“We’re just a bunch of moms meeting together,” a homeschooling co-op leader protested. “We don’t want all the hassles of bank accounts, board meetings and by laws.” Frequently, when assisting homeschool groups, I encourage establishing a board and creating by laws for their group. Some leaders may wonder why a board and by laws are needed at all. Here are some reasons:
To Manage Growth
Some people like their organizations to remain small, unstructured and hassle-free. There are tremendous benefits to the small group model. In a small group, close relationships can be formed, bookkeeping is simple and meeting in a home is possible. But as the homeschooling movement grows, so do our co-ops, support groups and other organizations. We become victims of our own success. Some groups crumble under the weight of larger memberships, but more frequently, I see organizations rise to the challenge and become more organized and enlarge their memberships. They are serving the needs of more families by growing.
To Look Like a Non Profit and Apply for Tax Exemption
I was talking to Cindy, a homeschool leader, who told me she didn’t have a board, or by laws and kept co-op funds in her personal checking account because, as she said, “We’re not an official nonprofit. We don’t have tax exempt status with the IRS”
Actually, Cindy’s organization should structure themselves as a non-profit organization, even before applying to the IRS for tax exempt status. The IRS looks for proper structure and a history of operating with a board, among other things, before it will grant tax exempt status.
I recommended that Cindy open a nonprofit checking account for the co-op and not in her personal name, establish a board, and create by laws. After a year or so, the co-op can begin applying for tax exempt status with the IRS. Cindy understood that it is better to establish the proper structures early on to establish a history as a non-profit.
Avoid Being Personally Liable
A treasurer opened a personal checking account to be used for her homeschool co-op’s purposes. Checks were written to the treasurer’s personal name. I was asked, “Does that put liability on the treasurer?” I believe the treasurer is in a very uncomfortable situation. The cash in her personal account will be seen as her personal income in the eyes of the IRS. I’m sure she doesn’t want that! I advised her to open a new non-profit business checking account and have checks written to the organization in the future.
The treasurer should also protect herself by reporting the financial status of the organization to the board regularly. This requirement should be written up in the by laws, such as, “the duties of the treasurer include regular reporting to the board of the financial position of the organization.” The purpose of by laws is to protect the organization from mismanagement. The by laws, if followed, create an excellent form of protection against personal liability.
Forming a Board
If your homeschool group is growing or already large, you cannot manage it alone, so gather people to help you carry the burden. The role of a homeschool leader should be to delegate responsibilities so that everyone has an opportunity to contribute to the group. Choose people who are organized and can make decisions. Look for people who show an interest and commitment to your group.
Approach a potential board member personally. Emphasize their strengths and contributions to your organization and ask if they would be willing to help in a leadership role. They may even feel honored to be chosen. One leader knew my weakness for flattery when she approached me. “I’m surrounding myself with the smartest, best people I know,” she told me,” and I want you.” She made me feel great and, naturally, I said I’d help!
Keep board member tasks well-defined and limited. Some people are reluctant to volunteer for leadership because they fear there is no getting out later! If you define their role specifically and limit the term to one year, they may commit freely. Our co-op found it difficult for the co-op director to make morning announcements because she had so many responsibilities. Our board looked around and noticed that one particular woman was always there on time (or early), had a strong voice and was already organizing field trips. We asked her to take over the job of doing morning announcements for the next semester. We complimented her organizational skills and promptness! She agreed and our director had a huge weight lifted!