Observations from the Midwest Homeschool Convention

On April 16-18, 2009 , I attended the Midwest Homeschool Convention here in my hometown of Cincinnati, Ohio.

I did two workshops, one on Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out (named after my book of the same title) and the other on Micro Business for Teenagers (my upcoming book).

Here are a few of my observations:

Homeschool leaders from across the country all have similar problems:

• No one wants to work or join the board
• Older, experienced hoemschool mothes are not coming to meetings
• There is a need for a clear vision and purpose. Leaders want to be everything to everyone.
• Policies and bylaws are sorely needed to elect new board members, deal with conflict, and to prevent burnout

Meeting and talking to attorney David Gibbs of the Homeschool Legal Advantage was a highlight.  We look forward to a wonderful working partnership helping homeschool organizations. Individual families have long had access to legal advice, but now there is a need for homeschool groups to have access to legal advice also.

Some homeschool leaders lack business sense. I heard about fund raising disasters, mistakes with charging fees and offering discounts, etc.

Meeting some of my virtual friends in person was fun.  And I’m so sorry that I missed some of you! I was stuck in my booth (I shared a booth with Mary Hood, the Relaxed Homeschooler) and didn’t get out much.

Here were some of the questions that were asked during the Homeschool Co-ops workshop:

• What does your co-op charge? Is it by student or by family?
• How often does your co-op meet? How long each time?
• Do you interview potential members?
• How do we ensure everyone is like minded?
• How can we encourage members to help out more?
• Do you group grades/ages in your co-op?
• What classes do you offer?
• Ho do you “fire” a volunteer?
• How do you elect a new baord?
• Can a co-op keep the same director/leader forever?
• Why collect a registration fee?
• Where do you meet for co-op classes?
• What is a typical rental fee?

Aren’t those great questions? I’ll work on answering them on this blog in the future.

I will also be presenting this workshop and several others at the Home Educators Association of Virginia convention  June 11-13.  Stop by my booth and say hello if you attend the convention!

Carol Topp, CPA

Does new IRS 990N apply?

Hi Carol,
Thanks so much for all your help in getting our Christian Homeschool Network up and running.  Things are going well so far. My husband brought a card he saw at the post office and handed it to me thinking it might apply to our group. The same basic info is on this web site: http://www.irs.gov/charities/article/0,,id=169250,00.html

It is about a new filing requirement for small tax exempt organizations.Does this apply to us? I was unsure if this was just for 501 C 3 organizations.
Thanks, Carol
Sharon W

Sharon,
The new IRS ePostcard (Form 990N) notification is for 501c3 organizations. The IRS is trying to clean up its database by using this short electronic postcard. They hope to find any “dead” nonprofits that are no longer in operation. They are also looking for small nonprofits that have “grown up” to the $25,000 gross revenues per year and should be filing a 990EZ or 990 Form annually.  The ePostcard is a way for small nonprofits to acknowledge that they are still under the $25,000 annual revenue threshold for filing the 990.

Your organization has not yet applied for 501c3 status, so you do not have to file the ePostcard yet.

I recommend that you consider 501c3 status ASAP.  The IRS expects nonprofits to file for 501c3 tax exempt status with in 27 months of formation (incorporation as a nonprofit).  Your nonprofit incorporation date was May 27, 2008, so you have until August 2010 to apply.  Otherwise, the IRS requests an explanation of why tax exempt status was not filed earlier and tax exemption is granted to the date of filing, not back to the date of formation.  This could mean that a nonprofit might owe back income tax for the period that they were not tax exempt.

If your gross revenues stay under $5,000 a year, you are granted an exception from filing the paperwork for 501c3 status. If gross revenues get to be over $5,000 a year, your group should file for 501c3 tax exempt status or pay corporate income tax on any surplus (i.e. profit).

In a nutshell, a small nonprofit has three choices:
1. Stay under $5,000 gross revenues per year
2. File for 501c3 tax exempt status
3. Pay corporate income tax on any annual surplus.

I hope that helps,

Carol Topp, CPA

Conflict and Leaving a Homeschool Group

We have a situation where a mom feels her teen daughter is being “left out” by the other girls in the class.  It “hit the fan” yesterday when the mom yelled at one girl to leave the class, threatened that the other girl was next.

