How start up homeschool groups pay people from the very beginning?

I think I have a better understanding about the logistics of starting a homeschool group after reading your books and watching your webinars, but where I am getting stuck is the development of a board.  It is just me and another homeschool mom who are the founders of our homeschool enrichment program, but we would like to be compensated for the work we are doing to run the group. From what I understand, we would need a board to hire us as employees in order to be compensated.

How do start up homeschool groups find board members that are outside family and friends? We just don’t have a pool of people to draw from at this point. I am sure once we are established and have families enrolled, we can get board members from our program participants. 

Any advice or guidance on how start up groups go about this at the very beginning?
Thank you!
-Nicole

Good question: “How do start up homeschool groups find board members that are outside family and friends?” That’s easy: From the participating families, as you already know. 🙂

The harder question is: “How start up groups go about this (paying two people) at the very beginning?”

Paying workers in the early years

Usually start up nonprofits don’t pay employees from the beginning (unless they get a large grant or donation, which is rare for homeschool groups). It typically takes 2-3 years before they can afford to pay part time staff. Most homeschool groups NEVER pay anyone. Everyone is a volunteer.

When I started consulting with homeschool groups 20 years ago(!), no one ever asked about getting paid. They simply formed all-volunteer organizations and everyone pitched in. Now I get questions like yours quite frequently.

So you won’t like my advice, but I would say if you are going into this as a way to get a salary, you need to be patient. It will probably be at least 2-3 years before the group will be large enough to hire and pay staff.

Becky Abrams of HomeschoolLeaders.com is the paid Executive Director(ED) of Arrows Christian Academy in Oregon. But she served as a volunteer ED for several years at the start. And even now, she is making only a small income that is compliant with her state’s minimum wage.

Finding Board Members

As for finding the initial board members (before you enroll students), have a few “informational meetings.” Announce that you need help and see if anyone shows interest. My co-op started that way. I remember going to the house of another homeschool mom where about 12 women came to learn about a new homeschool co-op being launched. It was clear from the start that anyone wanting to participate would also be volunteering in some capacity. And from that evening meeting, a board of 5 people became the initial leaders.

Start slow and steady. Don’t get ahead of yourself.

Grow slowly and work out the kinks with a smaller group.

Get everyone to pitch in so there is less burden on you and your co-founder.


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! Written specifically for homeschool groups.

Paying Workers in a Homeschool Organization covers paying workers as employees or independent contractors. There are also chapters on paying volunteers and board members. It includes sample forms, tips and advice to help you pay workers in accordance with the IRS laws to help your organization pay their workers correctly. Written specifically for homeschool organizations.


Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders

Microschool

Is your program a micro school or a homeschool group? It can be hard to tell the difference! This page of resources and links may be helpful to you.

Can my micro school be a homeschool group (and avoid some headaches)?

Here is the handout and slides from a 30 minute presentation titled Can my micro school be a homeschool group? I (Carol Topp, CPA) did for the Meridian Learning Micro School Mini Conference in 2021.

Slides
Handout

Podcast episodes about micro schools

Pandemic Podschooling:Is it Homeschooling? epidsode 195

What’s the Difference between Pod schools and Homeschools? Episode 196

Blog posts about micro schools

Classical Conversations knowingly exposes churches to tax liabilities

(Photo Courtesy of JJ Veale

Classical Conversations, Inc. (TM), Inc. has been the subject of two investigative reports written by Josh Shepherd in 2021.

I was interviewed by Josh and quoted in the first article Whistleblowers Say Classical Conversations is Multi-Level Marketing Scheme that Exploits Homeschooling Parents.

I shared some background information in my blog post Does Classical Conversations Exploit Homeschooling Parents?

The second article titled “Classical Conversations Knowingly Exposes Unsuspecting Churches to Tax Liabilities, Sources Say” was released last week.

It reveals that in addition to exploiting homeschool parents, Classical Conversations knowingly and deliberately has been exposing churches to property tax liabilities.

Background


I first became aware of the problems with Classical Conversations “communities” (they are really businesses owned by a licensed CC Director) in 2017 when a CC Director in Illinois emailed me. She was having difficulty finding a church to host her CC business (what she called “a community”).

I replied to her question and explained the churches were concerned about their property tax exemption.
I thought Illinois was a particularly stringent state and did not think this was a wide spread problem. I was wrong. Very wrong!


Then in 2018 I heard from a CC Director in WA State having the same problem.

