For many years, WSPTA has interpreted National PTA and WSPTA bylaws concerning payment of membership dues to prohibit local PTAs from using its own funds to pay for PTA memberships. In an effort to remove barriers, WSPTA leadership has consulted with National PTA, their accountants, and legal counsel over this interpretation.
The major findings are:
- The National PTA Board of Directors has historically interpreted the National PTA Bylaws to permit a common state and local practice that allows some individuals/entities to purchase memberships for other individuals.
- There are no legal prohibitions or IRS regulations that would restrict a membership association like a PTA from buying memberships for individuals, as long as there is a charitable purpose for using its funds in this way.
Based on these findings, WSPTA now interprets WSPTA Uniform Bylaws to permit a local PTA to designate part of its general funds to pay for membership dues, in accordance with the following new WSPTA policy:
Section 3.2.5 Membership Subsidies and Gifts
A local PTA may offer full or partial membership subsidies to persons requesting them and must create written procedures and internal controls documenting subsidy criteria for any such program. Membership subsidies may be funded through restricted donations and/or through general funds designated by the local PTA for this purpose. Unused funds in the membership subsidy budget line items carry over year to year but may only be used to subsidize the cost of PTA memberships.
Individuals may gift memberships on behalf of specific other individuals by directly paying for their membership dues.
How will this work in practice?
PTAs currently ask for membership dues to be paid by the individual when signing up for a membership, and use a “membership” line in the budget to record the income and expenses. In addition, many PTAs enable individuals purchasing a membership to make a donation to pay for memberships for others. This donation would go into a membership subsidy (formally called a membership scholarship) – restricted budget line. Funds in this restricted budget line can only be used to pay for membership dues, and unused funds carry over in the restricted fund from year to year. These funds cannot be “unrestricted” by the PTA. Neither of these current practices needs to change with the new policy.
If a PTA wishes to begin a membership subsidy program using its general funds, it will need to take several steps:
- The board must create a written policy and procedure outlining the criteria for using general funds to pay for memberships. These criteria must fulfill a charitable purpose, such as encouraging engagement from a family for whom membership dues are a financial hardship at this time. A local PTA could violate IRS rules if it was buying memberships without a charitable purpose.
A sample Membership Subsidy Policy that your PTA can adapt can be found here. This policy can also be added to your PTA’s Money Handling Policy. A sample Money Handling Policy can be found under Board Resources/Policies and Rules on the Leadership Guides page.
- The membership must vote to add a standing rule to create the new membership subsidy program, referring to the written policy.
Sample standing rule:
[PTA name] may offer full or partial membership subsidies to persons requesting them in accordance with the Membership Subsidy Policy, which shall be reviewed by the membership annually.
- The membership must vote to add a line to the PTA budget designating PTA funds to be used for subsidizing memberships. Note that, like all designated funds, the PTA membership may vote to “undesignate” the funds at a future membership meeting.
The membership section of the budget might look like this:
FAQs on Membership Subsidies
- My PTA wants all families in the school to be members and have a voice in PTA decisions. How can my PTA give membership subsidies to all families in the school?
Membership associations like PTAs cannot just sign people up without their consent. An individual must actively seek to become a member and request a membership subsidy by the method the PTA describes in its membership subsidy policy. This could be as simple as filling out the membership form and checking a box.
- My PTA wants to increase staff participation. How can my PTA automatically give membership subsidies to all staff in the school?
A PTA may offer subsidized memberships to all staff, but each staff member must accept the offer by the method the PTA describes in its membership subsidy policy. This could be as simple as filling out the membership form and checking a box.
- Can my PTA automatically pay for the membership dues for our elected officers or the entire board?
No. The criteria for providing membership subsidies must apply equally to all members. The officers or other board members can ask for the subsidy in the same way other members can.
Guest post by Nancy Chamberlain, WSPTA Finance Officer