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The Benefits Of Setting Up A Non-Profit Social Enterprise
Business

The Benefits Of Setting Up A Non-Profit Social Enterprise

Many entrepreneurs today are incorporating stronger ethics and social value into their activities, establishing their businesses as non profits geared towards making a wider impact, rather than focusing solely on turning a profit for profit’s sake.

Other than the ‘feel good’ factor and the commitment to making the world a better place, there are a number of reasons why setting yourself up as a non-profit can benefit both your organization, as well as the wider community.

Access To A Wider Range Of Grants And Funding Support

Having charitable status can enhance your overall image of trustworthiness and credibility. Fund administration can come from private organisations, government bodies and other foundations and funding bodies which are specifically set up to redistribute profits into social projects to improve their own CSR and ESG responsibilities. Setting up a social enterprise places you on a platform with a wider selection of funding options.

Equally, because there are no shareholders, any revenue is reinvested straight back into the organization and its activities. With no responsibility to those shareholders a charity can become self sufficient and development a long term sustainability which frees them from the financial restraints and constrictions of a traditionally structured business.

Better tax advantages

As a charity you have much better tax advantages. A for profit entity will always be liable to some level of taxation through dividends on its profits. As a non-profit, there are no dividends. While you have to comply with a larger amount of governance to ensure that the funds are effectively managed, all excess can be reinvested or redistributed according to the mission and values of the charity organization itself.

Volunteers, and good faith pro bono support

During the earlier days when money is tight, as a charity you are more attractive to volunteers and professionals happy to work pro bono to support your organisation’s growth. This gives you an opportunity to grow partnerships with people who have similar values and motivations to contribute to meaningful causes.

How do you go about setting up a2 charity?

Chances are, if you have come this far in your reading, you have a burning passion to create something for a cause which is close to your heart. Turning that passion into reality is where the hard work starts. Setting up a charity is not an overnight job. It can take weeks, if not months, to get all the various aspects into place. The actual step by step legal process you go through will depend on which territory you are residing in, and where you want to run your company from, but we hope the following prompts will help guide you to a place in which your key structure is established.

What are your mission and objectives?

Take that burning passion and motivation and start to temper it into a structure that will form a foundation for your charitable organization. This is where you need to become laser focused on your mission. WHO are you wanting to help? WHAT specifically are the issues you are looking to alleviate? WHERE will you be operating – locally, nationally, internationally? WHY are you so passionate about this project? HOW are you intending to create revenue?

You need to create a viable business plan if it is going to work as a revenue generating machine that you want it to. The difference between a full on charity and a social enterprise is one of self sufficiency and self empowerment. While access to grants and funding are a key benefit, ultimately you want your organization to have all the attributes of a successful, profitable business, while ensuring that the beneficiaries of those profits are those on whom your business model actively wants to help.

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