Should a co-op be a separate organization?

August 17, 2009

Carol,

We have one entity (group) that works outside of our association, this is our checkbook2Co-op group. This group does take in money – I believe it’s run out of a separate bank account. I know our Co-op group has a board, and bylaws but not an EIN number, which I know is very easy to get. What are they benefits of us staying as one group? My question is: should our Co-op group run their funds separately like this?

Sandy in TX

Sandy,

Your co-op could be organized as under your association or as a separate group. It’s really up to you. Since they have their own separate board and bylaws, perhaps they are really operating as a separate unincorporated association already. You could be officially separate if they obtain their own Employer Identification Number (EIN) from the IRS.

There might be advantages to staying as one group. There are fewer volunteers for the board positions, consolidated financial reports, and shared workload. The co-op could remain a part of your organization, but with a separate checking account and its own budget. It could be self-sustaining financially, but still part of your association. Many church-run schools operate like this, financially self-sufficient, but still under the umbrella of the church.

Carol Topp, CPA

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Using Quickbooks for reports

August 2, 2009
Hi Carol,
Our Board of directors for our homeschool group of 100 families just received your 2 books (Money Management for Homeschool Organizations and Tax Exempt 510c3 Status for Homeschool Organizations).  I have read them.  It has reassured me that we are on the right track and that we have instituted many of the things that you mentioned.

We have purchased Quickbooks and our treasurer is working hard to learn  the software.
What financial reports do we need to generate monthly?  We need these reports to be a simple process.The Balance Sheet and P&L (Profit and Loss) statement in Quickbooks looks are overwhelming.

We are not accountants and double entry lines are confusing.We have reconciled our checkbook successfully.  YEAH!
Any advise would be helpful,
Hilary S

Hilary,

I’m glad that my books were helpful.  Your organization sounds as if they are getting things set up well.  I hope you’ll be serving homeschool families for a long time to come.

I think Quickbooks (QB) can be as simple or as complicated as it needs to be. The reports your treasurer generates is dependent on what the board wants to see. When I was treasurer, I gave my board a P&L (Profit and Loss) statement.  They really liked to see the budget in one column and actual P&L in another column.  Then they could see how we were doing compared to our budget. This report can be generated in QB as a Budget Report.
I also created a mini balance sheet at the bottom of the P&L.  I took the amount in the checking account and then listed payments to be made.  This gave the board an idea of how much cash we had on hand and where it was planned to go.

If the P&L statements in QB are too overwhelming, then perhaps you’re not using QB correctly.  I frequently see QB users make their Chart of Accounts too long.  Then the P&L becomes 2-3 pages long.  I recommend that a P&L be condensed into one page or less.

If your treasurer would like my help in setting up QB, I’d be happy to help.  She can e-mail me with what needs to be done and I’ll give you an estimated cost.  I also do QB training over the phone. I keep things as simple as possible.

I hope that helps.  I wish you the best of success! (Congrats on balancing the checkbook!)

Carol Topp, CPA


Off to Home Educators Assoc of Virginia (HEAV) Convention

June 10, 2009

For the next few days I will be at the Home Educators Assoc of Virginia (HEAV) Convention in Richmond, VA.

They have a pretty busy schedule for me. I’ll be giving workshops on:

  • Budget Is a Dirty Word: Money Management for Those Who Hate to Manage Money
  • Wanna Be a WAHM? The Pitfalls and Possibilities of Being a Work at Home Mom
  • Small Business for Teenagers
  • Is Your Homeschool Group Ready for the Next Step? Becoming a 501c3 Tax-Exempt Organization
  • How to Start and Manage a Homeschool Organization: Boards, Budgets, and Bylaws

(see full descriptions of the workshops here and get the handouts here)

I’ll also be attending the homeschool leaders lunch and I am serving on a Q&A panel for leaders. I hope to meet some of you.

If you’ll be at HEAV, come by my booth #237 or to a workshop and say hello!

Carol Topp, CPA


Ten Ways to Torture a Tired Leader

May 6, 2009

My friends Kristen and Denise of Homeschool Group Leader have a sense of humor.

