LK Education Bulletin

School Directors hoping for significant relief or delays in implementing the provisions of the SSOFAA will view the recent enactment of three amendments as a cup half full. Most notably the amendments do clarify that a school support organization does not need to become a 501(c)(3) organization pursuant to IRS regulations but can be a state chartered not-for-profit entity.

LK Observation: The appeal of not becoming a 501(c)(3) organization is it avoids the initial cost and effort in filing and receiving this designation by the IRS and avoids the recurring annual reporting. However, the burden of not becoming a 501(c)(3) needs to be evaluated both in terms of its impact on those who the funds are raised from and the future impact on the organization. By not becoming a 501(c)(3) entity the individual making the contribution cannot receive a Federal Tax deduction. This may become a limiting factor in receiving donor contributions in the future.

Amendments reiterate that the Act takes full effect July 1, 2008.

Cooperative agreements including the use of school facilities for fundraising purposes by an SSO must be approved by the local board of education.

The SSO Act retained the section that required the director of schools or his/her designee to approve a fundraising activity prior to the activity taking place. However, a new sentence was added that made clear that this approval does not make the fundraising activity a “school-sponsored activity.”

The SSO must file a statement of total revenues and disbursements before the end of the school year.

The statements and records that must be retained by the SSO for four years, must be available upon request by any member of the organization, principal, director of schools, or the director’s designee, or the office of the comptroller of the treasury.

LK Observation: A SSO needs to retain, at a minimum, the following items for four years: detailed statements of receipts and disbursements, minutes of any meetings, a copy of the charter, bylaws and documentation of its recognition as a nonprofit organization.