Deliberately Mentoring Leaders: How Do You Do It?

 

One of the best things about being in a homeschool group is the community of support you can receive. But do you know how to build a sense of community?

In this short podcast episode (11 minutes)  Carol Topp, the HomeschoolCPA, interviews homeschool leader Sheri Payne from Virginia. Sheri is the Director of Leader Support for HEAV, the Home Education Association of Virginia. She shares advice on many topics including how she deliberately trained and mentored other leaders.

In this episode of the HomeschoolCPA podcast, Carol Topp and Sheri discuss:

  • Holding regular meetings of leaders
  • The importance of being constantly in communication
  • Asking hypothetical questions to train your replacement
  • Let your leaders make mistakes and learn from them (just like parenting!)

My favorite quote from Sheri in this episode is, “We were constantly in communication.”

Be sure to tune into the other HomeschoolCPA podcast episodes with Sheri Payne including:

  • How to Start a Virtual Homeschool Co-op #143
  • Why You Can’t Lead Alone # 142

In the podcast, Carol mentioned the I Am a Homeschool Group Leader Facebook Group. It is a closed group (meaning you have to request to join) of 570 homeschool leaders from across the USA. You can join us here: https://www.facebook.com/groups/72534255742/

 

Phone Consultation with Carol Topp, CPA

Do you have questions about leading your homeschool organization? Carol Topp’s website, books and this podcast are a great way to learn the basics, but maybe you need advice specific to your group. Carol Topp, CPA can arrange a private phone consultations with you and your board members.

Phone Consultation: A pre-arranged phone call to discuss your questions. My most popular service for homeschool leaders. It’s like having your own homeschool expert CPA on the phone!

Cost: $75/hour to nonprofit organizations.

We can arrange a conference call so all your board members can call in from their own homes. The call can be recorded for those unable to attend.

Contact HomeschoolCPA, Carol Topp, CPA, to arrange a telephone consultation.

Click Here to request more information!

Carol Topp, CPA

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Should a Classical Conversations Director be an LLC?

I am a CC director. I am not sure what is the best option when it comes to register our community. A LLC or as a Sole Proprietor? Thank you so much for your help.

Maria

 

Maria,

By default, if you are the only owner of your business, you are a sole proprietor. You could consider adding LLC status to your sole proprietorship business if you want the limited liability protections that LLC status offers.

The reason that most businesses use the LLC structure is for limited liability. That means the liability is limited to your business and its assets and not your personal assets. I organized my own sole proprietorship accounting practice as an LLC  because I wanted limited liability and protection of my personal assets. LLC status can be added to your sole proprietorship business at any time. I ran my accounting business for 3 years and then added LLC status.

I recommend that you read up on LLC status, how to get it, maintain it (there are things you should do like not co-mingle funds and sign contracts in the name of the LLC, etc) , and what is required in your state regarding fees and reports. Some states charge a one-time fee, some charge a yearly fee and annual reports.

 

Since this is a website mainly for homeschool nonprofit organizations, I will add this note: For a nonprofit organization, such as most homeschool groups, I typically do not recommend LLC status since nonprofit corporation status in your state brings similar protections of limited liability. 

Here is a podcast episode where I discuss Should Your Homeschool Group Be An LLC?

 

But Maria is asking about LLC status for her for-profit business, not a nonprofit organization, and my advice to her may be very different from my advice to a nonprofit organization.

 

Carol Topp, CPA

I am not an attorney, nor am I offering legal advice. I recommend that you seek legal counsel if you have additional questions about Limited Liability Company status.

 

Why You Can’t Lead Alone

 

What’s the biggest mistake homeschool leaders make? It’s trying to be a lone wolf and do everything by yourself.

In this short podcast episode (11 minutes)  Carol Topp, the HomeschoolCPA, interviews homeschool leader Sheri Payne from Virginia. Sheri is the Director of Leader Support for HEAV, the Home Education Association of Virginia. She shares advice on many topics including the mistakes she made in leading a homeschool organization.

