Is insurance needed for small homeschool groups?

Do small homeschool groups need insurance?

Often they do, especially of their host/landlord requires general liability insurance.

To help you discern your risk and need for insurance, Harvey Mechanic, an attorney that specializes in nonprofit law, lists some potential claim areas:

POTENTIAL CLAIM AREAS:

1. Discrimination (Age, Race, Sex)
2. Wrongful dismissal of employee
3. Mismanagement
4. Financial failure/bankruptcy
5. Poor administration resulting in losses
6. Causing the organization to incur unnecessary tax liability
7. Imprudent investments
8. Misuse of contributions
9. Conflict of interest
10. Unauthorized loans
11. Failure to obtain competitive bids
12. Unwarranted expansion
13. Failure to obtain government funding or lower interest loans
14. Misuse of government funds or grants

How many of these situations could occur in your homeschool organization? Probably some, but not all. Large nonprofits like the Red Cross or a hospital face many of these potential risks and need insurance.

In my article, “Insurance for Homeschool Groups,”  discuss the various types in insurance a homeschool group might need and how to lessen your risks to obtain a reasonably priced insurance policy.

Insurance for homeschool groups

Carol Topp, CPA

Should a co-op be a separate organization?

Carol,

We have one entity (group) that works outside of our association, this is our checkbook2Co-op group. This group does take in money – I believe it’s run out of a separate bank account. I know our Co-op group has a board, and bylaws but not an EIN number, which I know is very easy to get. What are they benefits of us staying as one group? My question is: should our Co-op group run their funds separately like this?

Sandy in TX

Sandy,

Your co-op could be organized as under your association or as a separate group. It’s really up to you. Since they have their own separate board and bylaws, perhaps they are really operating as a separate unincorporated association already. You could be officially separate if they obtain their own Employer Identification Number (EIN) from the IRS.

There might be advantages to staying as one group. There are fewer volunteers for the board positions, consolidated financial reports, and shared workload. The co-op could remain a part of your organization, but with a separate checking account and its own budget. It could be self-sustaining financially, but still part of your association. Many church-run schools operate like this, financially self-sufficient, but still under the umbrella of the church.

Carol Topp, CPA

Finding a CPA for your nonprofit

I wrote this article for Step by Step Fund Raising titled

A Good CPA is Hard to Find

by Carol Topp, CPA

Your nonprofit needs professional accounting help, but a good CPA can be hard to find. You desire someone who is knowledgeable but understandable, experienced but still affordable, and professional yet interested in your mission.

How to find a CPA to help your nonprofit:

  • Tell your staff, members and volunteers of your need and request that they ask friends and neighbors for referrals.
  • Mention your search for a CPA in your newsletter.
  • Look over your member or donor list for CPAs and  call to see if they are qualified and interested.
  • Join an on line professional network like LinedIn.com, join some groups and post your need.
  • Call your state CPA society for referrals. WebCPA.com lists state CPA societies at.
  • Ask other local nonprofits for their CPA’s contact information.
  • Use an on line matching service such as Accountants for the Public Interest that matches volunteer CPAs to nonprofits at.

Finding a qualified CPA is the just the beginning. You also desire a good working relationship that benefits your nonprofit more than it costs.

When you work with an accountant:

  • Be specific about the task
  • Ask for an estimate of their fee
  • Request an engagement letter that will spell out the specific tasks and estimated cost
  • Inquire if the charges can be reduced.  Some CPAs will offer a discount if you can delay work until after tax season.
  • Discuss how much of the work your staff or volunteers can do to help reduce fees.
  • Ask for lower cost alternatives. For example, a review of your financial statements may suffice instead of a full audit which is much more costly and time consuming.
  • Be prepared to ask questions, read and learn on your own

Seek out an accountant that has the ability advise you about the financial side of your nonprofit. You should feel comfortable with him or her and be free to ask questions. A good accountant is not just a bean counter; they are also a business advisor. They should explain issues and financial statements in a language that is accurate, yet understandable. If you leave a meeting with your accountant feeling confused, you should find another accountant.

