Seeking Advice: Parent Booster Club as Chartered Org

[physics32]

We’re currently chartered by a Methodist church.  We returned from (an awesome!) summer camp to discover that our unit and assets will likely be transferred to the council around the end of the month.

I’m curious if anyone here has experience in creating a parent booster club as a 501c corporation and becoming the chartered organization for a troop/pack.  What kind of insurance coverage does the booster club need?  Are your corporate officers the same as your committee members?  Any advantages/pitfalls to consider?

 Thank you!!

Sean

 

 

[curious_scouter]

In the Rules and Regulations there is a section about Charters to Groups of Citizens:

Quote

Charters to Groups of Citizens
While the formation of units in connection with existing organizations is preferred, when conditions warrant, a charter may be granted for
the formation of a unit independent of any relationship with an existing organization, provided, however, that the applicants are citizens
of the United States who subscribe to the principles of the Scout Oath, whose interest is primarily in helping youth through the Scouting
program, and who have the resources to provide the necessary leadership, supervision, and facilities. In such cases, the obligations upon
the applicants for a charter are the same as those required for organizations.

Establishing a 501c3 doesn't seem to be 100% mandatory then.  In the past I shied away from doing 501c3's for several groups I established over the filings and compliance requirements being pretty stiff and either challenging for a "regular person" to navigate or an expense for hiring a professional to maintain.  There are probably others who will say it's a piece of cake.  Just sharing my experience on establishing a real charity.

[scoutldr]

Think long and hard about the personal liability you are assuming if you do this.  I personally would not put my home and personal assets at risk.  Even in the old days, I carried $3 million in umbrella liability at the advice of my financial advisor.

[T2Eagle]

3 hours ago, scoutldr said:

Think long and hard about the personal liability you are assuming if you do this.  I personally would not put my home and personal assets at risk.  Even in the old days, I carried $3 million in umbrella liability at the advice of my financial advisor.

I don't want to down play the risks here, but they also shouldn't be over stated.  The whole point of a corporation, of any type, is that they protect individuals from liability and leave it all on the corporation.  Churches may be being sued, but the church elders who run them are not.  The limit of liability for a corporation is the assets that the corporation owns.  I do think an umbrella policy is a good idea for anyone involved in youth activities irrespective of what the over lying organization is; I've had one since I became a Tiger leader decades ago.  

[fred8033]

53 minutes ago, T2Eagle said:

I don't want to down play the risks here, but they also shouldn't be over stated.  The whole point of a corporation, of any type, is that they protect individuals from liability and leave it all on the corporation.  Churches may be being sued, but the church elders who run them are not.  The limit of liability for a corporation is the assets that the corporation owns.  I do think an umbrella policy is a good idea for anyone involved in youth activities irrespective of what the over lying organization is; I've had one since I became a Tiger leader decades ago.  

You have the correct answer.  ... The key then is to keep the organization in a healthy state.  i.e.  still registered and running.  

I always wondered if the "Parent Booster" approach might be best.  ... In another words, all parents of scouts should be members of the parents booster club.  Put their name down as boosters.  ... The tangent is if they don't want to be part of the parent boosters, then perhaps they should find another scout unit for their scout.  ... Not trying to be mean ... just trying to get all parents with a piece of the ownership to get it right ... boosters than run election to select the next CC and board members.  

That club if structured right should provide liability protection and shield the individuals. 

[jcousino]

Sound nice , but not sure why a council would give a charter to a group that has no assents and little money to cover liability costs alone or why would i risk offering my building if you can not supply proof of liability  coverage for the  building?

 

Edited June 20, 2022 by jcousino

[curious_scouter]

Consistent with the don't overblow, but don't underestimate the risks sentiment (which is a good point) a corporation only provides so much protection.  Officers of the corporation are quite often included in lawsuits, especially if there is some presumed negligence.  I've run a 501c7 for many, many years and we carry officers and board liability insurance for this very reason. 

If you elect to explore the formal charity route, invest in professional advice from an attorney and an accountant who have good experience in these matters.  They will know all the latest scuttle and they will be familiar with your state's rules as well as the IRS requirements.

[T2Eagle]

4 hours ago, jcousino said:

Sound nice , but not sure why a council would give a charter to a group that has no assents and little money to cover liability costs alone or why would i risk offering my building if you can not supply proof of liability  coverage for the  building?

 

So there's a lot of misunderstanding about the idea of "liability". 

