Charter Org bankrupt?

[Krampus]

It brought up another thought in my mind.  The current church is the Charter Organization.  If they no longer have a building, they (& the Troop) will no longer have a place to meet.  How difficult is it to transfer the charter to the new organization?  This may be the best situation for us.  Or may be to find another, more stable CO.

 

We were able to find a home for a pack that lost it's CO after the 2013 membership policy change. We met with our CO and asked if they'd be willing to take on a pack. Two meetings and the deal was done.

 

Now the districts had an issue because the unit moved from one to the other. The losing district wanted the pack to stay BUT didn't have a new CO lined up and the clock was ticking (less than a month) until the CO booted the pack out. Oh, and it was August so the Cub year was just starting too.

 

In the end the losing district ate the loss and the pack moved within two weeks. Done.

[blw2]

What bothers me in all this is everyone here is assuming the assets "belong" to the CO. They do....to a degree.

 

According to BSA's own Rules and Regulations (Article XI, Section 2 (b) says,

 

"In the case of a chartered organization [declaring bankruptcy], any funds or equipment which may have been secured as property of the unit shall be held in trust by the chartering organization or the char- tered local council, as may be agreed upon, pending reorganization of the unit or for the promotion of the program of the Boy Scouts of America."

 

So the gear and money would not default to the CO, but rather to a trust to be held for the unit or a unit. Clearly BSA does not intend to allow the CO to liquidate the gear and use the unit money to pay off debt.

I've read other BSA documents which seem to say that after paying off any debts, the money will go to either the CO or council, as agreed upon...

 

and lots of other things which indicate that these bsa rules and suggestions about CO relationships are the way it is, "unless the CO wants to do it differently" or some such thing.

I did a fair bit of reading on this trying to get our troop's stuff cleaned up and tied to the parish (mailing address etc...)

although I'm really starting to think this was a bad idea.  

 

Might be better to set up an LLC for the troop's assets, even if the CO is not that LLC.  

Bank account under the LLC, trailers owned and registered by that LLC, etc....

Then the CO still maintains the responsibility to provide meeting place, etc...

The unit has the responsibility of "representing" the CO, maybe doing some service projects for them, etc...

I'm starting to wonder if this wouldn't be a way to go....

 

and honestly, i think this is how our church's admin thinks it is anyway.

[Krampus]

I've read other BSA documents which seem to say that after paying off any debts, the money will go to either the CO or council, as agreed upon...

 

The doc I was referring to his here.

 

Section XI does a decent job of outlining how any funds raised by Scouts, for Scouts, should be administered:

 

Clause 1 (b) Purpose. All money raised by or received for the benefit of a unit or local council and all property acquired by a unit or local council shall be deemed to be received or acquired solely for the benefit of Scouting as interpreted and promoted by the Boy Scouts of America.

 

Clause 2 (b) Unit Obligations. In the event of the dissolution of a unit or the revocation or lapse of its charter, the unit committee shall apply unit funds and property to the payment of unit obligations and shall turn over the surplus, if any, to the local council, if there is one, or if there is no local council, dispose of the same in accordance with the direction of the Executive Board of the Boy Scouts of America. In the case of a chartered organization, any funds or equipment which may have been secured as property of the unit shall be held in trust by the chartering organization or the chartered local council, as may be agreed upon, pending reorganization of the unit or for the promotion of the program of the Boy Scouts of America.

 

These two sections would seem to suggest that the urban legend that the CO "owns all assets" may not entirely be the case. The way I read it, it seems the assets would be held by the council OR the CO up until such a time that a new unit can be formed or the assets used by another Scout group. The assets very clearly are "ear-marked" for Scouting, and not simply CO property.

 

Or am I misreading this?

Edited March 15, 2016 by Krampus

[blw2]

Yeah Krampus, that is becoming my take on the issue too.

 

I think it's a bit more grey than that though... maybe....

 

 

This document, that I was pointed to by council's accounting folks in response to questions I had about setting up bank accounts

http://www.scouting.org/filestore/financeimpact/pdf/Fiscal_Policies_and_Procedures_for_BSA_Units_March_2015.pdf

clearly supports the idea that the unit is "Owned" by the CO

 

But like I said before, I'm starting to think there are intentional loop holes throughout, so that CO's can look at it whichever way they want to.

