Board members who won’t do anything

 

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I hear from a lot of homeschool leaders that they have board members who don’t do much. How frustrating.

Here’s some advice:

Do something. The problem is likely to get worse and a board member who is not participating can demoralize the entire board.

But stay hopeful. Many board members need a reminder to be more conscientious. You’re all in this together. Some inactive board members may need to be let go. They may be grateful that you’ve given them a graceful way to reduce their work load or even leave the board.

  • Check to be sure that expectations were made clear to the board member before he or she joined the board. “I know you joined the board recently and I’m not sure that you realize that we ask all board members to attend the annual dinner and, hopefully, to help sell tickets. Let me explain to you what most board members do, so you can see whether you’ll be able to work on this with us.”

Here’s a good list of Requirements of Board members.to get you started.

  • Hold a board discussion at which expectations are reconsidered and reaffirmed. Agree on a list of minimal expectations for every board member, and ask people to suggest how they might individually help as well.
  • Be sensitive to possible health issues or personal reasons why a good board member isn’t participating as much as he or she has in the past.

Remember, homeschool leaders carry a lot or responsibility. Your inactive member may be having health, marriage, or parenting problems that she is not sharing with you. Show grace and compassion and she may be so grateful for your support that she becomes active again.


Sorry, but the rest of this content is available only to my email subscribers! I know that’s a little bit sneaky, but I want my email subscribers to get special content like this list of steps to help an inactive board member.

Subscribe to my email list and get helpful tips for dealing with a board member who won’t do anything as well as special reports, discounts and and helpful resources that I don’t share on my blog or website.

 

 

 

My book, Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out also has helpful advice in picking board members, managing volunteers, and running a successful homeschool organization.

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Carol Topp, CPA

HomeschoolCPA.com

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Co-op collects money to send leader to a homeschool convention

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Hi Carol,
My homeschool group’s Board of Directors recently took up a collection from our members as a way of presenting me with an end-of-year gift of appreciation.  This was a complete surprise to me, especially when they presented me with a check totaling over $700!

The Board collected donations from individual members and then wrote me a check on the group account.  I’m unsure of how to deal with this tax-wise. The gift was given with the intent of paying my expenses for our state’s homeschool convention, including the leadership conference. If I returned the check and used the group’s debit card to pay my hotel expenses, would this alleviate the taxes?

Thank you for taking the time to answer.  I want to make this as easy as possible for group record keeping, and I’m not sure if this is the correct way to go about it.

Blessings,
Barbie T, Florida

Barbie,

I’m glad my website and books have been helpful.  You sound as if you have a great group and I’m sure they appreciate you!

Gift or taxable compensation?

It is sometimes difficult to tell if cash is a gift or a payment for services. The difficulty in determining if payment to a worker is a gift or compensation is that you need to determine the intent of the donor. The IRS has a very difficult time determining intent or expectations. We, on the other hand, can usually determine if a payment is a gift because we know the donor and their expectations.

It sounds as if the co-op was collecting money to defray the expense of sending you to a homeschool convention. It is taxable income to you with expectation that you will “earn” it by going to the convention (and learning a lot!).

If you use the payment on co-op related expenses (like the convention), then you could claim those expenses on your tax return. At the end of the year you  should report the $700 as income on your tax return and and then report expenses like the convention fee, mileage and hotel costs as deductions. You may break even or show a small profit.

A better way

In retrospect, it would have been better if the board had collected the monies and then gave you a nice note saying that you won an all expenses paid trip to the convention and used the co-op’s debit card to pay the expenses. These expenses would not be considered taxable income to you since the money never came to you. And the convention is to develop your leadership skills, not for your personal pleasure (although you may enjoy it!).

Carol Topp, CPA

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Paying Workers in a Homeschool Organization-2nd edition

$9.95 paperback
130 pages
Copyright 2017
ISBN 978-0-9909579-3-5

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Embezzlement: Could It Happen in Your Homeschool Group?

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From the Ohio Society of CPAs comes this warning:

Small nonprofits ripe for embezzlement

They’re often diligent, caring workers, and yet tempted by seemingly easy cash.