Ask a potential CPA these questions:

  • How many nonprofits do you have as clients? Hopefully, the accountant has clients similar in size to your organization. Size is usually measured in staff size, number of clients served or annual revenue.
  • What is your area of specialty? Some CPAs conduct audits while others specialize in preparing the annual IRS Form 990. Select an accountant that matches your needs.
  • With whom will we be working? In medium and large accounting firms there are several layers of management.  The person doing the original interview may not the one doing the work.  Alternatively, in a small or solo firm you will probably work with only one individual.
  • May I see your biography or Curriculum Vitae  (CV)? Look for participation on church or community boards, published articles and professional memberships.
  • Can you explain to me the reporting requirements for my nonprofit? This type of question is really a test to see how well the CPA explains IRS guidelines.  Is their explanation understandable to you or do they lapse into accounting jargon?
  • Do you charge by the project or by the hour?
  • Am I free after this engagement to call you with questions?  Will I be billed for the phone call?

After their first audit, a small, but growing, nonprofit asked their CPA, “ How do we compare to other nonprofits? What can we be doing better?”  The CPA was unable to answer their questions.  He was good at number crunching, but he could not see the bigger picture and seemed unable to offer advice. The director was quite disappointed. They used the techniques mentioned here and found a qualified, helpful CPA with a reputable firm that guided them through many successful years of expansion.

Carol Topp, CPA //

Have we hit the $5,000 mark?

I am trying to do some research on the non-profit status for our Homeschool group and cannot find a clear answer. We are trying to see if we have hit the $5000 gross receipts limit.

Would money that individual members write to the group, so that the group can write one check to an organization, for instance a field trip, be considered in the gross receipts?

Nikki E

Nikki,
All money that comes in, even if it goes out almost right away like for a field trip, is considered gross income.

Not difficult to get over that $5,000 limit, is it?

To help in your research you might want to read my The IRS and Your Homeschool Organization

 

Best of success to you,

Carol Topp, CPA

Carnival of Homeschooling

Welcome to the Carnival of Homeschooling!   Our theme this week is:

As Time Goes By: Reflecting on 25 Years of Marriage and 12 Years of HomeschoolingIMG_4033

In 2009 my family celebrates two milestones, our oldest daughter graduates from homeschool high school and my husband and I are celebrating 25 years of marriage (today!), so I’m reflecting on the passage of time.

Before you begin

IMG_4720 - CopyThis is Dave and I before we were married, setting the stage for marriage with a period of engagement. Like engaged couples, parents just starting to homeschool can be excited and fearful at the same time.

Teri’s Take asks Will you begin homeschooling this fall?

Praiseworthy Things asks parents to consider the important question, What About Preschool?

Percival Blakeney Academy compares Home Schooling VS Home Cooking

Why Homeschool has a video of John Taylor Gatto talking about the purpose of Public Schools brainwashing and preparing for factories.

Starting to homeschool

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Our family went from just the two of us to four when we added two daughters. We had a lot to learn as parents and many parents learn a lot as they begin homeschooling. I am so grateful for the parents and experienced homeschoolers that shared their wisdom with us.

Wired For Noise shares a review of a book set that is great for beginner readers in Reading Together

The Frugal Homeschooling Mom adds reason number 8 in Why Homeschool? Eight Reasons (and more to come)

Terri Sue Bettis presents Homeschooling an Only posted at Cricket’s Corner.

explore-discover-learn asks Why do Kids Bully? and offers  Bully and Cyberbully Printables

Terry presents Art Supplies Can Spark a Child’s Creativity posted at My Creativity Blog.