 

 

So with my current question about trailer registrations

This isn't the last word, but a person in our parish office is saying that the troop owns the trailers and the trailers should be registered to a leader.

I wouldn't take on that responsibility... no way... but if that's the way they want to play it, what is a unit to do?

 

Thanks for that link Krampus.  Gives me some light reading to do!

[Stosh]

One also has to take into consideration that the church congregation may find it easier to rent space or to find other facilities for its ministry without needing the current building.  Dumping the building and/or moving into a less expensive meeting facility makes sense for a struggling congregation. 

 

When I started a new congregation, I spent the first year doing worship services in the middle school cafeteria. 

 

I would suggest the leaders of this unit check out what's going on before jumping to conclusions.    As long as they are a viable entity, they still own the charter.

[Krampus]

Yeah Krampus, that is becoming my take on the issue too.

 

I think it's a bit more grey than that though... maybe....

 

 

This document, that I was pointed to by council's accounting folks in response to questions I had about setting up bank accounts

http://www.scouting.org/filestore/financeimpact/pdf/Fiscal_Policies_and_Procedures_for_BSA_Units_March_2015.pdf

clearly supports the idea that the unit is "Owned" by the CO

 

Oh I agree. The unit *is* "owned" by the CO, but the assets of the unit were raised for the sole purpose of Scouting. So I read these documents to say, "Sure, Mr. CO, you own the unit. But the monies and assets of the unit MUST be applied to Scouting, nothing else." So if the unit goes under, the council will work with the CO to either a) build a new unit, or b) transfer those funds/assets to be used for the purposes of Scouting. 

 

That's my take anyway.

[Stosh]

Oh I agree. The unit *is* "owned" by the CO, but the assets of the unit were raised for the sole purpose of Scouting. So I read these documents to say, "Sure, Mr. CO, you own the unit. But the monies and assets of the unit MUST be applied to Scouting, nothing else." So if the unit goes under, the council will work with the CO to either a) build a new unit, or b) transfer those funds/assets to be used for the purposes of Scouting. 

 

That's my take anyway.

 

Under those conditions, I would agree with that.  Money and assets raised for scouting belongs to scouting.  As long as one understands that ISA's doesn't belong to an individual, I can go along with a CO hanging on to assets and funds until IT decides what scouting organization gets it.  They can hold it in reserve for some future scouting opportunity or give it to a unit of their choice.

[blw2]

Oh I agree. The unit *is* "owned" by the CO, but the assets of the unit were raised for the sole purpose of Scouting. So I read these documents to say, "Sure, Mr. CO, you own the unit. But the monies and assets of the unit MUST be applied to Scouting, nothing else." So if the unit goes under, the council will work with the CO to either a) build a new unit, or b) transfer those funds/assets to be used for the purposes of Scouting. 

 

That's my take anyway.

 

does anyone happen to know if the recharter "contract" that the CO signs addresses this ownership question directly?

I think I've got a copy of an old pack charter, so I'll go have a look when i get a minute.... I'm guessing a troop one would be the same.

 

Otherwise, do you know where else it might be specified by contract

 

I think I need to dig this out to help with our current CO uncertainty... as a help to our COR.

[Krampus]

Under those conditions, I would agree with that.  Money and assets raised for scouting belongs to scouting.  As long as one understands that ISA's doesn't belong to an individual, I can go along with a CO hanging on to assets and funds until IT decides what scouting organization gets it.  They can hold it in reserve for some future scouting opportunity or give it to a unit of their choice.

 

Well, ISA's are a slippery slope. If my Scout raises money specifically for summer camp and does not go, I expect he will be able to use that (until used up) to defer his other costs.

[Krampus]

does anyone happen to know if the recharter "contract" that the CO signs addresses this ownership question directly?

I think I've got a copy of an old pack charter, so I'll go have a look when i get a minute.... I'm guessing a troop one would be the same.

 

Otherwise, do you know where else it might be specified by contract

 

I think I need to dig this out to help with our current CO uncertainty... as a help to our COR.

