Changing chartered organization

[shortridge]

Better let the Mobile Area Council know that. Also a whole bunch of other councils and districts around the country that have this information posted on their Web sites...

 

From 2008 Fiscal Policies and Procedures for BSA Units:

 

"Remember, the chartered organization owns the unit, and all funds used by the unit remain the responsibility of the chartered organization so long as the charter issued by the BSA remains in place."

 

http://www.bsamobile.org/forms/taxdeductsummary.pdf

[gwd-scouter]

I don't know if our CO would be so harsh as to say that if we leave they will keep our trailer, it's contents, and the money in our bank account. They haven't contributed anything to our Troop. I suppose it's possible though.

 

LisaBob - only one boy in our Troop is a member of the church. I'm not sure the size of the congregation, but I think a fair estimate would be at least 1000, perhaps twice that. Very big church. I don't know about the church affiliations of our new crossovers.

 

Two of our Committee members are long time members of the church. One is our former SM, the other a former ASM. Even though their sons are in college now, these men continue to help out the Troop with BORs. They, and a few other interested folks, said they would take up our cause with the church.

 

My hope is to talk with the church leadership again and help them understand the difference in a Boy Scout Troop compared to other youth organizations. Our Troop has finally started working the patrol method and are ready to welcome the crossovers into a new scout patrol with a very well experience Troop Guide to help them. Putting our Troop into one small room will not be conducive to building and maintaining the patrol method and therefore the health of our Troop. Surely they would let us use another room in the building for one night a week.

 

As always, I'm hopeful things will work out.

 

 

[Kahuna]

The equipment issue is a good reason to consider having a 501©(3). We had the corporation own the equipment and lease it to the CO for a dollar a year.

 

Paid off when he we left a new CO after less than two years and the COR wanted to keep our equipment. When we disbanded the unit later, the corporation parceled out the equipment to units who needed it.

[fleetfootedfox]

The BSA discourages units from filing for their own tax status separate from their CO.

[Kahuna]

>>The BSA discourages units from filing for their own tax status separate from their CO

[John-in-KC]

From having observed the creation of a couple of non-profits outside Scouting:

 

A unit will need:

- Access to a decent tax attorney, to get through the Federal/State filing wickets to qualify for status.

- Access to a good CPA with bookkeeper support, because 501©(3) books are subject to IRS audit.

- The ongoing services of a superb Troop Committee Secretary, as the records of unit business meetings are subject to inspection.

 

From my experience, it's a best practice to build and maintain a good relationship with a Chartered Partner.

 

As an aside, good "Plan B" Chartered Partners are area VFWs and American Legions: Both have defined national missions to charter BSA units whose "former" partners no longer want them.

[Kahuna]

You really don't need a tax attorney or a CPA. Most attorneys can work through the process, but you are dealing with the IRS.

 

A good set of books on Quicken or QuickBooks will do just fine if the IRS audits you.

[John-in-KC]

Kahuna,

 

You're also dealing with your State's non-profit corporation law. That can be far more sticky than the Federal wickets.

 

I've seen some folks try to organize charitable non-profits, again outside the BSA community. More failed than succeeded, because they did try to it themselves.

 

Beavah? Your thoughts?

[Kahuna]

>>You're also dealing with your State's non-profit corporation law

[gwd-scouter]

Update on our situation. It seems several people went to bat for our Troop with the church. Church head called me and asked if we could meet to look around the church buildings and see if we couldn't come up with something that will work for both of us. That meeting is this Thursday. He says the church wants to support the Troop and will work with us to find us suitable meeting space. Still, it won't be 'ours' like the basement we are moving out of this Saturday. We won't be able to store anything or put our things up on the walls. The boys are really disappointed about moving our of the basement because they've really turned it into their Scout Home. But, we have to go with our CO's wishes.

 

He did mention something about making an arrangement for the short term, for this year. I'm not sure what that means. It may mean that they will move us again next year. We have a new COR, a long time member of the church and on the church's finance committee, an Eagle Scout, who is eager to get started working on the Troop's behalf. None of our CORs in the past have actually done anything, so I'm hoping this man will help us out. FYI - the church has never selected the COR for the Troop. We have always had to find someone ourselves and then get the church's OK.

