Planning a New PTO's First Fundraiser

This guide is part of the PTA and PTO fundraising guide. A first fundraiser does two jobs: it raises money, and it shows families the new group is organized and trustworthy. In year one the second job matters more, so the setup below comes before the fun part.

Set up before you collect a dollar

Collecting money before these basics are in place puts volunteers at risk, mixes group money with personal accounts and makes reporting impossible.

• Bylaws adopted by the membership, including how officers are elected and how money is approved and spent. A PTA uses its state PTA's bylaw template; a PTO writes its own.
• Officers elected, including a treasurer who is not the fundraising chair.
• An EIN (employer identification number) in the group's name, applied for directly with the IRS. It is free, and the IRS warns that you never have to pay a fee for one.
• A bank account in the group's name, never a personal account, with at least two authorized signers.
• A decision on tax-exempt status, explained below. Until it is confirmed, don't tell donors gifts are tax-deductible.
• An annual IRS filing on the calendar. Exempt groups with gross receipts normally $50,000 or less can usually meet the annual requirement with the short online Form 990-N (e-Postcard). Missing a required annual return three years in a row automatically revokes tax-exempt status.
• A one-page budget approved by the members (a sample is below).
• Principal approval for the group's role at school and for the first fundraiser's date. A fundraiser approval request you can copy covers what the principal will ask.
• A way to accept online gifts into the group's bank account, tested with a small real gift before launch.

How long setup takes

New groups usually stall at the bank, not the IRS. This table shows the order, who does each step, and which steps have to be finished before the group takes any money. Times are typical, not promises; your bank, district and state set the real pace.

If the founding group starts in spring, steps 1 to 5 can be finished before school starts and the first fundraiser can run in the fall.

PTA or PTO: how tax-exempt status works

The route depends on whether the group joins a state PTA or stays independent. Either way, an EIN alone doesn't make a group tax-exempt; it is only an ID number.

A PTA unit

A PTA is chartered by its state PTA, which sets bylaws, dues and reporting rules. Many state PTAs hold an IRS group exemption that covers their units in good standing, so the unit doesn't file its own exemption application. Utah PTA, for example, says each unit in good standing is covered, and counts paying this year's dues, completing the required IRS 990 filing and having current bylaws as part of good standing. A unit that leaves or falls out of good standing can lose that coverage. Not every state PTA works the same way, so ask yours whether new units are covered and how to get a copy of the exemption letter for banks and donors.

An independent PTO

A PTO applies on its own. Under federal law, a group whose gross receipts are normally $5,000 or less isn't required to apply to be treated as a 501(c)(3), though it still files the annual e-Postcard, and many apply anyway so they can show banks and donors a determination letter. Small groups can usually use Form 1023-EZ, a shorter application filed online, if they expect gross receipts of $50,000 or less a year and assets of $250,000 or less; the IRS eligibility worksheet in the form's instructions settles it. Larger groups file the full Form 1023. The IRS lists the user fee as $275 for Form 1023-EZ and $600 for Form 1023, and says those amounts can change, so check the fee page when you file. Many PTOs ask an accountant to review the application.

Gifts received while the application is pending

Timing matters. If the application is filed within 27 months from the end of the month the group was formed, the IRS can recognize the exemption back to the formation date; file later and it generally starts on the filing date. While it is pending, donors get no advance assurance: according to the IRS, a gift becomes deductible if the group is later recognized as exempt for that period, and it won't be if the application is denied. So:

• Tell donors the application is pending, and don't promise a deduction.
• Record every gift with the donor's name, date and amount, and send a dated thank-you that states the amount, so donors have what they need if the exemption comes through.
• Tell donors when the IRS decides.

Choosing the first fundraiser

For a first fundraiser, the safest choice has no inventory, no rentals and no large volunteer crew. That keeps the financial risk near zero and lets a small team run it well.

To test the options against your own enrollment, volunteers and weeks available, use the fundraiser finder, or compare formats in school fundraising ideas and the no-selling options. If you choose a walk, the PTA walk-a-thon guide has the event details.

Pick a purpose families can see

A new group earns trust by funding something families will notice: a classroom library refresh, a field trip for every grade, a buddy bench. Pick one purpose, price it with the school (anything installed on school grounds usually needs district approval), and make that the goal. "We raised $6,595 and all 12 classrooms got a library refresh" is the sentence that recruits next year's volunteers.

A first-year budget to copy

Keep the first budget to one page: each income line, each cost, the net, and what the net buys. Members approve it before the fundraiser, and the treasurer reports actual numbers against it afterward.

Example A new PTO at a school of 300 families runs a donation drive for classroom libraries, and files Form 1023-EZ this year.

Use your own payment processor's actual rate and real quotes. When a later fundraiser has rentals or a company's share, the school fundraiser budget template separates fixed and percentage costs and works out break-even.

A launch letter to copy

The first message from a new group introduces the group as much as the fundraiser. Say who you are, the one thing you're raising money for, and how the money is controlled. Send it from named officers, not just "the PTO."

For reminders, a last-call note and a results letter in the same style, see the parent letter templates.

An eight-week plan

1. Weeks 8–7: Confirm the basics

   Bank account and signers in place, principal approval, date on the school calendar.

2. Weeks 6–4: Build the fundraiser

   Price the purpose and set the goal with the goal calculator. Set up online giving and test it. Adapt the launch letter above. Line up two or three volunteers with named jobs and an end time. The guide to writing a volunteer ask shows how to size each job so people say yes.

3. Weeks 3–1: Launch

   Launch letter, principal's newsletter mention, one progress update, one last call. Give families a message to forward to relatives.

4. Week 0: Close

   Two people count all cash and checks, sign the count sheet and deposit. The cash handling guide covers the count and what to do if the bank is closed.

5. After: Report

   Thank every donor and volunteer, report the total and what it bought, and write a half-page debrief. The guide to reporting results and thanking donors sets out who hears from you, and when.

Mistakes new groups make

• Starting with a big event. A carnival or gala in year one can lose money and burn out the founding volunteers.
• One person doing everything. Even in a group of three, the person who handles money shouldn't be the one who approves spending or runs the fundraiser. The fundraising committee roles guide shows how to split the work.
• Too many purposes. "General support" is hard to give to. One priced purpose is easier to explain and to report.
• No report. A new group's credibility is built on showing exactly where the money went, including the costs.

Planning year two

After the first fundraiser, the group has a track record: a participation rate, an average gift and a list of people who helped. Use them to set next year's plan with the PTA and PTO fundraising calendar, and consider adding a pledge event in the fall and business sponsors once the group has shown it delivers. The school sponsorship guide covers how to approach local businesses.

Sources

1. Apply for an employer identification number (EIN) online, Internal Revenue Service (accessed 2026-10-30)
2. Form 1023 and 1023-EZ: Amount of user fee, Internal Revenue Service (accessed 2026-10-30)
3. Contributions to organization with IRS application pending, Internal Revenue Service (accessed 2026-10-30)
4. Annual electronic filing requirement for small exempt organizations: Form 990-N (e-Postcard), Internal Revenue Service (accessed 2026-10-30)