WSPTA and the local PTA, and who has submitted a membership registration form and paid any dues required by the local PTA (WSPTA Uniform Bylaws Article 4, Section 1).
The enrollment form for the program should state that membership is open to all (have a nondiscrimination statement) and that the enrichment program fees are not tax deductible.
If a PTA decides to require membership to participate in the program, it should set up either a membership scholarship and/or fee scholarship program to demonstrate to the IRS that the PTA is serving a broad public benefit. There should be clear, written policy around how scholarships are awarded. Importantly, PTA board members should not be eligible for these scholarships to avoid the “private inurement” rules, which prohibit income or assets of the organization from benefiting officers or directors. Violation of private inurement rules could lead the IRS to revoke the PTA’s tax-exempt status.
Those are the rules for what the PTA can do around student programs. The perception of whether the PTA should do it is described in the Running an Enrichment Program Handbook:
“While a PTA may choose to only include students of PTA members in their before/after school programs, WSPTA encourages your board to consider this type of policy carefully. Although requiring a student to have an adult that is a member may help fill out the volunteer requirement, it may also cause a feeling of your PTA being exclusionary. Sometimes discounts or preference placement based on membership or volunteer availability can be questioned. It is okay to use these things to encourage membership and volunteering, just be ready to explain why if you are questioned.”
The policy of whether to require membership to participate in enrichment classes should be discussed by the PTA board of directors but ultimately determined by the PTA membership.
Remember, the PTA must have other programs that don’t require membership to participate; Reflections, social events, bingo night, etc. should be open to all school community members. But do encourage people to become PTA members while they are enjoying your events. Don’t forget to promote PTA member discounts – they can more than offset the cost of dues! And remind them that PTA membership dues are 100% deductible as a charitable contribution.