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Chartered Organization not a Legal Entity?

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Many years ago several PTOs in my area dropped scouting units (due to BSA’s ban of gay scouts).  Several formed “Friends of Scouts - Home Town” 501c3 Organizations.  They then chartered Packs, Troops and Crews our of these. The benefit was self determination as the leaders of the scout units also were responsible for the CO.  In our Pack/Troops case the CO founders were concerned about continunity as they would leave when their scouts left the program. So, several units left the FOS COs and found other organizations to take them on.  It wasn’t a bad short term answer and my understanding is that you could created a broad FOS CO and cover all packs/Troops in your area (if all the PTOs want to drop them).  I know a Pack nearby that currently working with other packs/Troops to form a combined CO due to lack of engagement from PTOs.

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Posted (edited)

I just did a quick search and found 6 Friends of Scouting corporations in my state. So it is definitely an option if you want to take on that work.

Edited by Eagle1993
Typo

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growing up, our CO was "group of citizens". basically the troop committee. 

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I saw a similar situation once. In this case, a small public school was closed and the students were consolidated into a larger public school. The units wanted to continue and maintain some connection to the former school.

Their solution was to form an alumni association. The charter was transferred from the school district to the xyz school alumni association, thereby keeping the old school's name on the charter and preserving a large part of the units' legacy.

 

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I think the head of your PTO is wise to be asking those questions.  Sounds like a legitimate concern, since one of the main reasons for the BSA's business model is the transfer of liability away from the BSA.  A BSA charter in effect just allows chartering organizations permission to use BSA program materials in the operation of the CO's youth program.  And from previous discussions over the years on this forum, the BSA has been discouraging the use of "Friends of Scouting" type shill CO's.  Notify your DE to find you a new CO, then wait it out.  DEs do NOT want to lose units...it's one of their primary job performance metrics and he/she will have to form two new units to make up for it.

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6 minutes ago, scoutldr said:

And from previous discussions over the years on this forum, the BSA has been discouraging the use of "Friends of Scouting" type shill CO's. 

Is that true?  I know a Pack just rechartered this Jan 2018 with a brand new FOS charter org. Absolutely no pushback from Council.  The hardest part is getting an official release from the existing charter.

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the unit would need it's own EIN to open a bank account

which is no big deal to get.

The PTO would be listed as the responsible organization.

no need for either to be non-profit.

I'm not a lawyer, CPA, or any sort of expert, just a person that has done a lot of research on this subject just a couple years ago and basically re-set up the troop after the previous SM passed away and lots of stuff was under his SSN

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28 minutes ago, blw2 said:

the unit would need it's own EIN to open a bank account

which is no big deal to get.

The PTO would be listed as the responsible organization.

Thanks for all the good replies you guys.  This is such a can of worms for everyone that being able to help sort it out is going to be quite the ordeal I'm finding. 

The EIN is a real sticking point for them.  The Boy Scout application for being a new CO does not ask the CO for its own EIN, so nationally and at the local council level,  there is no tracking of the actual EINs of COs that own and operate units (which I kind of blame for causing this mess, since it basically means Local Councils on the other side of the contract have no actual confirmation of whether the CO on the other side of theACA is an actual legally entity). 

The unit's assets, checking, and determination of whether it is a non-profit or not is reliant upon what its CO's status is, not the Local Council or BSA National.  The point of our CO is they are not, have not, and will never be their own legal entity.  The EIN they use when they do their own business is that of the school district. 

So, when the president of the organization signs our charter agreeing that the PTO has responsibility and ownership for the unit, what legal entity is actually accepting ownership of the unit?  It's not the PTO because they're not a legal entity, so there's no financial responsibility and no insurance coverage for non-scout related activities being provided by the PTO (since again not a legal entity).  The only two legal entities that her signature can be seen as representing is either:

1) that of her as an individual (and therefore she's personally responsible)   OR

2) that of her acting as an agent of the legal entity (school district) that her organization (the PTO) is itself operating under

If the legal entity BSA views she's signing for is herself, then that should be unacceptable by BSA (since she's an individual not an organization).  If the legal entity she's signing for is the school district then it is ultimately the district that owns this unit as well as the other 8 units that operate similarly in the district (using other school PTOs who also are not legal entities as the charter organization).  Therefore, the actual owner of all of these units (school district) should have 1 seat on the Local Council going forward instead of the 5 PTOs that operate under its umbrella each having their own seat?

Is there anything that is a counter to the viewpoint that the PTO is making?  

 

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I have never heard of a school district taking over a PTO like this.  As some others have said, it kind of defeats the purpose of the whole thing.  I completely understand their frustration at not being able to manage their own finances, especially while a Scout unit that THEY own is able to have its own bank account.  The PTO presumably was a "legal entity" (a corporation or something similar) at some point, and legally it may still be, but it is not being permitted to operate as one.  But as others have also said, the issue of whether this PTO qualifies to be a CO is really for the council/district.  I think that if anyone is going to provide the PTO with a "counter viewpoint," it should be the DE (or equivalent), not the unit.  And the council might well decide that you should have a new CO, since it is kind of questionable whether you have a qualified CO now.

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1 hour ago, NJCubScouter said:

I have never heard of a school district taking over a PTO like this.  As some others have said, it kind of defeats the purpose of the whole thing.  I completely understand their frustration at not being able to manage their own finances, especially while a Scout unit that THEY own is able to have its own bank account.  The PTO presumably was a "legal entity" (a corporation or something similar) at some point, and legally it may still be, but it is not being permitted to operate as one.  But as others have also said, the issue of whether this PTO qualifies to be a CO is really for the council/district.  I think that if anyone is going to provide the PTO with a "counter viewpoint," it should be the DE (or equivalent), not the unit.  And the council might well decide that you should have a new CO, since it is kind of questionable whether you have a qualified CO now.

I do not see it as the school district taking over the PTO.  Also I do not see it as the PTO not being able to manage there own finances.   In our local school system every parent group that supports any activity for any of the schools in the local school system has to use the school system PO system for any funds paid out of the funds that they have inside there account that is held by the local school system.  I have never heard of the local school system not writing a check for the PO that any of the groups have generated as long as they have the funds inside there account with the school system.  I know the local band boosters have generated a PO on Tuesday evening and had a check in hand to pick up supplies needed on Thursday.   

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Band bosters too?   This is different than my experience.  It seems like the school district is taking on the audit and finance responsibility for each of the organizations.  It really grows the scope and umbrella of the school district.  

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