Taking a salary from a Non-profit Organisation.

[Jason_Fisher]

I am in the process of setting up a non profit organisation and want to know in depth how you take a salary from this. Basically i will be running the business, using business funds for expenses on the business, i will be taking a wage but the profit will be going to charity.

How do i do this? Also what are the legalities involved?

With the legalities would it be better to post again in the Legal section?

Thanks in advance.

 

[Bob]

Sorry Jason but it's not totally clear what you are intending. Is the entitiy a charity or a Community Interest Company or is it just not going to be profitable. What will the "business" be doing?

 

[Jason_Fisher]

OK sorry if i wasn't clear, let me start again

I am setting up a business with the aim to raise money for charity. I want to take a salary and live off this business, BUT all the profits i want to go to charity. What is the best way to set this up.

In charities, they get sponsorship etc and donations, but they pay their staff wages. Thats what i need to set up for what i am doing? I just don't know if this is setting up a charity or a non profit organisation?

Does this make sense or am i still waffling? I will get my views over sometime...

 

[akirk]

set up a commercial organisation (sole trader / ltd. company)
give away all the profits = no tax.

simple

or set up a charity...
but then you are far more limited in terms of what you can pay yourself and conflict of interest issues come to the fore...

regards

Alasdair

 

[sanjiv]

Benefits of registering as a charity though are that you can tell people you are a registered charity. Might not trust you if you are normal sole trader/ltd company.

 

[akirk]

True, but as this is presumably referring to the OP's plans to run a half marathon each day for a year, and his various posts looking for ways to make money, while he intends to raise monies for MS, there needs to be an element of making money for his own needs... The Charity Commissioners tend to object to someone setting up a charity with their own living costs being a major part of the plan...

Alasdair

 

[mr. mischief]

This sounds like a Social Enterprise to me, in the sense that you are going to be trading in some form, but with social / community objectives as opposed to "let's make as much profit for the shareholders as we can"

The Social Enterprise Coalition is a good place to start.

http://bit.ly/7vRHSX

My thoughts are to think carefully about which legal form you want to use, and how you're going to set out your social objectives. For example, in my view if you set up a legal entity like a limited company, the Memo & Articles are not the right place as your hands are tied if you later change tack a bit.

In the Annual Report you can set out your "Mission Statement" and this can change slightly each year as the business evolves.