I started to realize that CC meeting in churches could be a problem in many states!

After hours of research, calling tax assessors and helping scores of CC Directors, Jamie Buckland of Classical Homeschool Consultant has determined that 47 states have restrictions on for-profit businesses using tax exempt property of churches. Only KY, TX and OK seem to not care much about for-profit use of a property-tax-exempt church building.

In April 2019, a pastor emailed me and explained he has received an anonymous letter with links to my website. This was the first time I’d heard of this letter.

I gave him a lengthy reply.

Then it all exploded!

Letters to churches expose the truth

Robert Bortins CEO of Classical Conversations, Inc. hosted a webinar for CC directors to discuss their opinion on CC “Communities” meeting in churches. The webinar was transcribed by one of the attendees and sent to me.

We also found out that the letter originated in Cincinnati, Ohio, …
Um, one of the accountants that they linked to in their letter lives in that state as well and so we followed up with that CPA to find out if we could discuss this matter with them, you know, as Christians are called to do and also offered to let her speak with our legal counsel so that she could gain a more full view of the matter that was referenced in the letter and that was referenced on her website. Unfortunately, she declined such an invitation. And so of course, that was sad to hear because we wanted to make sure she was well-informed of the laws as well.

Robert Bortins, transcript of “Q and A with Robert Bortins” webinar April 17, 2019

He implied I had sent the letters.

I didn’t. Why would I? I had already posted two blog posts that the letter referenced years earlier.

Robert Bortins came very close to committing slander against me during that webinar. I believe Robert Bortins did commit slander and libel against me in private conversations and tried to ruin my reputation and my business based on social media posts shared with me.

slander: the action or crime of making a false spoken statement damaging to a person’s reputation; make false and damaging statements about someone.


I did not send the letters. I do not know who sent the letters. I had no involvement in these letters sent to churches.

Nasty emails came my way like this one:

Because of you, my community has no place to meet. We are moms sacrificing a lot to live off of single incomes to stay home full time with our kids. I hope the money was worth it to you because obviously you don’t care about the people you’re speaking to. Such a stereotypical accountant. Actually, much nastier than any accountant I’ve met. 

Noelle, an angry CC mother

I visited an attorney and she advised me to reply individually to emails which is what I did. She also reminded me that I did not need to speak to CC’s legal counsel to “gain a more full view of the matter” or “be informed on the laws” by CC, Inc. or their legal team. If I need legal counsel, she would provide it to me or recommend another legal expert on property tax law.


FAQ on Churches and CC

In an attempt to get clear information to homeschool groups, CC Directors and churches I wrote a FAQ page. It was referenced in the article on The Roys Report.

And I wrote a a follow up blog post Tax Assessor Clears Confusion on CC Communities Using Churches that was also referenced in the investigative report by Josh Shepherd.


My real concern is for the churches who were innocently or ignorantly (or perhaps deliberately) deceived by CC Directors. The Directors hid the fact that they were business operating in a church.

Some were ignorant of why they were instructed by CC, Inc. to tell a church host “We’re just a bunch of homeschool moms” or “we’re a Christian homeschool program.”

CC Directors, as instructed by CC, Inc., hid the fact that they were businesses operating in a church. Some Directors had the gall to ask for free rent for their “community” (remember it’s really their business) too!

There is a saying that a whole truth told as a half truth is a whole lie!

Yes, CC communities are “a bunch of homeschool moms.” That’s a half truth told as a whole truth. The half omitted is that the CC “community” is a BUSINESS!

The local CC Director may not have understood the difference prior to 2019, but CC, Inc. has understood the difference since at least 2016, probably much earlier! In fact, they sent a cease and desist letter in June 2016 threatening financial damages to a CC mom, April Palmer (as mentioned in the article), who told ten local churches that the CC communities they were hosting were profit businesses.

A homeschool mom tells ten local churches the truth and CC Inc. threatened her with a lawsuit.

Why?

Telling the licensed Directors and churches the truth would damage their business model which depends on churches not knowing the truth that CC “communities” are businesses owned by each Director. It’s crass to say, but it’s all about the money to CC Inc.


My concerns for churches and homeschool groups

I am concerned for churches potentially facing property taxes like the two mentioned in the article and perhaps unrelated business income tax because they believed they were hosting a legitimate nonprofit homeschool program.

