So, you’ve got an idea for a business. You’re ready to quit your job, start up your own company, and start raking in the profits!
But the more you dwell on this possibility, the more you realise you’re not that keen on operating a business. In fact, you’d quite like to start up a charitable foundation of some kind and see where that could take you instead.
If that’s an idea that’s occurred to you, the first thing is to be prepared for the amount of work it’s going to take.
You should always work with those who have knowledge of the nonprofit system in the UK before you set up any charity type structure of your own. It can be a complicated legal matter to get into, and you should have the right advice on your side from the start.
But if you’re just at a stage where you’re interested in potentially forming a nonprofit instead of a traditional business, these are the things to think over right now.
Are You Focused on Making a Profit?
Setting up an organisation that puts profit second requires passion. Where does yours come from? Maybe you’ve lost a loved one, and want to create something in their name that could lead to positive change?
Or maybe you want to provide a service to your community? This is often driven by the need to see improvement within your own local area. Most of the time this can be done as a traditional business, but it’s also something to consider from a not-for-profit point of view too.
Indeed, if you’re less occupied with trading than you are helping those around you, setting up a not-for-profit structure could be better for your long term goals. You needn’t set up a charity here either; something like a Community Interest Company can be perfect for an operation like this.
What Kind of Funding Will You Need?
Forming a nonprofit, as you can probably guess, is not the right choice for those uninterested in fundraising efforts.
Whilst quite a few nonprofits are capable of coming up with their own products and selling them, this is often secondary to the main mission they’re focused on. So, you’ll need a good idea of the kind of funding you’ll need in the long term and how you’re going to get it.
Is there a chance you could put your own money into your venture? It’s possible. Well established nonprofits like Arnold Ventures are often created by those with independent funds, allowing founders to use their own wealth for public betterment.
But you’ll most likely need to source multiple donors before you get up and running. You may need nonprofit advisors on board at this stage too.
When you’ve got a business idea in your head, starting up a non profit could be more suitable for you. Think about this using the questions above; consider the background, where you’ll get your funding, and what structure can support both.