Working on the inside, thieves can hit school groups, athletic leagues and churches, especially when they’re surrounded by trusting colleagues and loose security.

And according to one expert, because of the disgrace and embarrassment that the crime brings an organization, their transgressions often are not reported.

The median loss to fraud for religious, charitable and social-service organizations was $106,000 last year, according to an annual survey by the Association of Certified Fraud Examiners. “We estimate that organizations lose about 7% of their net worth to fraud each year,” said Scott Patterson, the association’s spokesman.

“There are so many people doing the good work that nobody steps back to say, ‘Should we begin looking at ourselves. We’ve grown. We better put some checks and balances in,'” said Gary Zeune, a fraud expert whose speakers bureau, “The Pros and Cons,” travels the country. “The only people who can steal you blind are those you trust and who don’t have controls.”

Smaller organizations, such as school parent-teacher organizations, are often vulnerable because neighbors and friends are reluctant to offend by suggesting that dishonesty is possible.

“This is typically mothers stealing from their own kids,” Shaw said. “The kids are the shills out there selling cookie dough or doing the walk-a-thon, and the mothers are stealing it.

“If the board is too embarrassed to have checks or balances, they need to have a new board,” she added. “But if you’re an honest person, you shouldn’t be insulted by having a second set of eyes.”

I’m sad to hear about embezzlement taking place in a homeschool groups, but I know from homeschool leaders that it can and does happen!

How can you prevent embezzlement?

1. Sign up for my newsletter (upper right corner of the website) and receive my report “Best Financial Practices for Homeschool Groups.” If you already belong to my mailing list and still want the report contact me and I’ll send you a copy.

Cover Money Mgmt HS Org2. Buy Money Management in a Homeschool Organization and read Chapter 9: Fraud: It Couldn’t Happen to Us. I outline some guidelines for groups to avoid embezzlement such as:

  • Have a separate checking account in the organization’s name
  • Appoint a treasurer
  • Have bank statements mailed to the board chair, not the treasurer
  • Have the board chair, not the treasurer to sign checks
  • Require regular financial reports
  • Prepare a budget

Keeping you safe,

Carol Topp, CPA

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Summer reading for homeschool leaders: Homeschool Co-ops

 

This summer, I’ll be featuring one of my books for homeschool leaders every few weeks (and offering special discounts!). I’m also updating one of my books this summer…can you guess which one?

I’ll start with my first book for homeschool leaders,

I published this book in 2008 with a different cover. In 2013 I updated it and chose a new cover.
HomeschoolCo-opsCover

Original cover

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Updated cover

This book will help homeschool leaders start and run a homeschool co-op.

It has chapters on:

Part One: Starting a Homeschool Co-op
Chapter One: Benefits of Co-ops
Chapter Two: Disadvantages of Co-ops
Chapter Three: Different Types of Co-ops
Chapter Four: Your First Planning Meeting
Chapter Five: What’s in a Name? Names, Missions

Part Two: Running a Homeschool Co-op
Chapter Six: Leadership
Chapter Seven: Co-op Offerings
Chapter Eight: Money Management
Chapter Nine: Managing Volunteers and Conflict
Chapter Ten: Ready for the Next Step? 501c3 Tax Exempt Status

Part Three: Not Burning Out
Chapter Eleven: Avoiding Burn out

Read a sample chapter

Read more about Homeschool Co-ops the book


Here’s a special for the summer. Buy Homeschool Co-ops at 25% off. Get the paperback version for $7.50 (usual price $9.95) or ebook version for $3.99 (usual price is $4.95).


Order Homeschool Co-ops in paperback

Order Homeschool Co-ops in ebook Kindle  or pdf

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Homeschool Leadership is Like Marriage Part 2 (podcast)

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Leading a homeschool organization can be like marriage. It’s helpful to know what you’re getting into!.

Carol Topp shares insights on leadership from Hebrews Chapter 13 with a group of homeschool leaders in this 2nd part of a two-part episode. She shares three warning of attitudes to avoid.

Listen to the podcast.