Growing and learning

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This is one of my favorite pictures from early in our homeschool journey.  My daughter is about seven and is pretty happy to show us her spelling book! Notice little sister peeking out from behind her shoulder. Our daughters kept growing and learning as these homeschool bloggers also continue to do:

Purls of Wisdoms blogs about learning styles in Homeschooling Styles

Whippasnappa’s Blog notices the changes in her children because of homeschooling in Thoughts on Homeschooling

C h r y s a l i s tells us that stargazers across the world are in for a major event next month. Scientists say that on July 22, a total solar eclipse will be visible from India, China, and parts of the South Pacific in The Eclipse Will Look Like a Diamond Ring

Barbara Frank Online asks Is your young teen sleeping through the summer? in The Young Teen in Your House

A Mountain Mom shares The process of being organized.

ChristineMM presents Homeschool Stuff Reorg Before & After posted at The Thinking Mother.

Freehold2 discusses an important topic in Copyright and Homeschoolers

Kathy presents Airborn: Homeschool Review posted at Homeschoolbuzz.com Reviews.

Jen presents My Homeschool Recipe posted at Cage Free Monkeys.

Jimmie presents Living Math Curriculum Review posted at The Curriculum Choice.

Travel and field trips

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My husband used to say that the money we saved by homeschooling meant we could take really big field trips and here’s a picture from one of our biggest “field trips” ever-to China in 2003. We all learned so much and see the world differently as a result of traveling. Here some homeschool families share their travels near and far.

Summers’ Family Adventures enjoys Cleveland’s Metroparks in Rocky River Nature Center

Kimberly from Life of a Homeschool Family visits a local museum in Macon Museum of Arts & Sciences

Home Spun Juggling shares photos from her recent trip to the aquarium in Sharks, Jellies, and Penguins, Oh My!

Amy from Neighborhood Clubhouse explains How Homeschooling Families Can Find Free Travel Accommodations

Dave from Home School Dad explains a service project his family did in Oh Where is My Hairnet?

Susan presents Riding the Escalator posted at The Expanding Life.

Continued commitment

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My daughters have continued to be committed to homeschooling all the way through high school. This picture shows their books from one year of high school!  They really felt a sense of accomplishment when they saw their book towers!  The following posts will encourage you to continue in your commitment to homeschool.

Aimless Conversation discusses the importance of setting goals in Homeschooling With a Purpose

Loving Learning at Home reflects on her homeschool life in Assessment Time; Reflection Time

Homeschooler Cafe’ encourages other homeschool parents in Just Hang In There!

See what the Weird, Unsocialized Homeschoolers will be using next school year in Our 2009-2010 Curriculum

Kiwi Polemicist is concerned about homeschooling freedoms in Sweden in Update: Sweden wants to outlaw homeschooling done for religious and philosophical reasons

Take Dana’s poll How Involved are Dads in Homeschooling? at Principled Discovery

Beverly’s Homeschooling Blog shares Pfc. Bowe R. Bergdahl was homeschooled. Pfc Bergdahl is a soldier being held captive in Afghanistan

Milestones and celebration

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Here is my daughter, Emily, on her graduation from homeschool high school. Quite a milestone in her life that we’re happy to celebrate! Of course milestones mark an event, usually an ending, but in Emily’s case this milestone is a beginning as well as she heads off to Grove City College in PA this fall.

Homemaking 911 celebrates a milestone in Christina is Graduating This Month

Amanda presents I Think I Can, I Think I Can, Wait? Yep, I Know I Can! posted at The Daily Planet.

From my other blog I share Homeschool High School Graduation and Sending Your Kids to College.

Wrap up

Thank you to all the bloggers that shared their posts! I hope you have enjoyed this reflection on our family life and marriage. No matter where you are on your path, remember that the joy is in the journey!

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This final picture is Dave and I at a family celebration of our 25th wedding anniversary. We haven’t changed a bit, right?  Wrong! Of course our past 25 have years have changed us for the better, I hope.  Homeschooling our daughters has been a rewarding, fulfilling experience.

The next Carnival of Homeschooling will be at Small World. Submit your blog article to the next edition of carnival of homeschooling using the carnival submission form. Past posts and future hosts can be found on our blog carnival index page.  The deadline is Monday July 27 at 6 pm PST.

