E-commerce and Affinity Programs

E-commerce and affinity programs are popular sources of non-dues revenue. In both types of programs, a portion of the sale of a product or service is contributed to a particular charitable cause. The amount of the contribution is usually governed by the sales or the usage of a product or service.

E-commerce purchases are made through the Internet. PTAs can enter into agreements with companies whereby the companies return a percentage of member and nonmember purchases to PTAs as a contribution. PTAs can also be designated as recipients of charitable contributions whenever a customer is asked to designate a charity.

Affinity programs, such as PTA credit cards, are based on the usage of the card. Each time a holder of the credit card makes a purchase using the card, the sponsoring PTA receives a percentage of the purchase or a set amount. PTAs may also receive a sign-up fee for each card issued.

When either type of agreement is formulated, a PTA should verify that the agreement is structured to protect the PTA’s tax-exempt status and does not compromise PTA policies. Either agreement can be structured to avoid unrelated business income. The money received by PTAs should be accounted for as contributions on their financial statements.