Forming your own Chartered Organization

[MrMic-O-Say]

I know that some groups have formed independent "groups" to become the Chartered Organization for their Scouting Units.

 

I would appreciate everyone's input on the pros and cons of this method of chartering....

 

I have recently done this for our Crew, and I am curious about other's experiences.

 

Randy

[Bob White]

I am not saying that this method has never worked. but I can say that it has been my experienced that it seldom works. Here are some things to consider.

 

Has the group you have formed done the required governmental filing to be a legitimate non-profit organization. If not..every dollar brought in by the crew is income to your organization and is taxable by the U.S. government. (At last report failure to pay income tax is not looked on kindly.)

 

The chartered Organization is responsible for providing a meeting that is safe and suitable for a year round program and regular meetings. I point this out because if you have a facility then you probably have liability coverage held by the organization for incidents that happen on the property. If you are meeting at someones home then that would be the personal burden of the homeowner.

 

While we are on the suject of insurance...how are you protecting your equipment from loss due to theft or fire? Do you have vehicles, since the Crew is a club that meets within the charter organization, if the charter organization is not a legal entity, how would you register a vehicle or get insurance coverage?

 

Your Charter Organization is responsible for selecting and approving leaders. Should a lawsuit (for whatever reason) be pressed against your organization you would be covered by BSA insurance, BUT only if you have not violated any BSA policies. What if someone did side-step a policy and the BSA withdrew their protection?

 

Unless you have separate liability protection for the Charter organization and its officers and representatives, each of you could be held personal responsible for any wrong doing, fees and penalties leveled aginst you should you loose the suit. Even if you won you would have to pay legal fees from your own pocket. Now of course this may never happen. But what if it did? How badly would you miss your home?

 

What device will insure the continuation and growth of the charter organization to maintain the the membership growth and resources of the Crew?

 

Do some groups do what you suggest? Sure. Do they all have problems? No. what are the chances you would ever have the kinds of problems I oulined? Call it in the air...Heads or Tails!

 

Bob White

 

 

 

[MrMic-O-Say]

Thanks Bob!

 

In answer to your first question...Yes we are a bonified official 501c3. In fact, that was our main impetus for forming our own CO. We had a few missed fund-raising opportunities due to the lack of our own federal tax ID. It only takes once or twice to miss out on 4 digit checks to get one motivated.

 

We do not have our own facility, but have we do have permanent housing offered to us by a local church. I have never specifically asked them about the liability question, should something happen on site, but I will do so. I know they allow other outside groups to meet there and they also run an independent day care, so I imagine that they are covered for anything that happens on their property.

 

There is no coverage on our equipment, unless there would by chance be a clause related to the church we meet in. But then again, this if for a Dance Team, if there was a fire, items lost are not going to be simply re-purchased. We own no vehicles, nor at this time, do we intend to. We rely on personal vehicles for transportation.

 

Regarding leadership liability, I have been somewhat aware of this. To my knowledge, we aren't skirting any official policies. I know we do not currently have liability for the Board of our Chartered Org, but it is something we have discussed.

 

Esentially, the crew feeds the "membership" of the Chartered Org. The names listed as the BOD of the CO are all long time members of the group. Essentially each member of the CO is also an integral adult member of the crew.

 

Personal liability of the Board of the CO has been my biggest concern. I'm no lawyer, but would some sort of hold harmless agreement signed by members/gaurdians be of any use in this situation? I know that wouldn't provide a complete measure of security as those things can be circumvented, but really the extent of the risk we take with the members is traveling from meeting location to performance. We dont focus on other activities. With few exceptions, the vast majority of our members are active and are required to be primaried in their own units and then they hold a secondary registration with the Crew.

 

Other thoughts?

 

 

 

 

[Bob White]

I'll offer a coupleother thoughts then back off and let others comment. A hold harmless agrement Would probably not hold water (but a lwyer would need to answer for sure) and a parent would be illadvised to sign it paper allowing you to do whatever you want and not sue if you are negligent. What you need I believe is to have a personal liability umbrella independent of the BSA coverage.

 

Youth are not primary and secondary registered. They are dual registered. Each unit membership is distinct.

 

Bob

[matuawarrior]

We formed our own Chartered Organization 5 years ago. We were chartered with a public middle school for 4 years. The Principle was very Scout friendly. When he was trasferred to another school the incoming principle was hostile towards scouting. We had no choice but to look for a new home. We hit many dead ends looking for a new charter organization. We finally decided to Charter the units ourselves. We had a troop, a pack, and 2 posts.

 

It was not an easy task. Fortunately, I have a friend who is a lawyer and also one of our ASM's. He helped us with all the legal aspects of forming a non-profit organization. He is also on the BOD.

 

The liabilty issue did come up but we did have to get the needed insurance, which was not much.

 

When we started five years ago, it was a struggle. Now as long as our books are in order (we have an outside auditor), we do our annual financial statement to a local media, file with the territory Dept. of Rev and Tax, and our annual board meeting. We're pretty much set.

 

There are pros and cons to having your own non-profit organization. I believe the pros out weight the cons by a large margin.

 

We are currently meeting in the village community center until our HQ's is built next year. All material and work are in kind donations by local businesses. The land that our new HQ's will be built on was given to us in a perpetual lease. As long as the foundation and it's BSA units are active and growing. We have a home.

 

We usually apply for grants locally, within the region, and nationally. 20% of monetary donations go to our administrative costs, which we have kept to a minimum.

 

It was not easy but looking back the last five years. The foundation did alot. We have our goals to keep us focused to move forward. We grow our leaders.

 

Matua

 

[SMT376Richmond KY]

Bob

 

"Has the group you have formed done the required governmental filing to be a legitimate non-profit organization. If not..every dollar brought in by the crew is income to your organization and is taxable by the U.S. government. (At last report failure to pay income tax is not looked on kindly.)"

Our Troop is not a recognized non profit organization by the gov. However, to open a troop checking account we had to obtain a Tax ID number as several banks would not let us open an account without one. Our Pack already had an account while I was CM so we didn't have this problem. However, the Pack also never to my knowledge paid taxes on our popcorn sales. Do you mean we have to pay taxes on what we take in from popcorn sales or fundraisers every year?

 

[Bob White]

I'm no accountant, but my understanding is that unless you are a certified non-profit organization then you must be a "for profit" organization and so your income is taxable. Technically that money is not the troop's it belongs to the Charter Organization. So the officers of the CO would be responsible for the taxes. Again you need to talk to an accountact or tax lawyer, but this is my understanding of the situation.

 

Bob White

[SMT376Richmond KY]

Quess I'll tell the CO rep this so he can check into it. I know they are a non profit orgnization. But when I was CM they never asked for any information on the Packs finances but then he had set up the Packs account initially so he may have been receiving reports from the bank too.