graduating high school seniors—is this something that PTAs are allowed to do, and if so are there any pitfalls we should watch out for?
ANSWER: There is nothing in PTA bylaws or policies that would preclude a PTA local unit or council from offering scholarships; indeed doing so is closely aligned with the part of PTA’s mission that speaks of PTA being “a relevant resource for families”. As you probably know, WSPTA’s Scholarship Program awards up to $60,000 per year in scholarships, funded by the awards that local units purchase to honor their volunteers and educators. However, there are some things to think about to make sure you don’t jeopardize your PTA’s tax exempt status with the Internal Revenue Service (IRS).
First, you’ll want to review your 1023/24 form—the form you filed with the IRS to obtain tax exempt status—to make sure that having a scholarship program is covered by the purposes you stated in that document. If it is not, you can file an updated 1023/24 pretty easily.
Second, an appropriate expenditure for the scholarship program should be listed in the budget approved by your PTA’s membership.
Third, you should have both some standard criteria and processes established up front to guide how which person(s) will be awarded the scholarship(s); for example if the scholarship is to be based on financial need, how will that be determined? If it’s to be based on academic performance, what is the minimum grade point average? It’s much better to plan these things in advance rather than making them up on the fly.
Finally, while you can place some conditions, such as limiting the scholarship to graduating seniors who attended a particular elementary school, or are entering a particular field of study, you cannot limit applicants only to members of your PTA or to the children whose parents worked on a particular fund-raising activity—otherwise the IRS would likely say that the scholarship is
a financial benefit for members and not the public, and evoke your tax exempt
As always, please feel free to contact the WSPTA Office if you have further questions or would like clarification.