📍 Hello and welcome to the Hybrid School Builders Podcast. I am your host, Rebecca Foley, and I am so glad you are joining me today. I am a fellow grassroots founder who is hoping to make your journey toward founding a sustainable hybrid school a little bit easier. If you are dreaming of starting a hybrid school—or if you’ve already gotten started—you are in the right place.

Join me as we dive into real stories, practical tips, and hard-won lessons I’ve learned to help you launch and grow your program with confidence. Remember, building a hybrid school is not just about creating a business or creating jobs. It’s not even just about serving the children who attend your program.

It’s literally about reshaping the landscape of education. And we can do that one community, one entrepreneur, and one program at a time.

Okay, so in this episode, let’s talk a little bit more about backend infrastructure—the paperwork and setup things you need to have in place at some point before you open.

Some of this is state or IRS documentation you need to be aware of and keep track of. Some of it is liability and insurance-related. I’m just going to walk through a list of things you need to be thinking about.

I’m assuming at this point that you’ve already filed your articles of incorporation with your state, which establishes you as a legal entity. We’ve also talked about money management and setting up a business bank account.

Now, when you incorporate with the state—even if you’re a nonprofit—you do not automatically have 501(c)(3) status. That’s an IRS designation, and it’s a completely separate application process. You usually have a couple of years after incorporating to apply for it. It’s not cheap, and it’s definitely something you want to work through with an accountant.

I won’t get into all the details here, but just make sure you understand that being incorporated as a nonprofit and being approved as a 501(c)(3) are two different things. Even before you’re approved, it’s still very important to stay on top of your bookkeeping.

Once you apply and (assuming) you’re approved, the IRS will send you a determination letter. Save that letter. Make copies of it. That’s the document you’ll need when you’re proving nonprofit status to banks, vendors, or when applying for sales tax exemptions.

This can be a one-time hurdle that’s worth fundraising for if you need to. Once you have your 501(c)(3), it’s mostly about staying on top of filings each year.

Sales tax is another area where rules vary by state, so you’ll need to check your local regulations. In many states, nonprofits can apply for sales tax exemption. This usually involves submitting documentation to the state and getting approval.

Once approved, you’ll receive paperwork or a number showing that you’re exempt. You can then present that when making purchases so you don’t pay sales tax. This can be especially helpful if you regularly buy from the same vendors—office supply stores, printers, things like that—because they can keep your exemption on file.

Charitable solicitation registration is another nonprofit-specific item. In many states, if you’re fundraising under a certain threshold—like $25,000 per year—the reporting requirements are minimal. You may just need to submit a simple annual form stating that you’re exempt from full registration.

If you’re fundraising above that amount, applying for grants, or running large fundraising events, you’ll want to make sure you’re properly registered and filing whatever annual reports your state requires.

Most states also require an annual report just to confirm that your organization is still active. For nonprofits, this often includes updating board officers. For LLCs, it may be a very simple filing with a small fee. These are things your state’s business website will outline clearly.

Then there are taxes. Nonprofits file a Form 990, and you’ll want an accountant handling that. LLCs report income on personal taxes, depending on how they’re structured. Either way, this is where good bookkeeping really matters.

Now let’s talk about insurance—another not-fun but very important category.

If you have employees, you’ll likely need workers’ compensation insurance. This is usually state-specific and based on payroll. A local insurance agent can help you with this.

You’ll also want liability insurance that covers your students and your program. This is often more affordable through group plans, such as church insurance groups or homeschool-friendly insurers. Event insurance can sometimes work for part-time programs, depending on your structure.

When talking to insurance providers, be careful with language. If you’re not legally classified as a school, it’s often better to describe your program as an educational service provider for homeschool students rather than calling it a school outright. Using “school” language can sometimes push you into a completely different insurance category.

If you rent space, the building owner likely has their own insurance, but you may still want property insurance for items you own—books, furniture, equipment—in case of fire, flooding, or other damage. Think of it like renter’s insurance for your program.

If you’re a nonprofit, you’ll also want directors and officers (D&O) insurance, which protects board members and officers if legal claims arise related to decisions they make. For LLCs, this is often called professional liability insurance.

Homeschool groups may also want to look into insurance options through organizations like HSLDA. Membership can give you access to discounted insurance through their partners.

All of this falls under infrastructure—the foundation that keeps your organization legal, protected, and running smoothly. This includes your bookkeeping system, admissions software, payroll system, insurance policies, and compliance tracking.

When you start hiring, make sure your payroll system is set up to handle tax withholdings, W-2s, I-9s, and other HR paperwork. The system may automate a lot of this, but someone still needs to manage it and make sure everything is filed correctly.

You don’t need everything perfectly in place all at once, but you do need to know what’s required and put reminders on your calendar for when things are due—annual reports, tax filings, insurance renewals, and so on.

Make sure your insurance policies are active before students are on site. That’s non-negotiable.

And if you’re a nonprofit, make sure your board is aware of compliance requirements. They shouldn’t be handling payroll or bookkeeping, but they should be asking whether filings were completed and reviewing things like annual reports and the 990.

Hopefully this helps you see the bigger picture of the infrastructure side of starting a hybrid school. It’s not the exciting part, but it’s what allows everything else to work.

📍 Thanks so much for listening today. Don’t forget to subscribe, and be sure to check out the resources I’m developing at startahybridschool.com.
Send me an email anytime—I’d love to hear from you. Until next time