Covington Academy of Heritage Trades 501(c)3 Formation
Category: HBA Operations
Location: Erlanger, Ky.
Size: Local Association: 201-600 members
Year: 2023
The BIA of Northern Kentucky created a new 501(c)3 to operate the new Covington Academy of Heritage Trades, dedicated a board, and accepted a lease arrangement with the City of Covington to operate a real-life learning lab for the Academy. The 501(c)3 structure avoids risk and creates a corporate veil between entities that protects one entity from another should a challenge arise, legal or otherwise.
The association worked with elected and appointed officials to abandon their requests for board inclusion and dedicated extra hours to complete the work. The organization’s new Board is represented by five individuals, including the President, who is the Executive of the BIA, the Treasurer, who is the BIA’s Director of Finance, and the other three, who are named by the sole member of the 501(c)3, which is also the BIA.
The corporation is set up so that special meetings, agendas, or additions to the Board can be made only with two-thirds approval, giving the two appointed BIA staff positions control of the entity should governance prove tumultuous. As a tax-exempt entity, the Academy can purchase tax-free and has no real estate tax liability, making it financially easier for the entity to be sustainable.
