Here at ENPICA we often get questions from our associations about whether a foundation would impact their organization and how its role and the role of its board are different. We would like to take this opportunity to talk about the difference between the two types of organizations, and perhaps encourage you to think about how establishing a foundation might benefit the important work you do for the students you serve.

A local or state association is tasked with providing and managing the multitude of student programs contained in the co-curricular activities of its partner schools, including organizing and coordinating a variety of classroom and regional activities. Each association works with their national association to develop these programs and to create events and competitions for student members to showcase their skills. Most, if not all, associations have a Board of Directors or Advisory Board to oversee the creation of Bylaws and membership requirements and to help with the many activities of the association such as event coordination and competition judging.

Some associations have realized the need to form a separate non-profit entity in the form of a foundation to manage the fiscal resources and responsibilities related to the association. Foundation Boards of Directors or Advisory Boards are usually comprised of individuals who have financial and legal savvy and understand the importance of sound financial management and developing effective and responsible budgets. Foundations may be minimally involved with program supervision or event organization.

Associations who have established foundations understand the importance of having a separate organization that is in charge of raising some of the funds needed for the association to operate, including organizing fundraising activities and applying for appropriate grants. Additionally, having a foundation can simplify finances in the event of a leadership change. This frees up valuable time for the association and allows them to focus on what they do best – helping students achieve their career and technical education goals. Perhaps equally important, should an association compromise or lose their national charter, having a separate foundation in charge of fiscal matters can reduce the likelihood of the national organization acquiring the assets of the association.

As the experts in CTSO Risk Management, ENPICA understands and acknowledges the unique position these associations have in the education arena and the value they contribute to their communities. Because we truly care about what you do, and believe in the Mission of your work, we want you to be protected from events that can prevent you from delivering the services you work so hard to develop and implement. As separate entities, both associations and foundations should be insured against risk. We have a number of products that can protect your organization and events as well as your directors and officers. If you have any questions about this article, or would like additional information, a free risk assessment, or an insurance quote, please feel free to contact us.