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  • Bank account for self-chartered pack?

    Hi all,

    I am looking for advice on opening a bank account for our new pack.

    We are self-chartered, just a group of parents who got together.

    Are there any financial people out there who can tell me the steps for opening a bank account for the pack? Do we need a tax ID? How do we get one? Will the pack need to file some kind of tax form in April? Since we don't have a CO, do we have to do anything special to be considered a "charitable organization"?

    It is very important that the pack's income does not end up being reported on my personal income tax form.

    Thanks for any help!

  • #2
    Not sure about all that, but make sure you have two sigs required.


    • #3
      I know a tax id is needed to open a checking account but I am not sure about the other items you asked about. Intuitively, it seems like creating this organization to own the Pack would be more difficult/risky/work than just going out and finding a willing existing non-profit to be your CO. Just some thoughts.....


      • #4
        In order to be able to charter a BSA unit (Pack) you need to file the papers to become an actual organization (Friends of Pack 123). A not-for-profit is best. I would talk to your District Executive (DE) to get info on what you need to do. There should be a council volunteer who works with the council financials who might be able to help you also.


        • #5
          "In order to be able to charter a BSA unit (Pack) you need to file the papers to become an actual organization (Friends of Pack 123)."

          We wrote a letter to our council stating that we are "organizing for the purpose of creating a Cub Scout pack" and 5 adults signed it. This letter was accepted by the council. Is this what you are referring to, or do we need to do something else to become a legal entity?

          "There should be a council volunteer who works with the council financials who might be able to help you also. "

          I will look into this. My DE keeps saying that "it's easy" to open a bank account, but when I called a bank to do this, there were all kinds of legal forms to fill out, and the banker advised me to contact an accountant....



          • #6
            Your DE should be giving you more hands-on, specific advice other than that it's "easy." A huge part of the DE's job is to help start new units. Play hardball. Tell him or her that if you don't get some more support and clear answers, the pack will fold because of a lack of assistance from the council, and he or she won't get that new-unit credit.

            You may need to incorporate and file as a nonprofit organization. Rules and laws vary from state to state ... your DE and professional council staff are really the best resource. If the DE can't give you any more advice, call your council office and ask for the field director or director of field service, the next person up the rung.


            • #7
              Yah, first off yeh probably don't need to,, and probably shouldn't, incorporate as a charitable organization.

              Under da law, you are probably considered an "unincorporated association" by your state, in all likelihood at least . The bank will ask for a tax ID or EIN. If yeh want to keep everything clean and neat, yeh can get one of these issued to the unincorporated association online at da IRS website, The bank may also request a copy of your association bylaws. Alternately, yeh can use your SSN and make sure yeh get a non-interest bearing account. A friendly banking officer at a local bank should be able to help yeh through things.

              Now, here's da thing.... Do yeh really want to stay an association of a few parents? There are all kinds of good reasons to seek out and team up with a "real" organization as a chartering partner. Stability for the pack when the original parents move on, last-ditch backup when a parent becomes disputatious and doesn't play nicely, building and other resources, exemption from state sales taxes, etc. Da parent associations really should have bylaws, and yeh have to decide things like if one family leaves, does it get to take its share of the property, or do the other families have to buy them out? Also, as an association, yeh don't have the same insulation from liability that a corporation has. Not a big deal, but perhaps a small deal...unless something really bad happens.

              Maybe now is da time to think about moving the charter over to a bigger partner? Your DE will have a list of candidates in da area.



              • #8
                Thanks, Beavah. BTW, would you mind telling me what accent you are typing with? It would really help in my mental translation. Boston? Maine? Scotland? Louisiana? I can't figure it out!

                As far as hooking up with a CO is concerned, I originally asked my church if they would. They said that it was not the right time for them (they are in the middle of building a new building and would not have any space for us to meet). While researching CO's, I realized what a commitment it is for an organization to sponsor a pack, and I didn't want to partner up with just any organization that I knew nothing about. While waiting for my church's response, I had asked my DE what our other options were. He said he could put together a "group of concerned citizens" for us and also said that if 5 of our parents signed a letter, we could be our own chartering organization. That seemed perfect to us.

                Only now, as I look at the paperwork for the EIN, do I realize that this self-chartering is a little trickier than it was first presented to me. I had not realized that we would need by-laws, and until I read some other posts on this website, it had not occurred to me that other parents could be "disputatious"....

                Thanks very much, everyone, for your feedback!


