Have you set up a non profit?

[nonprofitorgs]

I am thinking of setting up a non profit the aim of which would be to provide specific resources free or base cost (informative website and books), and I believe there would be public benefit so would qualify as a charity. A lot of work would be required to set up the resources and I would like to be paid for this and also to be able to pay for expertise and services, and payment would come from grants/donations and this would all be set up with transparency. Has anyone done anything similar and if so which structure did you use? I am thinking that a charity with trustees might be inflexible and the admin element might become very time consuming and I am wondering if a company limited by guarantee might be more straightforward? But could that be seen as sufficiently not-for-profit to enable grants to be given?

Thanks!

This is all a bit confusing... are you wanting funding for materials or salaries?

Ive been involved in the not for profit sector for decades

everything costs OP and all though it’s called “not for profit”, that’s actually a misnomer. Charities or CICS do need to make a profit because costs go up. An income base that remains static and does not bring profits to be reinvested is a recipe for a failed organisation

you have to think of it like a business. Someone has to pay whether that is grants, individuals, companies, whatever

websites cost, accounts cost, the design and production of materials cost, your time costs, marketing costs - all of these costs need to be covered

you could try something like unltd https://www.unltd.org.uk/ or the school for social entrepreneurs https://www.the-sse.org/wp-content/themes/sse who will work with individuals for more advice

Surely you shouldn't be putting the cart before the horse? Why not check what funding/grants are available and check the criteria. Then you'll know whether charitable status is a requirement, whether a Limited by guarantee is a requirement or a CIC is a requirement (or a mix, i.e. a limited by guarantee registered as a charity). You can't really set up the structure without knowing the eligibility criteria.

When I was involved with re-opening our village library, that's exactly what we did, i.e. worked backwards from the grants/funding and created a structure that would maximise the grants we'd be eligible to apply for at the same time is providing a structure to operate the library, in terms of management, oversight, day to day "trading" activities, etc. We ended up with a limited by guarantee registered charity which owned and operated the library itself, that worked alongside a trading CIC, the latter being responsible for local fund raising, trading, etc., which "donated" all it's profits to the charity, hence no corporation tax on the trading profits.

What a lot of incredible useful information from generous posters, sharing their expertise. I have been contemplating setting up a charity because I am doing a lot of philanthropic work through my company, but we don’t qualify for grants as a result. But this has reassured me there is no point. Thank you to those who have shared their expertise!

Extremely helpful, thank you very much, hugely appreciated. And amazing that you re-opened your village library!

I agree with you about the costs. The "not for profit" bit is that I would be paid for what I do but not paid a profit for it. Some of what I am planning to do further down the line could definitely bring in a significant profit once up and running, but my idea is that other than actual costs, the money would be ploughed back in to produce more things which would work in the same direction. Eg publishing - could be big business, but the idea would not be to make a profit from it. And that all the accounting would be transparent, reasonable hourly rates, etc.

Thank you to everyone for all the amazing advice.

I appreciate that the posts about fundraising were meant to be helpful, and they were.

@sunshine244 sorry, I now realise who GW is! Thanks for your input.

I mean this kindly, OP, but you do sound a bit naive about the challenges of running a not for profit organisation. I'm not sure where you'd be looking for funding, but the vast majority of grant giving trusts and foundations will only fund registered charities. How much, roughly, do you think you're going to need, both in terms of your start-up costs and your ongoing running costs?

As others have said, the funding environment is crazily competitive these days, and it's very tough to get the money in. Even harder if you can't demonstrate any kind of track record, though innovative ideas can be easier to "sell" in the early stages of a project... and then they become harder to sustain when they are no longer "new".

If you want to set up as a company, rather than a charity with trustees etc, might it make more sense to charge end users for the resources that you provide? You could still do it on a not-for-profit basis? Or are your target audience likely to be unable to pay?

Thanks for this, IamaCharityCEO, great to have more input reinforcing what has been said by other posters. I think charging end users base cost is fine for some of the resources.