Why a Boy Scout Troop Might Benefit from an Affiliated Entity

It’s no secret that the BSA has been under a lot of heat lately. As a result, local troops have been thinking about what they can do to protect themselves. One question RENOSI has been seeing a lot is the question of legacy. At RENOSI we think opening an affiliate nonprofit organization could be the key.

Often, local troops amass assets beyond what they need to operate on a year-to-year basis. It’s always nice to have a nest egg.  Being able to support large projects when they come along. Maybe you have a trailer, a small building, or something like that. The assets mostly just sit there (where is the scout hut going to go?) and you don’t think about them too much. Lately, you worried, maybe it’s the troubles with the National BSA, maybe there was a close call at camp, maybe you think it’s just time to take some steps to get better protections on the troop’s assets. Whatever your reasons, an affiliated entity could be a solution.

What is an affiliated entity?

Good question. An affiliated entity is a separate nonprofit entity that is set up to protect assets against high-risk activities. The most well-known type of affiliated entity is the endowment fund of a university. The university has a budget, it needs a certain amount of money every year, but it doesn’t need the entire endowment. The university would like to invest that money, and doesn’t want the endowment to be at risk if the university gets sued. So it sets up a separate nonprofit to hold the funds and invest them appropriately. The affiliate nonprofit appoints a board to keep an eye on things, and bam there you go an affiliated nonprofit. 

Is it really that simple? For universities…no…there is a lot more that goes into an endowment fund. For boy scout troops that really is about the size of it. You would have a separate entity that holds most of the funds handled by people appointed by the troop. The troop keeps what it needs to operate its budget every year. The affiliated entity would donate money back to the troop whenever the need arose. Money is now held in an organization that doesn’t take the same kinds of risks as a troop (or really does much of anything at all).

Is it Fool Proof?

No, nothing is, and there are situations where depending on the facts and circumstances someone could get at the affiliated entity, and you should still be holding insurance for the higher-risk activities. But it does provide an extra layer of protection and control over the troop's legacy.

Ready to start your own affiliate nonprofit? Use code SCOUTS to save 50% when you get started with RENOSI!