Homeschooling is exploding in light of the COVID-19 pandemic and existing homeschool groups cannot accommodate all the newcomers.
But homeschool leaders want newbie homeschoolers to be successful and have support, so what’s to be done?
How about your existing homeschool group help start another homeschool group? It can be pretty easy. It’s called a “fiscal sponsorship” arrangement Here’s how it would work:
Step One:
Read up on a concept called “fiscal sponsorship.”
These blog posts will get you started:
- Fiscal sponsorship: What is it and how can it work for your homeschool group?
- How to use another nonprofit’s tax exempt status (legally!)
- Sponsoring a football program under your homeschool group
Step Two:
Meet (online via Zoom) with the leaders of the new group. Explain the arrangement. The new group will exist as a “program” or a committee running the program under your existing homeschool organization.
The new program or committee leaders will get:
- Use of the parent organization’s EIN (employer Identification Number)
- Use of the parent organization’s nonprofit incorporation status. This means the new group does not have to form a new nonprofit entity
- Use of the parent organization’s bank account. The parent organization may want to set up a new checking account for the new group with its existing EIN. Make sure the treasurer has online access to the new checking acocunt.
- Use of the parent organization’s 501c3 tax exempt status. This is a HUGE advantage. The new group won’t have to apply to the IRS to grant tax exempt status. They can be up and running immediately!
- Use of the parent organization’s bylaws. The new group will be under the parent organization’s bylaws as a new program, so the new group doesn’t need its own bylaws.
- Use of the parent organization’s Policy Manuals, registration forms, etc.
- Use of the parent organization’s website, Facebook account, and other online services for registration.
- Coverage under the parent organization’s insurance policy. Another HUGE advantage. The parent organization should call its insurance provider and explain it is expanding. Ask for a new quote on what the increased cost will be. Make sure the new group pays the parent organization for their share of the insurance.
The new group will need to:
- Set up a committee of at least 3 people to operate the new program. One of the parent group’s board members should be invited to all committee meetings to offer help and advice. She should report back to the parent organization on how the new program run by the committee is doing.
- Find a location to hold their program, meet-ups, classes, etc.
- Pay the parent organization their share of the insurance
- Give financial reports to the parent organization at least every 3 months, although monthly is recommended.
- Make 2-3 year plan for launching itself to be an independent organization.
Agreement in writing
I strongly recommend a written agreement signed by the Chair of the parent organization and the new program committee chair.
The agreement should outline the bullet points given above and add any other issues you think of.
If you want examples of agreements, you could look at some fiscal sponsorship samples
or read
Fiscal Sponsorship: 6 Ways to Do It Right by Gregory Colvin. It describes six models of sponsorship that have been approved and accepted by the IRS. It details how the models work and why, how they differ and how they are similar.
Summary of the book and its six models of fiscal sponsorship by the author: Fiscal Sponsorship: 6 Ways to Do It Right synopsis Colvin.pdf
Advantages
The advantage of this idea is that your group can help start a new group as a program and there is very little you need to do except offer advice! The new group will have the advantage of being able to focus on starting their activities and not have to worry about paperwork, setting up a bank account, government filings, etc. The parent group has already done all that!
This comparison chart of starting a new organization or creating a committee as a fiscal sponsorship under an existing nonprofit was created by attorney Gregory Colvin. It shows how fast a committee can get started on running a new program.
It can work!
This idea is really something new and existing homeschool groups could do together to help new homeschoolers learn from the experienced ones!
If you have more questions about fiscal sponsorship or starting a new homeschool group, I am happy to set up a phone consultation. Contact me and we can discuss what questions you have!