 

That's my point, I cannot find the "CO owns everything" stated anywhere beyond what we've already cited. If it exists it must be well hidden.

[Stosh]

Well, ISA's are a slippery slope. If my Scout raises money specifically for summer camp and does not go, I expect he will be able to use that (until used up) to defer his other costs.

 

That's the slippery slope part I avoid due to my personal ethics.  Using a tax exempt status to raise money for oneself doesn't bode well with me.  I prefer the A Scout is Thrifty, meaning he earns his own money and pays his way.... and his taxes

[Krampus]

That's the slippery slope part I avoid due to my personal ethics.  Using a tax exempt status to raise money for oneself doesn't bode well with me.  I prefer the A Scout is Thrifty, meaning he earns his own money and pays his way.... and his taxes

 

Churches do it all the time. They raise money for youth group ski trips, missions, etc., all for Tim or Bob to go. I have seen SEVERAL churches allocate that money for the person, not just in one big kitty.

[blw2]

On the issue of scout accounts...

as a newly minted troop treasurer, for a troop chartered by a catholic parish

 

I'm starting to think that we might have been better off to not even go down the non-profit path, and instead keep it simple and run it as if we were charted by the hardware store down the road...

 

That opposes the principal "A scout is thrifty" directly

BUT indirectly my time and sanity is worth something too.

[Stosh]

Churches do it all the time. They raise money for youth group ski trips, missions, etc., all for Tim or Bob to go. I have seen SEVERAL churches allocate that money for the person, not just in one big kitty.

 

Scout units aren't exclusively the only ones that are walking that slippery slope.  None of the churches I have been involved with have operated as such.  In my clergy years, the dialog among the clergy never addressed this directly so I can't say one way or the other how many churches might be following this practice.

 

All the major trips of my youth groups had the raised money equally divided among the trip participants regardless of who raised how much. 

 

It reminds me of my sister's situation in high school.  She knew she wasn't going on the band trip because she was in the second band.  But she still went out and raised money, covered a spot on the booth when selling things at the game's concessions, went door to door... basically did as much if not more than the others in the group.

 

My parents got a call at 1:30 in the morning from the band director.  He said a kid got sick and couldn't go.  If my sister could be ready to go for a week's trip in 30 minutes and be at the school before the bus leaves she can go.  She made it.    She couldn't get ready for school in the morning in 30 minutes, but this she did.  She was the only freshman on the bus.  Servant leadership is a marvelous thing.

[Stosh]

On the issue of scout accounts...

as a newly minted troop treasurer, for a troop chartered by a catholic parish

 

I'm starting to think that we might have been better off to not even go down the non-profit path, and instead keep it simple and run it as if we were charted by the hardware store down the road...

 

That opposes the principal "A scout is thrifty" directly

BUT indirectly my time and sanity is worth something too.

How do you figure it opposes the principle of a Scout is Thrifty.  Used to be an advancement requirement that a scout opens a bank account and puts in money to save.  He earns his own way on his own by his own effort.  If he is raising money for an activity under a charity cause, he isn't earning it with his efforts.  I spaded over gardens, raked lawns mowed lawns, shoveled walks, washed and vacuumed cars for people in the neighborhood.  I had money for my uniform (complete uniform) camp equipment, and trips and I paid 100% of it out of my own money.  My parents told me that if I was going to be in scouts they couldn't afford to help out (they really couldn't).  Eventually I got a job with  paper route and washed windows at the local library.  I worked my way through scouting and I HATE TO GO OUT AND SELL STUPID FIRE EXTINGUISHERS AND HOME FIRST AID KITS TO PEOPLE WHO DON"T WANT THEM!!!  Yes, I used my outside voice on that one.  And when all was said and done I learned to do my own taxes and submit my earnings to the IRS even if I didn't make the minimum amount to claim.  IRS was till told how much I earned.

 

We have a MB that is supposed to cover this issue, but it means getting up off one's butt and going out and making sure that you're not going to be a burden on your buddies.  That's not a principle applied by most youth today.  ISA's teach the boys about the me, me, me of troop finances.  I don't play that game.