How does one get to the bottom of this? The family who has the child who was yelled at would like to quietly step down and leave the group. She’s been involved for 5 years -I’d be heartbroken to lose them!

All with only 2 weeks left of the quietest, smoothest co-op year ever!
Oh, help, help, help!
Lisa

Lisa,
Sounds as if a lot of  emotions and hurt feelings rose to the surface.

I wrote an article on Conflict in Homeschool Groups. You may read the entire article at Heart of The Matter Online. Here is part of what I say in the article:

Confession and Reconciliation

Some offenses are too large to be overlooked, perhaps because a relationship has been painfully damaged. In this case, confession and reconciliation between parties is needed. Reconciliation is gently restoring the relationship and it may involve confession on someone’s part. Each party needing reconciliation should ask themselves,

• Have I said something unkind?”
• Have I gossiped about the person or problem?”
• Have I tried to control others?”

Confession to the other party maybe necessary in order to restore a relationship. Reconciliation isnot merely confrontation; it is restoring a relationship. Remind members to ask for God’s wisdom and a gentle spirit before they approach the other party. Each party should aim to be clear and specific.

Merely complaining about another’s behavior rarely helps a situation. The goal is restoring a relationship, not blaming or accusing others. Members should use “I feel” statements such as “I feel like a scolded child,” to explain the hurt feelings a member may suffer.

Using creativity through stories to make your point can be very helpful. An excellent example of using stories comes from the Old Testament prophet Nathan in II Samuel Chapter 12. He had the unpleasant task of confronting King David with his sins of adultery and murder. Nathan wisely used a story of a poor man with only one lamb to help David see his own greed.

I used The Peacemaker: A Biblical Guide to Resolving Personal Conflict by Ken Sande.  It’s a GREAT book and highly recommended. The Peacemaker.net website has some helpful articles from Annette Friesen, their Homeschool Advisor. Search on “Homeschool” and you’ll find an article titled Preparing Homeschoolers for Conflict.

Mrs Freisen says that when a person is offended, (and several people were offended in your situation) they desire three things:

1. An apology
2. Restitution if applicable
3. Reassurance that it won’t happen again.

I think you should work on #1 with the parties involved and perhaps the board could work on #3 if policies are needed.

BTW, I discuss conflict in my book, Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out and have several sample conflict resolution policies that other homeschool groups use.

I hope that helps!

Carol Topp, CPA

Group using personal Paypal account

Hi Carol,

Our (homeschool group’s) yearbook is looking take in the money thru my personal paypal account, then deposit it into an separate bank account so that our Assoc. does cross over the $5000.00 mark. How is this done so that I don’t have to claim the money as extra income.

Currently the association is trying to do a paypal account not just for yearbook for membership dues, they are hesitant because they set up the a paypal account under non-profit, paypal is wanting proof of this and we don’t have it. I suggested that they explain to paypal that they we are a Unincorporated Non-Profit Assoc. and it should be fine.

Sandy in TX

Sandy,

The ideal way to operate is to set up a Paypal account for the association/homeschool group and not run anything through your personal Paypal account.

I understand from other homeschool leaders, that Paypal expects to see proof from the IRS of tax exempt status. They may also accept a nonprofit incorporation certificate from your state. They told one homeschool group they would accept “certified Articles of Incorporation.”

One homeschool registered with Paypal as “Category: Education, Subcategory: Elementary and secondary schools.” While not as accurate as “Charitable/Nonprofit”, it got the job done!

If your organization is not a nonprofit corporation or doesn’t want to be classified by Paypal as as a school, then tell your board that you are using your personal Paypal account and have them record it in the minutes of a board meeting. (“Sandy agreed to allow use of her personal Paypal account for the yearbook project”) Keep a very clear paper trail just in case you are ever audited by the IRS. Keep paper records of every transaction and especially the transfers in and out of the Paypal account. Make print outs from Paypal and file them away with wherever you keep your tax return information. (Do NOT send them to the IRS with your tax return.)

Anyone had problems setting up a Paypal account for their homeschool organization? Id like to hear your experience.

Carol Topp, CPA