Q: With the holiday season approaching, our PTA would like to sponsor a gift card drive to support families who are experiencing financial hardship. Is this allowed?
A: It’s commendable that your PTA would like to help those in need in your community. For PTAs, however, using gift cards is not the simple solution we wish it could be; a unique set of IRS-related issues and considerations must be addressed. Currently in our district, there are two ways PTAs can support families in need:
- “Adopt a Nonprofit” — PTAs can donate funds or goods to a local nonprofit whose mission is to support families experiencing financial hardship. This can be achieved by sponsoring a food drive, coat drive, collecting restricted donations, etc., and then donating the goods/cash to the chosen nonprofit. It’s recommended that PTAs check with their chosen nonprofit to find out how best to support their efforts before starting a donation collection.
- PTAs can advertise that they are sponsoring a gift card drive, and invite families who would like to benefit to notify the PTA. Because of limitations around what school counselors may use the free/reduced lunch lists for (providing school meals), counselors may not share those lists with PTA—but counselors may help spread the word about the gift card drive within the school community. Whether PTAs choose to collect physical gift cards or restricted funds to purchase gift cards, careful tracking is necessary—from receipt to storage to distribution of the gift cards. PTA volunteers (not LWSD staff) must handle the gift cards throughout the collection, storage and distribution phases of the gift card drive.
For more information about how PTAs can and can’t use gift cards, as well as important considerations about process documentation and bookkeeping, please read this WSPTA blog post.