And I am concerned that all homeschool groups may be viewed suspiciously by churches. This can make it harder for the legitimate, honest nonprofit homeschool groups to find church hosts (post COVID). I’ve been told of churches now asking homeschool groups for IRS 501c3 determination letters to prove the group is a nonprofit organization.

Shame on CC Inc. for making churches suspicious of all homeschoolers.

Shame on CC Inc. for putting churches at potential risk of incurring property tax.

Shame on CC Inc. for duping your own customers (i.e., licensed Directors), by not explaining the full truth to them, exposing them to potential liability (owing payment of a property tax bill to the church).

And shame on CC Inc. for not changing their business model back in 2016 (or earlier) and instead continuing to reap large financial rewards while putting all the risk and liability on CC Directors and churches.



Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders

Does Classical Conversations exploit homeschool parents?

Classical Conservations Inc. CEO Robert Bortins Jr. addressed thousands of homeschooling families in a simulcast broadcast from Albemarle, North Carolina on October 18, 2017, . (Image: Screenshot / YouTube)

Josh Shepherd an investigative journalist, has been researching the business practices of Classical Conversations for several months.

He released an article on the Roys Report titled “Whistleblowers Say Classical Conversations is Multi-Level Marketing Scheme that Exploits Homeschooling Parents” at https://julieroys.com/does-classical-conversations-exploit-homeschooling-parents/

It’s an interesting, eye-opening, and thought provoking articles. I was interviewed by Josh Shepherd for the article and I am quoted in it several times because I have had so many conversations and business consultations with CC Directors in the past few years.

Background on Classical Conversations’ business model

Classical Conversations is a unique homeschool business. It offers curriculum to homeschool families and once -a-week “communities” where “tutors” display to the students and parents how to implement the curriculum in their homeschool. The “communities” have the feel of a nonprofit homeschool co-op, but the “communities” are almost always for-profit businesses owned and operated by each Director. Each Director agrees to a licensing agreement with Classical Conversations Inc. that is similar to a franchise agreement. Each Director sends a significant portion of her income back (averages about 15%) to CC Inc. as a licensee, much like a franchise operator does.

I became aware of the franchise-like business structure of CC, Inc. and its Directors around 2015. In 2017, I became more and more concerned as I spoke with many CC Directors at homeschool conventions and via email and found they were very confused. Many did not realize they had agreed to operate a business. Many had made significant mistakes on their tax returns. I began creating several blog posts on my HomeschoolCPA.com website to clear up their confusion.

My concern is now and always has been for the individual Directors because I care about homeschool group leaders. I want CC Directors to have the information they need to make a wise decision before they become CC Directors. I also want them to stay out of trouble with the IRS and state and local authorities.

Taxes for CC Directors ebook


As early as 2013 I offered more than once to write an ebook for CC Directors to a local CC Area Representative in Ohio. I never heard from CC Inc., so in the fall of 2017 I decided to write a book myself and help the poor, confused CC Directors I had been hearing from stay out of trouble with the IRS.

I told Robert Bortins, CC Inc. CEO at the 2017 HSLDA National Leaders Conference that I was writing a book titled Taxes for CC Directors and he thanked me for the support I gave to CC Directors.

In November 2018, I received an email and arranged a phone call with Keith Denton, COO of CC Inc. They wished to have distribution rights to the ebook. I thought that would work well, since I would find it difficult to reach CC Directors myself to tell them about the book. (I am not allowed to join Facebook groups for CC Directors since I am not a Director myself.) So I agreed. CC paid me $2,500 for the sole rights to distribute the ebook.

I sent Keith Denton my initial version of the book on Taxes for CC Directors in January 2019. After 1400+ corrections and additions by their attorney and two months later, CC added the 60 page ebook to their Directors Licensing Guide, a rather large online-only guide for licensed Directors.

Very shortly after (in August 2019) CC directors emailed me saying they could not access the ebook. Some people claim that CC bought the distribution rights and then “buried” the book. It made me wonder why they would pay for the rights and then not distribute it to each CC Director.


I rewrote the ebook after the major tax changes in 2019 and to appeal to a larger audience. I released it January 2020. It is now called Taxes for Homeschool Business Owners and available here.