Carol Topp

Planning a Homeschool Co-op

Faye, a homeschool mom and columnist for the DC Examiner.com, has a great list to help start a homeschool co-op (edited slightly for brevity):

Although it is wonderful to be able to plan lessons, activities and programs that best meet your child’s needs, sometimes banding together with other homeschoolers can be a huge blessing!  Planning a homeschool co-op is a large undertaking, but with some good people and a strong foundation, it can benefit you and your family in many ways. Whether you want to have a group for regular field trips, or you are looking for a way to provide some structured school time in a group setting, a homeschool co-op could be just the ticket.

If you are interested in starting your own homeschool co-op, I would like to offer some suggestions.

1.  Start with your homeschool support group and friends.  Who would be willing to help you get things started?  2-5 people is a good number for a planning group (more than that and it might seem impossible to find a time when everyone can meet!).

2.  Spend some time brainstorming about what the “ideal co-op” would be.  Would you meet once a week, or every morning?  Will the group be for just a certain age group (ie: only elementary-age)?   Do you want to offer set classes, with textbooks, tests, homework, etc?  Or perhaps something more relaxed, like clubs and projects?

3.  Once the group has ironed out a general idea of what the first year could look like, you will need to find a place to meet.  This may prove to be one of the most daunting tasks!  Try the local library or community center, a church or firehouse, or maybe even an empty business.

4.  After you have secured a space, it is time to invite homeschooling families to join you!  It can be tempting to hang up flyers and spread the word via homeschool yahoo groups and blogs.  However, a word of caution.  I have heard many, many stories about co-ops, and the one thing that resonates over and over again is the importance of having a group of like-minded people.  Now, that doesn’t mean that you all have to believe in the same things–far from it!  At our co-op, we enjoy having new points of view for the kids to consider.  However, if it is important that the co-op be Christian-based, that might not be a good match for someone who is agnostic.

5.  For your co-op to grow and thrive, people have to be willing to work together, to pitch in, and to get along.  It is an “army of volunteers”, and if the adults/kids don’t get along, the co-op will suffer and perhaps never get off the ground.

6.  Once you have a location and a few families have indicated interest–YEAH–you are in business!!  Meet with your planning group and decide what classes/clubs/projects you want to offer.  Some ideas to choose from:

  • Art/drawing
  • Science
  • History
  • Foreign language
  • Physical education

7.  Finalize which classes you will offer, decide on a start date, then work out registration details and fees.  If there is a fee to use your facility, all families will need to divide that expense. Many facilities will also want you to carry a separate insurance policy (for one local co-op, it is @$35.00/family/year.)

8.  Do an Internet search to find forms you may need/want to have (registration, emergency info, family info, student info, etc.)  The planning group can share these tasks so no one person feels burdened.

9.  Plan a park day for families to meet, get everyone registered, order your materials, and you’re on your way!

10.  You might also consider getting a website set-up exclusively for your co-op.  Homeschool-Life.com offers a low/no-cost website service for homeschoolers, and it allows you to have group registration, to use message boards, to provide event reminders, etc.

11.  Be sure that everyone who chooses to participate is willing to help with some aspect of the group, whether it is teaching a class, cleaning up, watching the little ones, or helping as needed.  “Many hands make work light” is certainly a true statement when it comes to a homeschool co-op!

12.  Resist the urge to “do everything” in your first year.  It will be tempting to do this, believe me!  Try to offer just a few things to the group (no more than four).  See how that works out, ask for feedback, and your group can grow from there.

It is a tremendous amount of work to get a co-op up and running, but the rewards cannot be overstated.  As the group grows and expands, your kids will have incredible opportunities for learning, friendships, and fun!  If you have experiences with, or suggestions for a homeschool co-op, please share them in the “comments” section below.  I am sure there are many good ideas right here in our own community!

 

Faye might be right that it is work to start a homeschool co-op, but there is help.  My book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out will walk you through the start up and  running your group.

