Carol,
We have one entity (group) that works outside of our association, this is our 
Co-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 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 would be fewer people to recruit 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.The co-op could even have its own committee to run just the co-op. 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.
You also need to consider 501c3 tax exempt status. It is easier and cheaper to apply for tax exempt status with the IRS just once, not twice. And the annual reports to the IRS are filed once a year, not for each organization. So having one groups with several programs under it is recommended.
In my experience, most homeschool groups have a co-op under their nonprofit organization’s umbrella.
Carol Topp, CPA