CC Directors carry all the liability

My concern for CC Directors grew. I have concerns about the liability they take on when they agree to start a community and become a licensed Director for CC. They are responsible for:

  • Hiring workers (tutors) and correctly classifying them as employees, payroll processing and taxes, employee application and background checks
  • Building lease and rent, building safety and insurance, and potentially harming the church’s property tax exemption by operating a for-profit business on church property
  • Safety of children and all adults participating which includes physical safety, health and COVID precautions, and mandatory reporting of suspected abuse.
  • Daycare licensing if the community offers a nursery
  • Tax reporting including 1099-NEC or W-2 filings for workers and Schedules C and SE on their individual tax returns
  • Financial management including invoicing parents, record keeping, paying bills, etc.
  • Not using using volunteer labor or allowing Independent Contractors (i.e., tutors) or employees to volunteer
  • Business registration and licensing at the state and county level
  • Complying with all the requirements in the CC licensing agreement including operating the program, hosting information meetings, attending training sessions, etc.

That’s quite a long list of responsibilities and potential areas of liability for a CC Director.

How much does a CC Director actually make?

In the article Josh shared a chart of income and expenses from several CC Directors. The fee they must pay to CC Corp averages 23% of their total revenues. Most Directors paid 15% of their revenues to CC Corporate. The profit from all their efforts averaged $2,811 working about 20 hours a week for a school year. The profit ranged from a $5,772 loss to $12,603 profit.

I think this information will be helpful for potential CC Directors to examine and ask themselves if the potential profit is worth the hours that a Director must put in to operating a CC community.

Source: https://julieroys.com/does-classical-conversations-exploit-homeschooling-parents/
*Data supplied by Carol Topp, CPA. ^Director G used non-standard accrual accounting during the two years reported. The person recorded income over two semesters, yet had to pay all CC fees in the fall semester.

Many CC Directors tell me that they operate a community not to make a profit but to benefit their children with a classical education. I frequently hear, “I am a Director to help pay for my children’s tuition.” That’s very honorable, but that same purpose can be accomplished without taking on the financial, legal, and safety liabilities of running a CC program.

Almost all homeschool programs operate as nonprofit organizations with limited liability for their leaders and members. CC Communities are a noticeable exception. Nonprofit organizations also have a board or team of leaders to help carry the responsibility. CC Directors carry all the burdens alone since it is their business.

Is being a CC Director worth the liability?


Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders



HomeschoolCPA unavailable until November 6, 2017

Image from PilgrimTours.com

I will be unavailable from October 24, 2017 through November 5, 2017. I will not be replying to emails and will be unavailable by phone.

I will be on a long-desired trip to Israel, walking where Jesus walked!

I’m traveling with a group called Pilgrim Tours. I’ve heard nothing but rave reviews about their tours. It will be a busy 10 days since we are traveling up and down the country seeing Galilee, the Dead Sea, Masada, Jerusalem and much more.

Thank you in advance for your patience as it will take me some time to catch up after I return.

Carol Topp, CPA

HomeschoolCPA.com

HomeschoolCPA needs help and is hiring (please share!)

hscpa-sub-job-ad

Do you have an accounting background and want to help homeschoolers?

I’m Carol Topp, CPA, the HomeschoolCPA, and I’m looking to hire someone to help me.


This is a great opportunity for a homeschooling parent with an accounting background. It’s flexible, home-based, and very rewarding!


Description:

I’m looking for a subcontractor who will prepare IRS Forms 1023 and 990/990-EZ for my homeschool nonprofit clients. The completed forms will be submitted to me for review and signature. You will be an independent contractor, not an employee of Carol Topp, CPA, LLC.

You will work remotely from your home/office and chose your work hours. The hours are flexible and could be sporadic. There should not be any rush jobs. You should have several weeks to get the forms prepared, but there will be deadlines.

You will not be responsible for recruiting clients or corresponding with clients, but you are expected to keep client information confidential.

Duties:

  • Prepare IRS Form 1023 Application for Tax Exempt Status
  • Prepare Form 990, 990-EZ Annual Information Returns for Tax Exempt Organizations
  • Correspond with Carol Topp on a regular basis on the progress, data needed from the client, and questions you have.
  • Become familiar with IRS and state nonprofit filing forms. This may mean taking classes on preparing these forms. These classes are your responsibility.
  • Comply with federal, state, nonprofit filing requirements by studying existing and new regulations.