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You have to be able to laugh at human weaknesses if you are a homeschool leader.

Here are their 10 Ways to Torture a Tired Leader:

Top 10 Ways to Torture a Tired Leader!
  1. Don’t Listen ~ Talk all during the announcements, the meeting discussions and while your leader shares important information.
  2. Be Clueless ~ Ask your leader repeated questions about the information that you didn’t just listen to. Send them one-line questions in individual emails spread out over time.
  3. Fill Other Members’ E-mail In Boxes ~ Send your repeated questions and comments to everyone on the list, filling all in-boxes, instead of only the in-box of the leader to whom you’re writing.
  4. Quit at the Last Second ~ Volunteer to help with, or better yet–lead–an activity, then back out at the very end, leaving it all for the leader to complete.
  5. Gossip ~ Discuss the leader’s clothes, kids, home life, homeschool, and leadership style –openly and with great fervor.
  6. Complain ~ Never be happy with the place, the decisions, the agenda, the trips, the teachers, or the way the leader looks at you.
  7. Show Up Late ~ Choose carefully the events that need to start at a specific time and strategically and systematically show up 15 or 30 minutes late.
  8. Never Help Clean Up ~ Don’t stay after any event and help clean up. After all, isn’t that what the leader is there for??
  9. Don’t Watch Your Kids ~ Let them run wild or talk while someone else is talking. Then get offended when someone asks them to be quiet or to sit down.
  10. Be Demanding ~ Always express your opinion as fact. Be sure you speak every time someone else does, making sure that your frustrations and wants are very clear each time.

Recognize anyone?  Maybe you at times? Some of these are too close to the truth to be truly funny!

Carol Topp, CPA


Observations from the Midwest Homeschool Convention

April 29, 2009

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

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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!

heavlogo

Carol Topp, CPA


Board, Bylaws and Budget

October 18, 2008

A homeschool leader is asking some excellent questions about writing bylaws, establishing a board and collecting money.

Dear Carol,
I am co-directing an established homeschool group and we are in the process of writing by-laws. My question is, is it okay to not allow members to have a vote pertaining to the decisions of the homeschool board? Can the by-laws be set up to allow suggestions and recommendations from the members at the approval of the board? Our concern is to protect the vision of the homeschool group. Also, is it legal to initially appoint a board without a vote and then fill vacancies at the discretion of the established board? When it comes to handling dues from the members are there guidelines that must be followed such as becoming a formal non-profit? Can we handle dues without needing to apply for non-profit status or 501c3?
Your website has been a tremendous help to us as well as your article in the Winter 2006-07 issue of The Old Schoolhouse. Thank-you for your time and ministry to homeschooler’s.
Misty M
Misty,
You have asked several good questions. Your group is fortunate to have you as a co-director.


Yes, it is OK to not have members vote; I have been on several nonprofit boards that do not have members vote.

Yes, you can set up your bylaws to allow final approval of ideas to be a board responsibility. You may establish a practice of considering suggestions and recommendations; you may not need to formalize the practice in the bylaws.

Yes, you can appoint a board without a member vote. This is done quite frequently on nonprofit boards, especially fine arts boards (i.e., art museums, symphonies, ballets, etc). Many boards find their own members from interested members, volunteers or patrons.

You can accept dues without being a 501c3 or having nonprofit corporation status. If you have a large surplus you may wish to consider nonprofit incorporation to legally establish your group as a nonprofit. My co-op filed for nonprofit incorporation last year because we have been carrying a large cash surplus for several years. We didn’t want our state to think we are a for-profit business and charge us business income tax. These articles might be helpful:

Do We Need to Incorporate?
7 Great Reasons to Incorporate

As a guideline, your board should remember their fiduciary duty (duty of care and duty of loyalty) to manage the funds with the purpose/mission of the organization in mind and not for private gain or benefit.
The board’s job is

  • to provide for fiscal accountability,
  • approve the budget, and
  • formulate policies”

(from “Major Duties of Board of Directors),

In other words, think first of what is best for the organization.

I hope that helps!

Carol Topp, CPA