Also my website www.HomeschoolCPA.com has many helpful articles on starting a group, getting a checking account and buying insurance.

You can do it! Just get some help from those who have gone before you!

Carol Topp, CPA

Pictures from Virginia Homeschool Convention

I was excited to be invited as a speaker to the Home Educators Association of Virginia (HEAV) 2009 convention. I spoke on leading a homeschool group, having a family budget, micro business for teenagers, 501c3 tax exempt status and being a WAHM (Work at Home Mom).  I also talked to dozens of homeschool leaders, parents and teenagers that stopped by my booth.

My booth to meet and greet homeschool leaders from Virginia, Maryland, West Virginia and surrounding states.

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My booth helper, friend, co-op member and fellow WAHM (Work at Home Mom), Katy Daum (tall one on the left) and me in front of our booth.

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At the Leaders lunch with Exhibit Hall Coordinator, Tammy Bear (left), an extraordinary, organized, lovely lady!

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I met my virtual friend, Janice Campbell (right) of Everyday Education, in person. She had a lovely booth.

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The Exhibit Hall at HEAV. I was also pleased that Paul Suarez from The Old Schoolhouse (the next aisle over) stopped by my booth.

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What a great weekend.  I enjoyed meeting so many homeschool parents, teenagers and leaders.

Carol Topp, CPA

Carnival of Homeschooling

The latest Carnival of Homeschooling is up at Principled Discovery.  She has chosen a field guide  to homeschoolers as her theme “to attempt to describe this fascinating specimen of educational freedom and gain a greater understanding of its habits, habitat and daily life.”  Very clever and lots of good posts on homeschooling.

My post on insurance for homeschool groups is there.

Carol Topp, CPA

Milestone: Graduation Day for my first born!

Today, my first born , Emily, will graduate from high school.  this is quite a milestone in her life and mine.  12 years of homeschooling! It’s been a privilege and an honor.  I’ve lea093rned so much by homeschooling her, and of course she has learned a lot, too!

I won’t say it’s been pure joy, bit it comes close. 3rd grade was pretty rough with lots of phone calls to the “principal” (my husband at work) about her stubbornness.  Put two type A, opinionated people together and you’ll have some conflict.  But in the end we are so much closer for working it out instead of giving up. High school has been great. It is fun and exciting to see her grow and develop.

Congratulations Emily! Your dad and I are very proud of you.

Carol Topp, CPA

Three kinds of insurance for homeschool groups

030429_1897_5028_xsmsCarol,

We were told by our host church that we’ll need our own insurance policy.  Can you look into that for us?

Beth S, Ohio

(I am a volunteer parent in this homeschool organization)

This homeschool group had been told by the pastor of the church where they would start some homeschool classes twice a week that they their own insurance policy.

So they need their own insurance.  But what kind? In talking to a helpful insurance agent, I learned there are at least three types of insurance a homeschool group could possibly need:

General Liability (sometimes called fire insurance).  It covers the property an organization owns or rents.  This is what the church is wanting from our group in question.  They want an insurance policy if our group damages their property.  Someone suggested that we ask the church to add our group as a rider.  It might be cheaper.  Or, it was suggested, we should get “event” coverage. It might be cheaper since we don’t meet every day in the church.

Accidental Medical coverage.  This is for coverage if a child hurts him or herself while at our homeschool function.  Since we don’t have gym classes or physical activities I think my group will skip this type of insurance.  We’ll probably get the parents to acknowledge that they will cover their children’s medical expenses.

Director and Officer insurance: This is to protect the leaders from being personally sued for liability.  The agent said these policies start at $1,000/year.  Yikes!  He said it is because it includes provisions for employee s*xual harassment, etc.. Because of the expense to the organization, some non-profits board members carry their own liability insurance.  Personal liability insurance, sometimes called an umbrella policy, can be purchased separately.  Our group doesn’t have employees (or a very large budget) and so I think that we’ll forgo the D&O insurance, also.

Carol Topp, CPA