Qualifications:

  • Education (Bachelors degree from four-year college or university) and experience in accounting. CPA designation strongly preferred.
  • Familiarity with IRS Form 1023 and 990/990-EZ either through experience or through education.
  • Homeschooling experience desired.
  • Ability to work independently.
  • Attention to detail, deadline-oriented, confidentiality, time management

Compensation:

Compensation will be 50% of my fee charged to my client. The fee can be negotiated after a trial period based on experience and successful completion of preparing Forms 1023 and 990/9990-EZ in a timely and correct manner. Subcontractor will be paid when final form is delivered to Carol Topp, CPA.

Please share this information with everyone in your local homeschool group, though social networks, email and with your friends who you think might be interested.

If you’re qualified and interested in helping me, email me some information about yourself, your education and experience to Carol@HomeschoolCPA.com. We’ll set up a phone interview and discuss the job responsibilities.

 

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Thanks,

Carol Topp, CPA

Save

Save

Time off needed. HomeschoolCPA thanks you for your patience.

 

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Dear readers,

I will not be able to reply to your emails or posts here as quickly as I would like. I need to take a week or two off of work to help my 25 year old daughter who broke her leg this past weekend.

She cannot do much in her own. She needs help from two people to get into and out of bed, get to the bathroom,eat, etc. She is not to be left alone. I’m grateful that I work from home and that frequently my husband can work from home as well.

I’m also grateful that her accident (she slipped down a steep hill) happened one week after she moved back to Cincinnati, so we can take care of her.

Please pray for her pain to lessen and her healing to be quick.

Thank you for your patience.

Carol Topp, CPA
homeschoolCPA.com

Homeschool CPA, Carol Topp returning to work part time

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Dear friends, clients, and visitors,

I thank you all for your patience and your prayers for me during my surgery and recuperation. The surgery went well and the surgeons are pleased. If you’re curious what I had done, read more here: https://homeschoolcpa.com/previvor/

The recuperation is taking longer than I expected. I returned to part time work on January 5, 2016, but I can only sit at my computer for a few hours before I need a rest.

I may not reply to you emails in as timely manner as I would like, so please be patient.

I hope to return to full time work in February, Lord willing.

Thank you for your patience as I continue progressing (and resting) toward a full recovery.

 

Carol Topp, CPA

Is my homeschool group considered a school?

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Hi Carol,
I took a look at the 1023-EZ worksheet to see if we qualify for filing as a tax exempt organization. Question #11 asks if we are an educational facility. Then it goes on to define what they mean. I do not know how our organization would not fall into that category. Our goal is to support homeschooling families by providing weekly classes for middle and high school students. We do make it clear that our tutors are working alongside parents. Parents have the final decision on the grade their student will receive for the class. So, what do you think? Does that mean we do not qualify to apply for tax exempt status?

Virginia

 

Virginia,
Form 1023-EZ Eligibility Checklist Question #11 asks if your origination is a school, college or university described in section 170(b)(1)(a)(ii). That part of the Internal Revenue Code describes a school. I do not consider homeschool programs to be a school as the IRS defines “school.”

One aspect of a school is a “regular faculty,” which the IRS defines as

“qualified teachers instruct the students, and the same teachers do so on a recurrent basis.”

Source: Internal Revenue Manual  viewed https://www.irs.gov/irm/part7/irm_07-026-002.html#d0e549 on 5/11/15.

And by “qualified” the IRS means:

“certifications by the appropriate state authority or successful completion of required training.”

Source: Instructions for Form 1023

So when you look beyond the Eligibility Checklist into the guts of the IRS code, you’ll probably agree with me that homeschool organizations are not schools because they do not have regular, “qualified” faculty. Most of the teachers in your homeschool organization may be qualified to teach a class at your homeschool co-op, but are not state certified, nor trained as teachers.

Your homeschool organization (probably) qualifies to be a 501(c)(3) tax exempt organization as an educational organization, but not as a school.

I hope that helps!

Carol Topp, CPA

Teaching Teenagers and Recent Grads About Money (podcast)

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My latest podcast episode is part 2 of a presentation on how to teach kids about managing money. I explain the important lessons to teach high school students and young adults.

Listen here.

This Handout lists helpful resources for teaching teenagers about managing money.

 

This is part 2 of a two-part presentation. Listen to Part 1 .

You might be interested in my 4-part podcast series in teaching kids about money:

Episode 7: Teach Preschoolers About Money

Episode 8: Teach Kids About Money

Episode 9: Teach Pre-Teens About Money

Episode 10: Teach Teenagers About Money

 

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My newest book Career Exploration for Homeschool High School Students is available in print and ebook format. Learn more.