From council's point of view their liability, and their risk, is based on their actions.  If they are negligent in some action they take or fail to take they will be held liable for that action and damages based on that will be paid from their assets.  Whether the CO has or doesn't have assets doesn't affect their risk.  In the new model they are probably taking on more risk because they are now acting as CO and have a greater responsibility for supervising the actions of a troop's leaders --- and so more chances to be negligent.  Keeping that risk on a CO is probably less risky for them.

As to actual assets, I would guess that many current COs have effectively no assets.  Your average Elks, VFW, small old line protestant congregation, etc. probably has a few months operating cash in the bank plus their building, which in many instances is probably a restricted asset in fact, or effectively so because it is core to their mission and wouldn't be forfeit even in the event of bankruptcy.

[yknot]

14 hours ago, T2Eagle said:

 Your average Elks, VFW, small old line protestant congregation, etc. probably has a few months operating cash in the bank plus their building, which in many instances is probably a restricted asset in fact, or effectively so because it is core to their mission and wouldn't be forfeit even in the event of bankruptcy.

Speaking of Elks, late last year/earlier this year they were told not to recharter scout units although some still did. Supposedly there was going to be an update in a month or few. I have not seen anything but has anyone else? 

As far as assets and churches, many are failing so it's not clear how core some assets would be considered.

[physics32]

We’ve decided to establish a non-profit corporation, made up of parents, to own most of our troop’s current camping equipment/troop tents/uniform library.  Being a UMC unit, we had foreseen some sort of recharter on the horizon for the last couple of years.  We’ve kept this parent purchased/owned equipment as loaned from individuals rather than seeking reimbursement, in order to give us flexibility and prevent it from being sold off or redistributed.  

At this point, we won’t seek to be the chartered org, but it may be an option in the future, especially if our council doesn’t like the new agreement as appears to be the case with Michigan Crossroads Council.

[MikeS72]

2 hours ago, physics32 said:

We’ve decided to establish a non-profit corporation, made up of parents, to own most of our troop’s current camping equipment/troop tents/uniform library.  Being a UMC unit, we had foreseen some sort of recharter on the horizon for the last couple of years.  We’ve kept this parent purchased/owned equipment as loaned from individuals rather than seeking reimbursement, in order to give us flexibility and prevent it from being sold off or redistributed.  

At this point, we won’t seek to be the chartered org, but it may be an option in the future, especially if our council doesn’t like the new agreement as appears to be the case with Michigan Crossroads Council.

It appears that there are quite a few councils who do not appear to care for or support the UMC Affiliation Agreement.

By the way, I noticed the noblest of creatures in your profile pic!  Beaver Patrol, MT-14 1972 here!

[MattR]

9 hours ago, physics32 said:

We’ve decided to establish a non-profit corporation, made up of parents, to own most of our troop’s current camping equipment/troop tents/uniform library.  Being a UMC unit, we had foreseen some sort of recharter on the horizon for the last couple of years.  We’ve kept this parent purchased/owned equipment as loaned from individuals rather than seeking reimbursement, in order to give us flexibility and prevent it from being sold off or redistributed.  

At this point, we won’t seek to be the chartered org, but it may be an option in the future, especially if our council doesn’t like the new agreement as appears to be the case with Michigan Crossroads Council.

This might become a very important topic - how to protect a unit's resources and volunteers from nefarious councils and legal fallout from bad things happening. I think the term is due diligence. It would be nice if the BSA had training for this going forward but that will never happen.

I hope this works out for you. If so, I hope you come back and share.

[mrjohns2]

9 hours ago, MikeS72 said:

It appears that there are quite a few councils who do not appear to care for or support the UMC Affiliation Agreement.

Hasn’t it only been public for a week or 2?

[mrjohns2]

On 6/20/2022 at 3:02 PM, jcousino said:

why would i risk offering my building if you can not supply proof of liability  coverage for the  building?

That is something really easy to answer. It is your council who carries the liability insurance for the unit no matter the underlying CO. Just ask your DE for a copy naming the building owner as a named party. It is very easy and they do it all the time. 

[Tron]

On 7/2/2022 at 7:09 PM, MattR said:

This might become a very important topic - how to protect a unit's resources and volunteers from nefarious councils and legal fallout from bad things happening. I think the term is due diligence. It would be nice if the BSA had training for this going forward but that will never happen.

I hope this works out for you. If so, I hope you come back and share.

Probably the easiest option is to run units slim: minimal equipment on the property book; liquidate rainy day fund into action now to prevent LC snatching later on.