The space quota for a parent organization must specify a limit that is equal to or greater than the sum of its children organizations and the parent organization itself.
For example, if parent a organization has two children organizations and each organization requires a space quota of 5 GB each then the parent organization has to have at least 15 GB set for its space quota.
Child organization #1 = 5 GB
Child organization #2 = 5 GB
Parent organization = 5 GB
Sum of children and parent = 15 GB