Should my homeschool nonprofit corporation have members?

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Carol,

I’m filling out the paperwork for my homeschool co-op to be a nonprofit corporation in my state. They ask “Does your organization have members?” We have families that pay for co-op classes and we call them members. Is this what the form is asking?

Joann in IN

Joann,

The state is asking about members of your corporation, not what you call members who participate in your homeschool co-op classes.

Here’s a helpful explanation from Nolo.com

Although a nonprofit corporation can choose to have members who have voting rights, many nonprofit corporations decide not to adopt a membership structure and, in the interests of efficiency, leave the decision making up to the directors. If a nonprofit does opt for a membership structure, the members participate in major corporate decisions. Specifically, the members have the exclusive right to elect directors, amend articles and bylaws, and vote on a merger or dissolution of the corporation.

I have found that most homeschool co-ops are run by a board and do not have members participate in decision making or vote on anything.

One homeschool group incorrectly checked the box on their nonprofit corporation application stating they had members. Later, they needed to amend their Articles of Incorporation  when applying for 501c3 tax exempt status with the IRS. This meant they had to gather the members together for a vote to amend the Articles. This was not easy because co-op classes had ended for the summer and the members no longer gathered together. It also involved explaining complicated IRS language to a group of people who didn’t really care, gathering ballots for votes, etc.

So be careful about what you are agreeing to when you check the box stating your nonprofit homeschool corporation has members.

Carol Topp, CPA

 

Comments

  1. George Ferenzi says:

    Do you have a sample 1023 filled in on your website?

  2. Carol Topp says:

    George,
    No I do not have a sample Form 1023 on my website because it is a form that is unique to each organization, sort of like a Form 1040 tax return is unique to each taxpayer.
    You can view Form 1023s (they are public documents) at Guidestar.org or request a copy from a local charity. By law, a 501c3 organization must provide you a copy of their Form 1023, although they are allowed to charge a reasonable printing fee and allowed a reasonable time to provide the copy.

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