Listen to Part 1. where Carol warned against trying to meet everyones’ expectations.

For more help in leading a homeschool organization check out Carol’s book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.

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Serving on a nonprofit board: What is required?

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I think we have 3 people willing to be on the board. Their main question is time commitment. I have no idea what to tell them. Do you have any support materials to help leaders judge this?

Jennifer in North Carolina

Jennifer,

Board commitment can vary a lot. Some homeschool organizations need everyone to pitch in on co-op day, but the board may only meet once a month for 1-2 hour long meetings.

The more important issue is that potential board members consider their duties as board members.

Each board member has a fiduciary (i.e. legal) duty to manage the organization and its funds within the purpose/mission of the organization and not for private gain or benefit. The board’s job is to govern the organization, be responsible for the management of funds, and be responsible for its programs.

From Ohio Attorney General Guide for Charity Board Members comes this excellent list of the duties of board members (with my comments and links added).

Duty of Care

  • Read and understand mission, vision, and governing documents. I recommend a board binder for important documents.
  • Attend board and committee meetings.
  • Be informed and prepared to participate in decision-making and oversight.
  • Exercise same care as a prudent person would in the handling of their own affairs.

Duty of Loyalty

  • Be prepared to put organizational objectives above self-interest.
  • Establish and follow written policies concerning conflict of interest situations.
  • Disclose personal financial interests when needed/excuse yourself from voting. See a sample Conflict of Interest policy.
  • Avoid entering into business relationships between board members and the organization.

Duty of Management

  • Develop policies that assure the financial responsibility of the organization. Get my list of best practices when you sign up for HomeschoolCPA’s email list.
  • Keep accurate and complete records of income, expenses, investments, and minutes.
  • Develop budget as a blueprint for program plans and all organizational spending. My book Money Management in a Homeschool Organization can help you create a budget.
  • Develop fundraising goals and assist the organization in acquiring adequate resources.

Duty of Compliance

  • Understand and comply with governing documents, including bylaws and code of conduct. Sample bylaws.
  • Know and comply with state and federal laws governing non-profit organizations, including registration and reporting requirements. If you’re unsure about what your filings requirements are, contact me and we can discuss it. My book, The IRS and Your Homeschool Organization, will also be helpful.

I hope this list of duties doesn’t scare away your potential board members! I have found that serving on a nonprofit board has been one of the most rewarding things I have done.

Carol Topp, CPA

 

Calendar of Board Topics for Homeschool Groups

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This blog post from Nonprofit Law Blog had a great idea: Create a calendar of topics your board should discuss every year.

I modified their ideas a bit for typical homeschool organizations and came up with this list of topics for your board to discuss each month:

  1. Welcome new board members and give them a history of your organization, its purpose, an understanding of their duties and a board binder. Read over the bylaws and review your mission and purpose statement.
  2. Discuss new programs and activities.
  3. Decide on discounts and appreciation gifts for volunteers.
  4. Go over best practices to avoid fraud. Read them here. Implement changes as needed.
  5. Discuss fundraising techniques.
  6. Authorize committees, recruit members and delegate duties to them.
  7. Review your conflict resolution policy. How do you solve conflicts. Read The Peacemaker.
  8. Review your risk areas, safety policies and insurance coverage.
  9. Evaluate any paid workers, independent contractor agreements, and employment practices.
  10. Recruit, nominate and elect new board members.
  11. Set a budget near the end of the year for the next year.
  12. One month after end of fiscal year file IRS form 990/990-EZ or 990-N and any state forms.

As you can see, I have links to articles and blog posts on most of these topics.

And my books,

  • Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out
  • The IRS and Your Homeschool Organization.
  • Money Management in a Homeschool Organization

have many issues for your board to discuss as well.

Carol Topp, CPA

 

 

Is this a gift or compensation to a homeschool leader?

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I just purchased your e-book, Paying Workers in an Homeschool Organization.   It only briefly touched upon the issue I am most interested in, and I am wondering if you have additional resources to answer my question.