In this episode of the HomeschoolCPA podcast, Carol Topp and Sheri discuss:

  • Her biggest mistake as a leader: doing everything by herself
  • The importance of getting a team
  • Finding people who are good in areas you lack
  • Peace-making and conflict resolution
  • Training you successor and deliberately mentoring leaders

My favorite quote from Sheri in this episode is “I can’t be a lone wolf because I have deficiencies in my personality.”

Be sure to tune into the other HomeschoolCPA podcast episodes with Sheri Payne including:

In the podcast, Carol mentioned the I Am a Homeschool Group Leader Facebook Group. It is a closed group (meaning you have to request to join) of 570 homeschool leaders from across the USA. You can join us here: https://www.facebook.com/groups/72534255742/

Help your homeschool group get organized and run smoothly!

Author and homeschool advisor, Carol Topp, CPA, has created a Homeschool Organization Board Manual. It is a template to create a board member binder. It has:

  • A list of important documents to keep in your binder
  • Section dividers so you can organize the important papers
  • Tools to help you run your meetings smoothly including
  • A sample agenda that you can use over and over again
  • A calendar of board meetings

But this is more than just a few cover sheets for your binder. It is also a 55-page board training manual with helpful articles on:

  • Suggested Board Meeting Topic List
  • Board Duties
  • Job Descriptions for Board of Directors
  • What Belongs in the Bylaws?
  • Compensation and Benefits for Board Members
  • Best Financial Practices Checklist
  • How to Read and Understand Financial Statements
  • Developing a Child Protection Policy

Read more about the Homeschool Organization Board Manual

Carol Topp, CPA

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Holding a fundraiser to pay for homeschool curriculum

Photo credit TheMagicOnions.com

 

I homeschool my 3 children and 3 children of another family. As a project, we learned how to create a school website and as a idea to raise money for curriculum, supplies and hopefully a field trip or two. We’re in NC and also considered a private school.

We thought of an idea to sell Fairy Gardens that we personally make and accept donations on our website. Am I breaking any laws by not being registered as a business or non profit? 100% of profits will be spent on the school, but it goes to my own PayPal account and I state on the website that receipts for the donation being spent on the school and states that the donations are not tax deductible.

It dawned on me that it might not be allowed to do this without some kind of permit. I’m not sure though because I would be allowed to make fairy gardens and sell at a yard sale, so is it different if I sold them online?

Also, can I be a non-profit since I homeschool the children of two families and not just my own? I would greatly appreciate your feedback on this and thank you so much for all of the knowledgeable information you’ve shared on your site!

Best wishes,

April in North Carolina

 

 

April,
You and the other family are not a nonprofit organization, even if North Carolina classifies your homeschool as a private school. Private school  only means you are not funded with public (i.e. government) funds. It does not make you or your business a nonprofit organization. (BTW, some private schools are for-profit businesses.)

In order to be a tax exempt nonprofit, the IRS says you must be operated and organized as a nonprofit.

A tax exempt nonprofit organization “must not be organized or operated for the benefit of private interests” (Source: https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-section-501c3-organizations).

So benefiting only you and the other family is “private interests” and not serving a public good, therefore you cannot be a nonprofit organization with only two families getting all the benefits.

Your fairy garden business is NOT a nonprofit. It is a business, probably a micro business. Stop calling your sales “donations.” They are simply sales of products (fairy gardens in your case) by a business.

You probably need to register in North Carolina as a business and probably get a vendors license to collect and pay sales tax.
Better start googling “Start a small business in North Carolina.”

 

My books Micro Business for Teens could help your children start this as their business (not yours) and learn a lot too!

 

 

 

 

 

 

Additionally, your comment about selling your products at a yard sale is not quite correct. You can sell fairy gardens at a yard sale, but then you’re running a business and the profit is taxable. In yard sales, you are generally selling household items you bought over many years and used personally and selling them for less than you paid for them. But that’s not true for your fairy gardens. You did not use them personally and you are selling them at a profit, so it’s a business and you should register it and apply for a vendor’s license.