 

Several churches in our town have expressed interest in having a Scout Troop. I guess we'll just wait and see what next year brings us.

[fleetfootedfox]

"However, you are referring to obtaining a tax exemption certificate that allows a unit to buy equipment without paying sales tax."

 

Kahuna, you should do your homework before you start correcting statements or reading things into them that were not said.

 

Please see this link:

http://www.longspeakbsa.org/info/IRSForm990-N.pdf

 

This is a memo from the Nation Office to units. In this letter, it specifically says, "We continue to strongly discourage units from filing for their own separate 501©(3) tax-exempt status with the IRS."

 

[Kahuna]

Scouter 760:

 

I stand corrected (although your tone leaves something to be desired). I was not aware of National's letter. AFIK, it hasn't been emphasized much in either of the councils I've been in.

 

In any case, there are some cases in which it pays off. As I said earlier, Sea Scout units who accept donated boats will almost invariably have such a corporation. Large troops who have a lot of expensive equipment may benefit from it also.

 

My experience has been that it is not as complex or fraught with peril as National apparently thinks. Of course, National is into the Chartered Organization business and might feel this somehow denigrates the partnership.

 

 

[Buffalo Skipper]

Kahuna,

Your comment about Sea Scout Ships set off bells in my head, and it kind of makes sense. If a unit is chartered by another non-profit organization (and by a large percentage, most units are), then the charter's 501c3 covers the chartered unit. Admitedly, not all charters see it this way, but that is really not the point here. I think that may be intended to cover the bulk of the units, and the letter is really intended for that purpose.

 

Obviously, for units chartered by business or other non- not-for-profit organizations, a 501c3 needs to be in order, but only if one is to receive donations for which the doner wishes to claim an IRS deduction. State tax exemption status is quite another story, and varies greatly from state-to-state. Some states make this easy (such as Florida, which has no state income tax), while others may be more involved.

 

But again, the intent of the BSA letter may well have been an attempt to see that units fall under their charter partner's orgizational status.

 

Just a thought.

[AlFansome]

 

It's more complex than that.

 

Just because a group is tax-exempt or non-profit doesn't mean that contributions to the group are tax-deductible.

 

For example, my Kiwanis club is 501©(4) not 501©(3). Donations to it are NOT tax deductible by individuals (except perhaps as a business expense). Likewise, donations to the 5 units we sponsor are also generally not tax-deductible even though we are a non-profit group. We are in the process of creating a foundation and converting over to 501©(3).

 

In addition, if a chartered org is hesitant to allow a unit to use it's EIN/TIN, then it's possible to set up a "Group Exemption" through the IRS whereby the chatered org's tax exempt status can be used by subordinate groups (like a scout unit) that uses a different TIN/EIN than the parent organization.

 

For lots of gory details, go to http://www.lectlaw.com/files/tax13.htm and http://www.nonprofitlawblog.com/home/2007/02/group_exemption.html.

[fleetfootedfox]

"According to recent research published in the Journal of Personality and Social Psychology, I've only a 50-50 chance of ascertaining the tone of any e-mail message. The study also shows that people think they've correctly interpreted the tone of e-mails they receive 90 percent of the time."

 

Ah, well. What's important, hopefully, is the information.

 

The information on 501©(3) vs. 501©(4) is interesting, although I believe Kiwanis recently changed to 501©(3), didn't they?

 

There is also 501©(19), which covers the American Legion Hall. Contributions to such veterans groups are usually tax deductible.

 

Anyway, the original posting is about changing CO's, and the rest came from the question of who owns the troop gear. I have certainly heard it both ways, but as they say "Posession is nine tenths of the law." My non-professional opinion is that if you leave and take the gear with you, the CO is not likely to try to come after you to get the gear back. If they do, you explain to them that you will gladly give it back, but do they really want to hurt the boys and possibly damage their organization's reputation in the process?