Questions

We need to transform our company to a non-profit organization. What steps do we need to take to change our company while protecting ourselves?

We're Canadian base and only operate in Canada.

4answers

My recommendation would be to speak with a qualified attorney and accountant on this.

For profit or "non-profit" in the end is really just a tax category (think of the NFL in the USA -- it's a "non-profit" entity -- I just read the NFL commissioner makes $29 million a year).

Either type of entities will need to drive revenue and will have expenses.

Always curious of the people saying they "need" to do this.

Focus. #deliver

- mike vizdos


Answered 7 years ago

Depending on Canadian law, you will most likely need to close your business and establish a Non-profit. They will need to be two separate entities if you want to do tax deductible donations.

Are you worried about protecting your IP? Your customers? I would need to know a little bit more about what you are trying to do in order to give you a more in depth answer.


Answered 7 years ago

My first question is why are you wanting to switch to a non-profit model? I raised over a million dollars in Canada for the Blind and I didn't have to become a non-profit to do it. If you partner with the organizations who have a name why start something brand new?


Answered 7 years ago

The development of commercial revenue streams allows traditional non-profit organizations to increase financial certainty in response to the reduction of traditional funding sources and increased competition. To capture commercial revenue-generating opportunities, traditional non-profit organizations need to deliberately transform themselves into social enterprises. Through the theoretical lens of institutional entrepreneurship, we explore the institutional work that supports this transformation by analysing field interviews with 64 institutional entrepreneurs from UK-based social enterprises. This extends our understanding of the ex-ante strategy of incorporating commercial processes within social organizations.
In response to these challenges, scholars suggest that traditional NPOs can acquire commercial revenue streams to ensure financial self-sufficiency. To effectively implement practices that attract commercial revenue streams, traditional NPOs need to deliberately reconfigure their current operating models and introduce new business functions. However, unlike NPOs that traditionally rely on private donations and government funding, SEs focus on generating incomes from commercial activities. Thus, we define a SE as a form of NPO that makes use of productive activities to generate commercial revenue in support of its social mission.
This definition is in line with the Earned Income School of thought Footnote 1 that stresses the vital role of SEs in organizing a range of commercial practices to help diversify their funding base and manage the risks associated with income generation . We argue that this practice of turning traditional NPOs into SEs fits the description of institutional entrepreneurship. Institutional entrepreneurship represents activities of transforming established institutions in ways that diverge from the status quo. From this perspective, the SEs’ executives play the role of “institutional entrepreneurs” who engage in activities to transform existing institutions into new ones.
Previous studies that investigate the formation of SEs often focus on understanding how institutional entrepreneurs respond to and accommodate dual social and commercial processes. Although this research line has generated valuable theoretical insights, one area which remains relatively unexplored is how SEs are transformed from traditional NPOs by incorporating commercial processes within social organizations in the first place. Specifically, we find that the transformation processes begin by traditional NPOs engaging the commercial revenue strategy.
Through building commercial revenue-generating mechanisms and establishing business partnerships with for-profit organizations, traditional NPOs can exploit commercial opportunities and develop commercial revenue streams. Institutional entrepreneurs focus their attention on constructing business-like working processes and supporting structures within traditional NPOs and developing capacity for managing business-like operations. Finally, we find that the transformation processes place great emphasis on legitimating the socio-commercial business model by advocating business-oriented strategic direction and maintaining social organization status to address stakeholders’ concerns about the newly emerged SEs. First, through the theoretical lens of institutional entrepreneurship, we identify different domains of institutional work that support the incorporation of commercial practices within traditional NPOs.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath


Answered a year ago

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