 

Carol Topp, CPA

Leading a Virtual Homeschool Co-op

 

Homeschool families are pretty familiar with homeschool co-ops. It’s a gathering of homeschool families to cooperate together in teaching classes. They usually meet once a week at a location close to the participating families. But have you ever heard of a virtual homeschool co-op?

In today’s podcast Carol Topp interviews homeschool leader Sheri Payne who runs a virtual homeschool co-op that meets online. Participants attend from across the globe!

In this short podcast episode (18 minutes) of the HomeschoolCPA podcast,  Sheri explains:

• How the virtual co-op works
• What technology is used
• How to operate it without cost to the parents
• The advantages of a virtual co-op
• The disadvantages of co-oping online remotely and online

In the podcast Carol mentioned …

Homeschool Co-ops:
How to Start Them, Run Them and not Burn Out

Have you ever thought about starting a homeschool co-op? Are you afraid it will be too much work? Do you think you’ll have to do it all by yourself? Starting a homeschool co-op can be easy! This book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out will give you ideas, inspiration, tips, wisdom and the tools you need to start a homeschool co-op, run it and not burn out!

Carol Topp, CPA

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Hybrid Homeschool Programs: How to Use Them Successfully

 

The Old Schoolhouse magazine published an article I wrote on article I wrote on hybrid homeschool programs

Hybrid homeschool programs are a mix of education done at home and classes outsourced to:

  • online classes
  • a homeschool drop-off program
  • a homeschool tutorial or university-model program
  • classes at a local private or public school or college

In the article I discuss the popularity of hybrid programs and the challenges as well.

Then I conclude with some advice and warnings including:

  • delaying hybrid classes until age junior high or older
  • delaying hybrid programs until you’ve been homeschooling a year or two.
  • a reminder that you can successfully homeschool without using a hybrid program!

I thought long and hard before writing that advice.

I may get some push back on my recommendations, but having seen homeschooling grow and change over the years, I’m trying hard to encourage homeschooling parents to embrace the freedom and joy that comes from educating your children–especially the young ones–yourself!

Don’t let a hybrid program steal that freedom and the joy!

Read the article here: Hybrid Homeschool Programs article

Carol Topp, CPA

Can nonprofit board members be held personally liable?

 

“Can board members be personally liable for what happens in their homeschool group?”

Well…that’s really a legal question and I’m an accountant, not a lawyer, but here’s a recent news story about board members of a nonprofit nursing home. They were held personally liable for failing to do their “fiduciary duties.”

Court Holds Officers and Directors of Non-Profit Healthcare Facility Personally Liable to Creditors for Breach of Fiduciary Duty

The court ruled that the officers, specifically the nonprofit’s administrator and CFO, and board of directors were jointly and severally liable to creditors in the amount of $2.25 million.

What did they do wrong? It’s a long list:

  • breached their respective duties of care
  • did not keep adequate financial records
  • breaches of the duty of loyalty owed to the nonprofit through self-dealing
  • the board failed to remove an incompetent administrator and CFO
  • severely mismanaged the nonprofit, a nursing home
  • the administrator diverted grant funds that were provided by a community foundation
  • The CFO was found to have engaged in self-dealing

The author, attorney Robert Blaisdell concludes by saying,

“This case is significant because it exemplifies the trend of holding officers and directors of non-profit entities personally liable for breach of their fiduciary duty to the corporation.”

Did you get that? “Personally liable for breach of their fiduciary duties.” That means the board members must pay, from their own pocket, damages because they didn’t do their job as board members!

Don’t let this happen to you!

Know your duties as board members and do them.

 

Carol Topp, CPA

HomeschoolCPA.com

Do CC Directors pay for their own children’s tuition?

Karen, a homeschool leader involved in Classical Conversions asked,

Do Classical Conversations (CC) Directors have to write a check (to themselves) for full tuition for each of their kids?

No. A CC Director does not have to pay her own business tuition for her own children. 

Here’s why:

CC Corporate wants a Director to pay their licensing fee based on student enrollment/tuition collected, so a CC Director should track the total tuition collected INCLUDING HER OWN CHILDREN. That way she is paying CC Corporate the correct amount.