Our Steering Committee decided years ago to provide certain gifts and perks to our chairman whom they were in danger of loosing due to her family suffering financially at the time.   The financial hardship has passed, but the gifts and perks remain. Currently, our chairman receives these annual benefits:

  1. $1,000 in gift cards (usually grocery and gas gift cards)
  2. $700 in classes for her children – these are the fees paid directly to the independent contractor teachers
  3. $100 -200 in waived registration fees (These are fees that the co-op charges members.)
  4. $160 in free pizza/drinks/snacks
  5. reimbursements for costumes and drama-related costs for her children (all other members pay for these)
  6. $300-$500 in cash gifts collected from members and given directly to the chairman.

She is the only one to receive gifts and perks out of the co-op budget.

This has been a very difficult conversation at our co-op because our chairman does do an enormous amount of work.

Thank you!

Anne in PA

 

Anne,

When I read the list of “perks” your chairman receives I was shocked! Wow!

Most board members are happy with flowers or a small gift card.

According to the IRS,  an officer who is paid is an employee. That means the gift cards, tuition discounts, and cash she received should have been reported to her on a W-2 and your group was supposed to pay employer taxes (SS/Medicare) on her “wages” and file quarterly tax forms with the IRS!

When you pay independent contractor teachers on her behalf, you are paying her personal expenses. The IRS considers payment of personal expenses as taxable compensation and it needs to be reported on a W-2. See  http://www.irs.gov/pub/irs-tege/eotopici93.pdf

My recommendation is to stop these excessive payments immediately. The IRS calls this “excess benefits” and can impose penalties and a 25% tax on what they deem “excessive.”

Here’s an excellent article on excessive benefits (they consider paying personal expenses for members of an officer’s family to be “excessive.”)
http://www.nolo.com/legal-encyclopedia/reporting-excess-benefit-transactions-the-irs.html

Here’s what they recommend:

If your nonprofit discovers an excess benefit transaction with a DP (disqualified person; i.e. , an insider or leader), it should make good faith efforts to correct it. To do this, you must have the disqualified person repay or return the excess benefit, plus interest, and then adopt measures to make sure the same situation doesn’t occur again. The IRS will take into account these efforts in deciding what penalties to impose and especially whether to revoke the nonprofit’s tax exemption. (emphasis added)

You can, of course, start paying her a salary that she will report as taxable income to the IRS. My new book Paying Workers in a Homeschool Organization can help with that!

Carol Topp, CPA


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Paying Workers in a Homeschool Organization-2nd edition

$9.95 paperback
130 pages
Copyright 2017
ISBN 978-0-9909579-3-5

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Facebook party for homeschool leaders!

I’m looking forward to joining homeschool leaders in Williamsburg, VA for the Home Educators Association of Virginia Leadership Conference March 13-14, 2015.

But first I get to meet these leaders online at a Facebook Party!

What: Facebook Party for Virginia homeschool leaders

Who:  The sponsor is Home Educator Association of Virginia

When: Tuesday, January 27, 2015 at 8-9 p.m. ET

Where: https://www.facebook.com/groups/HEAVLeaderSupport/

At the Facebook Party I will share about the topics I will discuss at the Leadership Conference

Homeschool Leadership is Like Marriage—Know What You’re Getting Into!

Who’s Afraid of the Big, Bad IRS? How the IRS Sees Homeschool Organizations

Top(p) Ten Tips for Running a Homeschool Organization

There will also be time for questions from leaders.

See you on Facebook and maybe in Williamsburg, too!

Carol Topp, CPA

Experienced Homeschoolers Offer Advice (podcast)

Carol Topp recently interviewed experienced homeschoolers at the HSLDA National Homeschool Leaders Conference. Listen to Carol’s lastest podcast as the leaders discussed:

  • Why they became a homeschool leader
  • What they wish they had known
  • What advice they have to offer you

Listen to the podcast

(I apologize for some of the poor audio! I’m improving, but I’m still learning about recording with lively background noise)

 

If you find this podcast helpful, please share it (below!) and leave a review on iTunes. (click on “View in iTunes” to leave a review)

How to leave a review on iTunes

Thank you!

Carol Topp, CPA