                • #9
                  I am not a tax accountant, or a CPA, or a Comptroller, nor do I play one on TV.
                  That being said, I will note that each of the aforementioned organizations (Scout Council, Bank, IRS, State Sales Tax folks, Cub Scout parents) have their own concerns and requirements. Here is what I observe:
                  *Parents want a Cub Scout Pack, and the program/bling/fun that comes with it for their boys and themselves. (note: underline "themselves")
                  *State Sales Tax folks want to know if you are selling anything (popcorn? candy bars?) and should you have a sales tax license and pay the S/T to the state?
                  *IRS wants any "organization" to have a tax number so the org can be tracked to make sure they really are a non-profit, charitable org.
                  *Bank wants to make sure the "owner " of the bank account is legit, responsible and they are not breaking any laws or laundering any ill- gotten gains.
                  *Scout Council wants a new Cub Pack so they can say they have a new Cub Pack. Numbers are everything to the DE and Council. Fees and Dues collected are important too, but they NEVER cover all the expenses inherent in governing the Scout program, which is important, but where the priorities are depends on who is the DE and the SE. Ultimately, any 5 adults could declare themselves "Friends of Dry Gulch Valley Cub Scouts" and they would probably get a BSA Charter.
                  The CO is the "owner" of the Pack and as such, the CO is the party responsible for any financial repercussions of the Pack.
                  I knew a Cub Pack chartered to the charitable foundation of the local hospital. The CP used the hospitals tax ID, but other than signing the charter papers each year, the hospital folks did nothing with/for/to the Pack. It eventually folded for lack of support. No one outside the actual Pack cared for the Pack.
                  When your group of interested parents move on when your boys age out or drop out, what will happen to the Pack?


                  • #10
                    Thanks, SSScout, for your break-down of these machinations. It proves once again that I am not prepared to make this decision without some guidance!

                    "No one outside the actual Pack cared for the Pack.
                    When your group of interested parents move on when your boys age out or drop out, what will happen to the Pack?"

                    I guess I imagined that, after our boys move on, if no one is interested in participating in the pack, then the natural consequence would be that the pack would close. Is that a bad thing? Or perhaps morph into a Troop, as time goes on.



                    • #11
                      in general, you file a short form with the secretary of state to become a non-profit. Write to the Secretary of State to send you the form. This will give you exemption from sales tax, and better prices on some pack purchases (wholesale prices). also exemption from property tax should the pack buy real estate
                      apply to the IRS for tax exempt status concerning pack income. They will enclose a guide book.
                      Filing tax returns is not required unless the account rises above a certain level, or you generate income not used in scouting or not reflecting scouting. this is better explained in the guidebook
                      You will need to elect officers


                      • #12
                        "You don't appreciate the water til the well runs dry"

                        I still run into the Scouts/parents from the folded Cub Pack I mentioned. I wonder what those boys will think if they go back and try to retrace their history.
                        My son went from Cubs to Boy Scouts, and opted to join the same Troop I grew up in. I didn't realize it when I was a Scout in it, but the history is important. I felt kinda of good when I realized that this Troop had been putting along for at least 50 years. Then I realized that my old Cub Pack was still there, too!
                        Mimi: What is your goal? Just for your boy or perhaps for his son, too?
                        "A tree is not planted for us, but for our grandchilden".


                        • #13
                          As others asked -

                          Do you plan on growing your Pack by recruiting other Scouts and their families? Or, is this Pack to be ONLY for the sons of the 5 adults who signed the letter?

                          If you plan on recruiting others, and, hopefully, creating a real, lasting, Pack, then you need some kind of structure, or organization (hence Charter ORGANIZATION), in place, not just 5 signatures on a piece of paper.

                          Have you filled out a New-Unit Application, paid your Unit Charter fee, and filled out, and paid registration fees for, 5 Adult Applications (including their completed Youth Protection Training certificates), and 5 Youth Applications?


                          • #14
                            Thanks, boomerscout, SSScout and Scoutnut, for your replies.

                            As for the purpose of the pack - we are starting a pack for homeschoolers to provide as much of the scouting experience as possible for the boys. My family has been involved in a "regular" (non-homeschooled) pack for a couple of years, and in addition to the meeting times being inconvenient for us (evenings), I was frustrated because we were unable to do more activities, due to the other families' work and school schedules.

                            We now have 8 families and 11 scouts. I cannot tell you where we will be next year, or 5, 10, 15 years from now. My hope is that we continue to grow to become a positive resource for homeschoolers for years to come. However, if there are no homeschoolers that are interested in scouting, in my mind, *that* will be the deciding factor, not whether we were self-chartered or had a CO.

                            But I am here to learn about getting a bank accout for a self-chartered pack, and what I am learning is that even though we are "BSA legal" with our 5 signatures on a piece of paper (and all of them registered, pd for and YPT'd), for pack stability and other practical reasons (e.g., bank account), it may not be desirable to be self-chartered.

                            It isn't clear to me how big a role the CO plays in running the pack - it was presented to me as almost unnecessary, that all they do is provide a meeting place for the pack. Maybe this is a good time to ask about that, too!

                            Still learning! Thanks again for all of your responses!


                            • #15
                              One small correction to the generally good advice you received above; all tax exempt organizations are now required to file an IRS Form 990, if you are a small tax exempt (gross receipts less than $25,000) you can file electronically using Form 990-N, which is a very short "postcard" type return. See