But for tax purposes, a CC Director DOES NOT write her business a check for her own children’s tuition and does not include her child’s tuition in the income reported on her tax return (I’m assuming the Director is operating her business as a sole proprietorship and is not an employee of her own business).

The reason is that a person should not be taxed when they avoid paying for services by providing the services to themselves. It’s called imputed income. There was a court case in 1928 that ruled that the imputed income from produce grown and eaten by a farm owner is not taxable as income to the farmer.[9]

Conclusion: A Director must keep track of the tuition she would owe for her children so that she pays CC Corporate the correct licensing fees, but she does not need to write a tuition check to her business and she should not report her child’s tuition as taxable income on her business tax return.

Carol Topp, CPA

HomeschoolCPA.com

My book Taxes for Licensed Classical Conversations Directors is available through Classical Conversations. Find it  in the Directors Licensing Guide  page 54, Appendix M and click on “this document.”

Top 5 risks to churches (and maybe your homeschool group as well)

From the Managing Your Church webpage, I learned the Top 5 Reasons Churches are Taken to Court.

Maybe they are a risk to your homeschool group as well.

In 2017, the top five reasons were

(1) sexual abuse of a child,

(2) property disputes,

(3) personal injuries,

(4) zoning disputes, and

(5) insurance disputes.

 

The article goes on to say:

Churches must be aggressive (in preventing child abuse). Any reasonable suspicion of child abuse must be reported immediately. It doesn’t matter if you or your colleagues are defined as a mandatory reporter in your state or not. Report it. Transfer the risk to the state in terms of what can be done about it.

I think that advice applies to homeschool groups, as well.

Please, please protect the children in your program and get training on how to spot and deal with child abuse.

The article lists the following resources (check with your church host; they may already have some of these resources):

Reducing the Risk, a comprehensive child abuse prevention training program (available in DVD format or online streaming)

50-State Child Abuse Reporting Laws Survey for Clergy and Church Leaders (available as a PDF download or for ChurchLawAndTax.com subscribers)

Church Board Guide to a Child Sexual Abuse Prevention Policy

Child Sexual Abuse Response Plan

Draw the Line: Relational Boundaries for Safe Youth Ministry

Let’s work hard to keep children safe.

Carol Topp, CPA

HomeschoolCPA.com

Can CC Director offered reduced tuition to her tutors?

 

Can a Classical Conversations director gift an Independent Contractor or employee with free or reduced tuition?

Suzy

 

Suzy,
A Classical Conversations (CC) Director can give educational benefits (i.e., discounts on tuition) to Independent Contractors (IC) or employees, but (and this is a big, “but”) the value of these educational benefits is taxable income and must be reported on their W-2 or 1099-MISC.

So a CC director can offer a tuition discount to an IC or employee, but must add the value of that discount to the tax reports she gives to her tutors (1099-MISC or W-2).

And the worker must report her paid wages and the value of this discount/gift on her tax return as taxable income. You should warn her about that in writing and face-to-face, so they aren’t surprised at tax time!

We think that taxable income is only what comes in a paycheck, but the IRS defines taxable compensation to include “educational benefits.”

compensation includes salary or wages, deferred compensation, retirement benefits…, fringe benefits (personal vehicle, meals, lodging, personal and family educational benefits, low interest loans, payment of personal travel, entertainment, or other expenses, athletic or country club membership, and personal use of your property), and bonuses.[i]  (my emphasis added)

[i] Instructions for Form 1023 https://www.irs.gov/instructions/i1023/ch02.html#d0e1909

So, yes, a CC Director can offer free or reduced fees to an Independent Contractor or employee, but it is not a gift; it is taxable income and must be included in their wage and income reporting.

A CC Director should also check her license agreement with Classical Conversations to see if reduced fees are allowed.

If you have additional tax questions about being a CC Director, I wrote an ebook that can help!
Taxes for Licensed CC Directors is available from Classical Conversation. Find it here
Carol Topp, CPA
HomeschoolCPA.com